Tanzania Financial Markets Review June 2026: Government Securities & Interbank Cash Market Analysis | TICGL
TICGL Economic • Financial Markets Watch
Tanzania Financial Markets Review — June 2026
A TICGL deep-dive into Tanzania's financial markets, based on the Bank of Tanzania Monthly Economic Review (June 2026 issue) — with primary focus on the Government securities market (Treasury bills & bonds) and the interbank cash market, alongside the inflation and monetary policy backdrop that shapes them for May 2026.
📅 Published: 11 July 2026🏛️ Source: Bank of Tanzania Monthly Economic Review, June 2026✍️ By TICGL Research Desk
Executive Summary
Tanzania's financial markets in May 2026 reflected ample banking-system liquidity and a Bank of Tanzania holding steady on policy amid a difficult external backdrop shaped by the Middle East conflict and elevated oil prices. Headline inflation edged up to 4.2 percent, staying comfortably inside the national, EAC and SADC convergence bands, while the Bank held its Central Bank Rate at 5.75 percent for a third consecutive quarter. The Government securities market saw short-term paper heavily oversubscribed even as yields continued to ease, while the interbank cash market saw lower turnover and softer rates — both consistent with comfortable bank liquidity positions.
Headline Inflation (May 2026)
4.2%
▲ from 4.0% in Apr-26
Central Bank Rate
5.75%
Held for Q4 2025/26
7-Day IBCM Rate (avg)
5.92%
Within ±150bps corridor
Overall T-Bills Yield
4.74%
▼ from 5.06% in Apr-26
Overall IBCM Rate
6.14%
▼ from 6.26% in Apr-26
M3 Money Supply Growth
25.2%
▲ from 22.0% in Apr-26
Private Sector Credit Growth
23.2%
vs 23.6% in Apr-26
TZS/USD Exchange Rate (avg)
2,616.88
+3.02% y/y appreciation
Government securities market: Two Treasury bills auctions (combined tender TZS 498.1bn) attracted bids of TZS 1,330.3bn — over 2.6x oversubscribed — while 15- and 20-year Treasury bonds drew TZS 324.9bn in bids against a TZS 401.8bn tender, pointing to soft demand at the long end even as short-term yields fell.
Interbank cash market (IBCM): Total transactions eased to TZS 1,732.7bn from TZS 2,567.8bn in April, with 7-day tenor transactions dominating at 63.8% of volume; the overall IBCM rate slipped to 6.14% from 6.26%, tracking comfortably within the Bank's policy corridor.
Monetary policy transmission: The narrowed ±150bps CBR corridor is working as intended — the 7-day IBCM rate averaged 5.92% in May, staying tightly anchored around the 5.75% policy rate.
Exchange rate: The shilling depreciated marginally month-on-month to an average of TZS 2,616.88/USD in May 2026, but strengthened by 3.02% on an annual basis — a reversal from the 3.82% depreciation recorded a year earlier.
Must-Read TICGL Analysis
What's Next for Tanzania's Economy? The Policy Gaps Keeping $1 Trillion Out of Reach by 2050
Before diving into the market data below, read TICGL's flagship analysis on the structural and policy gaps standing between Tanzania and its Vision 2050 ambitions — essential context for interpreting this month's monetary, fiscal and market developments.
Headline inflation rose to 4.2 percent in May 2026, from 4.0 percent in April 2026 and 3.2 percent a year earlier, remaining within the national target band and the SADC/EAC convergence benchmarks. The increase was driven mainly by the pass-through of elevated global fuel prices to transport costs — transport inflation jumped to 11.9 percent in May from 9.2 percent in April. Core inflation (excluding unprocessed food and energy) rose to 3.4 percent, remaining the principal contributor to headline inflation at 2.6 percentage points. Food inflation eased marginally to 5.6 percent as staple crop prices stabilised, while energy, fuel and utilities inflation moderated to 5.0 percent even though retail pump prices stayed elevated on Gulf-conflict disruption to global oil markets.
Chart 1: Tanzania Inflation Trend — Headline, Food, Energy & Core (Jan 2025 – May 2026)
Source: National Bureau of Statistics; Bank of Tanzania computations.
Table 1: Inflation Development — Selected Groups (Annual % Change)
Main Group
Weight (%)
May-25
Apr-26
May-26
All items (headline inflation)
100.0
3.2
4.0
4.2
Food and non-alcoholic beverages
28.2
5.6
5.7
5.6
Core inflation
73.9
2.1
3.1
3.4
Non-core inflation
26.1
5.6
6.3
6.3
Energy, fuel and utilities
5.7
6.1
5.3
5.0
Transport
14.1
1.7
9.2
11.9
Housing, water, electricity, gas & other fuels
15.1
3.4
1.7
0.7
Services
37.2
1.0
4.0
4.7
Goods
62.8
4.2
4.0
4.0
Source: National Bureau of Statistics and Bank of Tanzania computations (Table 2.1.1, BOT MER June 2026).
TICGL take: With headline inflation still well inside target and adequate domestic food supply plus fuel subsidies (introduced April–May 2026) cushioning cost pressures, the Bank of Tanzania retains room to keep policy accommodative. The key watch-item is transport/energy pass-through if the Strait of Hormuz disruption persists.
2. Monetary Policy Stance
At its April 2026 meeting, the Monetary Policy Committee (MPC) maintained the Central Bank Rate (CBR) at 5.75 percent for the quarter ending June 2026, balancing inflation and growth risks amid heightened Middle East geopolitical tensions. The CBR corridor was narrowed to ±150 basis points (from ±200bps) to sharpen policy transmission. The 7-day interbank cash market rate averaged 5.92 percent in May — comfortably inside the corridor — confirming effective transmission of the policy signal. The Bank continued to inject liquidity mainly via reverse repo operations, with sales rising to TZS 399.5 billion in May from TZS 379.7 billion in April, underscoring an accommodative posture in support of credit growth.
Chart 3: Brent Crude Oil Price — Monthly Average (USD/barrel)
Source: World Bank Commodity Markets; U.S. EIA (Table A8).
3. Financial Markets Deep Dive: Government Securities & Interbank Cash Market
This section is TICGL's primary focus for the June 2026 review cycle: a detailed look at the two markets that most directly signal domestic liquidity conditions and the cost of government borrowing — the Government securities market (Treasury bills and bonds) and the Interbank cash market (IBCM).
3.1 Government Securities Market
In May 2026, the Government securities market performed satisfactorily. Short-term securities registered high oversubscription, more than offsetting undersubscription at the longer end of the yield curve, in line with adequate liquidity in the banking system.
Table 2: May 2026 Auction Results Summary
Instrument
Tender Size (TZS bn)
Bids Received (TZS bn)
Successful (TZS bn)
Subscription Rate
Weighted Avg. Yield
Treasury Bills (combined, 2 auctions)
498.1
1,330.3
499.8
267%
4.74% (from 5.06% in Apr-26)
Treasury Bonds — 15-year
165.5
324.9 (combined)
235.1 (combined)
81% (combined)
10.39%
Treasury Bonds — 20-year
236.3
—
—
—
10.43%
Source: Bank of Tanzania (Section 2.4, BOT MER June 2026). The 15- and 20-year bond tenders were combined at TZS 401.8bn against TZS 324.9bn in bids and TZS 235.1bn allotted.
Chart 4: Treasury Bills Yields by Tenor (Weighted Average Yield, %) — Mar 2025 to May 2026
Source: Bank of Tanzania (Table A4: Interest Rates Structure).
Chart 5: Treasury Bonds Yield to Maturity by Tenor (%) — Mar 2025 to May 2026
Source: Bank of Tanzania (Table A4: Interest Rates Structure).
Chart 6: Tanzania Government Securities Yield Curve — Snapshot, May 2026
Source: Bank of Tanzania (Table A4: Interest Rates Structure, BOT MER June 2026).
TICGL take: The short end of the curve has fallen sharply — the overall T-bills rate has more than halved from 8.89% in May 2025 to 4.74% in May 2026 — reflecting ample liquidity and strong appetite for short-dated paper. The long end has also compressed materially (25-year bonds from 15.29% to 11.99%), but oversubscription at the short end versus undersubscription at longer tenors signals investors still prefer to stay short given global uncertainty. This is a favourable window for government to term out short-dated domestic debt, and for private issuers benchmarking against the sovereign curve.
3.2 Interbank Cash Market (IBCM)
The Interbank Cash Market continued to facilitate liquidity distribution among banks, with total market transactions of TZS 1,732.7 billion in May 2026, down from TZS 2,567.8 billion in April. Transactions with a 7-day maturity continued to dominate, accounting for 63.8 percent of total volume. The overall IBCM rate eased slightly to 6.14 percent from 6.26 percent in April 2026, tracking within the Bank's ±150bps CBR corridor and confirming smooth policy transmission.
Chart 7: Interbank Cash Market Rates — Overnight, 2–7 Day & Overall (%) — Mar 2025 to May 2026
Source: Bank of Tanzania (Table A4: Interest Rates Structure).
Chart 8: IBCM Total Transactions vs. Reverse Repo Sold (TZS bn) — Apr vs May 2026
Source: Bank of Tanzania (Section 2.2 & 2.4).
Chart 9: IBCM Volume Share by Maturity — May 2026
Source: Bank of Tanzania (Chart 2.4.2).
Table 4: Interbank Cash Market Rates by Maturity (%)
Maturity
Mar-26
Apr-26
May-26
Overnight
6.17
6.15
5.94
2 to 7 days
6.25
6.18
5.96
8 to 14 days
6.53
6.33
6.48
15 to 30 days
6.85
6.79
6.58
31 to 60 days
7.20
6.92
6.79
61 to 90 days
8.50
7.12
6.79
91 to 180 days
8.07
8.77
7.27
Overall IBCM rate
6.32
6.26
6.14
Source: Bank of Tanzania (Table A4). REPO rate held at 5.75%; Reverse REPO rate at 5.75%; Lombard rate at 7.75% throughout the period.
Table 5: Reverse Repo Operations (TZS billion)
Period
Reverse Repo Sold
April 2026
379.7
May 2026
399.5
Source: Bank of Tanzania (Section 2.2, Chart 2.2.2).
TICGL take: Lower IBCM turnover alongside a slightly lower overall rate suggests banks entered May 2026 with more comfortable liquidity buffers, reducing the need for interbank borrowing even as the Bank kept injecting liquidity through reverse repos. The dominance of 7-day tenor transactions (63.8% of volume) is consistent with banks managing statutory reserve requirements around the CBR corridor rather than taking directional liquidity positions.
3.3 Interbank Foreign Exchange Market (IFEM)
Liquidity conditions in the IFEM remained adequate in May 2026, supported by seasonal currency inflows, particularly from gold exports. Total market turnover rose to USD 119.3 million from USD 64.6 million in April, and the Bank intervened by auctioning USD 44 million (up from USD 15.3 million), in line with its Foreign Exchange Intervention Policy. Despite higher forex liquidity, the shilling depreciated marginally month-on-month, trading at an average of TZS 2,616.88/USD versus TZS 2,612.46/USD in April — though it strengthened 3.02% on an annual basis, a turnaround from 3.82% annual depreciation a year earlier.
Chart 10: TZS/USD Exchange Rate — End of Period, May 2025 to May 2026
Source: Bank of Tanzania (Table A10).
Table 6: IFEM Snapshot — April vs May 2026
Indicator
Apr-26
May-26
Total market turnover (USD million)
64.6
119.3
BOT net auction/sale (USD million)
15.3
44.0
Weighted average exchange rate (TZS/USD)
2,612.46
2,616.88
Source: Bank of Tanzania (Section 2.4, Chart 2.4.3).
Related TICGL Research & Tools
Deepen your understanding of Tanzania's economic trajectory with these related TICGL resources:
Tanzania Financial MarketsGovernment SecuritiesInterbank Cash MarketMonetary PolicyInflationPublic DebtVision 2050
Muhtasari kwa Kiswahili
Ripoti ya Kila Mwezi ya Kiuchumi ya Benki Kuu ya Tanzania (BOT) ya Juni 2026 inaonesha kuwa mfumuko wa bei nchini Tanzania uliongezeka hadi asilimia 4.2 mwezi Mei 2026, kutoka asilimia 4.0 mwezi Aprili, ukisukumwa hasa na ongezeko la bei za mafuta duniani kufuatia mgogoro wa Mashariki ya Kati. Hata hivyo, kiwango hicho bado kiko ndani ya lengo la Taifa na vigezo vya EAC na SADC.
Sera ya fedha: Benki Kuu iliendelea kutunza Kiwango cha Riba cha Benki Kuu (CBR) katika asilimia 5.75 kwa robo ya mwaka inayoishia Juni 2026.
Soko la Hatifungani za Serikali: Dhamana za muda mfupi (Treasury bills) ziliendelea kupokelewa vizuri sana na wawekezaji (ombi la TZS bilioni 1,330.3 dhidi ya lengo la TZS bilioni 498.1), huku riba (yield) ikiendelea kushuka hadi wastani wa asilimia 4.74. Hatifungani za muda mrefu (miaka 15 na 20) zilipokea maombi kidogo zaidi ya lengo.
Soko la Fedha baina ya Benki (Interbank Cash Market): Miamala ilipungua hadi TZS bilioni 1,732.7 kutoka TZS bilioni 2,567.8 mwezi Aprili, huku riba ya jumla ikishuka hadi asilimia 6.14. Miamala ya siku 7 iliendelea kutawala soko, ikichukua asilimia 63.8 ya miamala yote.
Soko la Fedha za Kigeni baina ya Benki (IFEM): Mzunguko wa fedha za kigeni uliongezeka hadi Dola milioni 119.3 kutoka Dola milioni 64.6 mwezi Aprili, huku Shilingi ikishuka kidogo hadi wastani wa TZS 2,616.88 kwa Dola moja, lakini ikiimarika kwa asilimia 3.02 ukilinganisha na mwaka jana.
Kwa uchambuzi wa kina zaidi kuhusu mapengo ya kisera yanayozuia uchumi wa Tanzania kufikia thamani ya Dola trilioni 1 ifikapo 2050, soma makala maalum ya TICGL: What's Next for Tanzania's Economy?
Primary source: Bank of Tanzania, Monthly Economic Review, June 2026 (covering data through May 2026). Compiled, analysed and contextualised by the TICGL Research Desk (Tanzania Investment and Consultant Group Ltd / Tanzania Economic Research Institute). Figures marked "p" are provisional and "r" are revised, per BOT convention. This page is for general information purposes and does not constitute investment advice.
Tanzania Lending & Deposit Interest Rates Analysis – May 2026 | TICGL
TICGL Economic • Interest Rate Watch
Tanzania Lending & Deposit Interest Rates Analysis — May 2026
A focused TICGL analysis of Tanzania's bank interest rate structure: overall and negotiated lending rates, lending rates by tenor, deposit rates by tenor, and the interest rate spread — based on Bank of Tanzania data through May 2026.
📅 Published: 12 July 2026🏛️ Source: Bank of Tanzania Monthly Economic Review, June 2026✍️ By TICGL Research Desk
Executive Summary
Tanzania's bank interest rate structure held broadly stable through May 2026, with modest declines across both lending and deposit rates. The overall lending rate was little changed at 15.32 percent (from 15.33% in April), while the negotiated rate for prime customers eased more sharply to 11.90 percent from 12.56 percent — a signal that banks are competing harder for their best borrowers even as headline pricing stays flat. On the deposit side, the overall time deposit rate eased to 8.43 percent from 8.54 percent, while the negotiated deposit rate moderated to 11.25 percent. The resulting short-term interest rate spread narrowed to 5.22 percentage points, from 5.50 points in April 2026 — the tightest spread recorded since at least March 2025, pointing to gradually improving intermediation efficiency in the banking sector.
Overall Lending Rate
15.32%
vs 15.33% in Apr-26
Overall Time Deposit Rate
8.43%
▼ from 8.54% in Apr-26
Short-Term Interest Spread
5.22 pts
▼ from 5.50 pts in Apr-26
Negotiated Lending Rate
11.90%
▼ from 12.56% in Apr-26
Negotiated Deposit Rate
11.25%
▼ from 11.37% in Apr-26
Savings Deposit Rate
2.85%
▼ from 2.91% in Apr-26
12-Month Deposit Rate
10.17%
▲ from 9.81% in Apr-26
Long-Term Lending (3–5yr)
14.43%
▼ from 14.56% in Apr-26
Lending rates: Short-term lending (up to 1 year) eased to 15.38% while medium-term (1–2 year) lending actually rose to 17.11% from 17.19% — the highest tenor on the curve — reflecting banks pricing in duration risk more aggressively than short-dated risk.
Deposit rates: The 12-month deposit rate rose to a 15-month high of 10.17%, even as the overall (blended) time deposit rate fell — suggesting banks are paying up more selectively for longer-dated, stickier deposits while short-tenor deposit pricing eased.
Spread compression: The lending-deposit spread has now narrowed for two consecutive months (5.85 → 5.50 → 5.22 percentage points since March 2026), consistent with the Bank of Tanzania's accommodative liquidity stance feeding through to cheaper credit intermediation.
Negotiated vs. posted rates: The gap between the overall lending rate (15.32%) and the negotiated lending rate (11.90%) has widened to 3.42 percentage points — the largest gap in the 15-month series — underscoring how much more competitively banks price loans for their strongest corporate and prime clients versus posted/list rates.
Must-Read TICGL Analysis
What's Next for Tanzania's Economy? The Policy Gaps Keeping $1 Trillion Out of Reach by 2050
Before diving into the interest rate data below, read TICGL's flagship analysis on the structural and policy gaps standing between Tanzania and its Vision 2050 ambitions — essential context for interpreting the cost of credit and bank intermediation trends discussed here.
Tanzania's overall lending rate stood at 15.32 percent in May 2026, essentially flat month-on-month. Beneath that headline figure, however, the lending curve by tenor tells a more nuanced story: short-term lending (up to 1 year) eased to 15.38%, medium-term (1–2 year) lending climbed to a series-high 17.11%, medium-term (2–3 year) lending eased slightly to 15.60%, long-term (3–5 year) lending fell to 14.43%, and term loans over 5 years eased to 14.08%. This "hump" in the middle of the curve — where 1–2 year money is priced above both shorter and longer tenors — suggests banks see the greatest duration/credit risk in that medium horizon.
Chart 1: Tanzania Lending Rates by Tenor (%) — March 2025 to May 2026
Source: Bank of Tanzania (Table A4: Interest Rates Structure).
Table 1: Lending Interest Rates by Tenor (%), Selected Months
Tenor
May-25
Sep-25
Jan-26
Mar-26
Apr-26
May-26
Short-term (up to 1 year)
15.96
15.52
15.49
15.45
15.31
15.38
Medium-term (1–2 years)
16.35
16.26
16.73
16.53
17.19
17.11
Medium-term (2–3 years)
15.24
15.19
14.97
15.31
15.63
15.60
Long-term (3–5 years)
14.19
14.26
14.05
13.95
14.56
14.43
Term loans (over 5 years)
14.17
14.66
14.24
14.30
13.96
14.08
Overall lending rate
15.18
15.18
15.10
15.11
15.33
15.32
Source: Bank of Tanzania (Table A4: Interest Rates Structure, BOT MER June 2026).
TICGL take: The medium-term (1–2 year) segment is now the most expensive tenor on the lending curve at 17.11% — over 250 basis points above the overall average. For businesses planning working-capital or asset-financing facilities, structuring around shorter (≤1 year, rolled over) or longer (3–5 year) tenors may currently offer materially better pricing than 1–2 year facilities.
2. Deposit Interest Rates by Tenor
The overall time deposit rate eased to 8.43 percent in May 2026 from 8.54 percent in April. Within the deposit ladder, shorter tenors softened — the 1-month rate fell to 8.34% and the 3-month rate rose to 10.52% (its highest point in the 15-month series) — while the 12-month rate climbed to 10.17%, its highest level since at least March 2025. The savings deposit rate, which anchors the bottom of the curve, eased to 2.85%.
Chart 2: Tanzania Deposit Rates by Tenor (%) — March 2025 to May 2026
Source: Bank of Tanzania (Table A4: Interest Rates Structure).
Table 2: Deposit Interest Rates by Tenor (%), Selected Months
Tenor
May-25
Sep-25
Jan-26
Mar-26
Apr-26
May-26
Savings deposit rate
2.52
2.92
2.94
2.89
2.91
2.85
1-month deposit
10.47
9.65
8.96
8.65
9.06
8.34
2-month deposit
9.25
9.28
9.56
9.34
9.67
8.65
3-month deposit
9.85
9.61
9.43
9.56
9.01
10.52
6-month deposit
9.82
10.12
10.20
10.51
10.35
9.87
12-month deposit
9.72
9.84
9.70
9.60
9.81
10.17
24-month deposit
7.49
7.63
7.11
7.03
8.20
7.69
Overall time deposit rate
8.58
8.50
8.33
8.33
8.54
8.43
Source: Bank of Tanzania (Table A4: Interest Rates Structure, BOT MER June 2026).
TICGL take: Savers locking in 12-month deposits are now earning materially more (10.17%) than those on shorter 1- or 2-month placements (8.34% / 8.65%) — the widest 12-month vs. 1-month premium since early 2025. For treasury and cash-management decisions, this favours term deposits over rolling short-tenor placements at the margin.
3. Interest Rate Spread Analysis
The short-term interest rate spread — defined by the Bank of Tanzania as the short-term (up to 1 year) lending rate less the 12-month deposit rate — narrowed to 5.22 percentage points in May 2026, from 5.50 points in April and 5.85 points in March. This is the narrowest spread recorded in the current data series, and reflects both softer short-term lending pricing and a simultaneously higher 12-month deposit rate.
Chart 3: Overall Lending vs. Overall Deposit Rate, and Spread (Percentage Points) — March 2025 to May 2026
Source: Bank of Tanzania (Table A4); spread computed by TICGL as Overall Lending Rate minus Overall Time Deposit Rate.
Table 3: Short-Term Interest Rate Spread (%), Dec 2025 – May 2026
Indicator
Dec-25
Jan-26
Feb-26
Mar-26
Apr-26
May-26
Short-term lending rate (up to 1 year)
15.46
15.49
15.41
15.45
15.31
15.38
12-month deposit rate
9.58
9.70
9.82
9.60
9.81
10.17
Short-term interest spread
5.88
5.79
5.59
5.85
5.50
5.22
Source: Bank of Tanzania (Table 2.3.1, BOT MER June 2026).
TICGL take: A narrowing spread is a favourable signal for financial intermediation efficiency — it means the "wedge" banks charge between what they pay savers and what they charge borrowers is shrinking, benefiting both sides of the balance sheet. If sustained, this trend should support both credit access for businesses (23.2% private sector credit growth was recorded in May 2026) and better returns for term depositors.
4. Negotiated Rates: Prime Client Pricing
Negotiated rates — the pricing banks offer their strongest, highest-volume clients — moved in opposite directions from posted rates in May 2026. The negotiated lending rate fell sharply to 11.90 percent from 12.56 percent in April, its lowest level in the 15-month series, while the negotiated deposit rate eased to 11.25 percent from 11.37 percent. The gap between the overall (posted) lending rate and the negotiated lending rate has widened to 3.42 percentage points, the widest gap recorded since March 2025 — evidence of intensifying competition among banks for prime corporate borrowers even as list pricing for the broader market stays essentially flat.
Chart 4: Negotiated Lending Rate vs. Negotiated Deposit Rate (%) — March 2025 to May 2026
Source: Bank of Tanzania (Table A4: Interest Rates Structure).
Source: Bank of Tanzania (Table A4: Interest Rates Structure, BOT MER June 2026).
TICGL take: Note the crossover: since around late 2025, the negotiated deposit rate (11.25% in May) has moved above the negotiated lending rate (11.90% is only marginally above it) — large depositors with negotiating power are earning nearly as much as prime borrowers are paying. This compression matters for corporate treasury strategy: businesses with strong banking relationships should actively negotiate rather than accept posted/list pricing on both sides of the balance sheet.
5. Foreign Currency Lending & Deposit Rates
Foreign currency (largely USD-denominated) lending and deposit rates remain structurally lower than their TZS counterparts, reflecting the absence of currency depreciation risk premium for lenders and the global USD rate environment. The overall foreign currency lending rate stood at 8.72 percent in May 2026, while the foreign currency overall time deposit rate was 4.47 percent — both up modestly from April.
Chart 5: TZS vs. Foreign Currency Overall Lending Rate (%) — March 2025 to May 2026
Source: Bank of Tanzania (Table A4: Interest Rates Structure, Section B: Foreign Currency).
Source: Bank of Tanzania (Table A4: Interest Rates Structure, Section B).
TICGL take: The TZS–USD lending rate differential remains wide (15.32% vs. 8.72%, a gap of roughly 6.6 percentage points), which continues to make foreign-currency borrowing attractive for importers and dollar-revenue businesses — provided they can manage the associated exchange rate risk, especially with the shilling's recent mild depreciation trend on a month-on-month basis.
6. May 2026 Rate Ladder Snapshot
The chart below consolidates the full lending and deposit rate ladder as it stood at the end of May 2026, giving a single-glance view of where funding and credit costs sit across the maturity spectrum.
Chart 6: Tanzania Lending & Deposit Rate Ladder — Snapshot, May 2026
Source: Bank of Tanzania (Table A4, BOT MER June 2026).
Policy backdrop: This rate structure sits against a Central Bank Rate held at 5.75% and a 7-day interbank cash market rate averaging 5.92% in May 2026 — meaning banks' overall lending rate carries a spread of roughly 9.6 percentage points over the policy rate, while the overall deposit rate sits only about 2.7 points above it. For a fuller picture of the monetary policy and money-market backdrop shaping these numbers, see TICGL's companion analysis on Tanzania's Government securities and interbank cash markets.
Related TICGL Research & Tools
Deepen your understanding of Tanzania's financial markets and economic trajectory with these related TICGL resources:
Tanzania Lending RatesDeposit RatesInterest Rate SpreadNegotiated RatesBanking SectorMonetary Policy
Muhtasari kwa Kiswahili
Ripoti ya Kila Mwezi ya Kiuchumi ya Benki Kuu ya Tanzania (BOT) ya Juni 2026 inaonesha kuwa riba za mikopo na amana za benki nchini Tanzania ziliendelea kuwa tulivu mwezi Mei 2026, huku kukiwa na upungufu mdogo katika pande zote mbili.
Riba ya mikopo kwa ujumla: Ilibaki karibu bila mabadiliko kwa asilimia 15.32, kutoka asilimia 15.33 mwezi Aprili.
Riba ya mikopo iliyojadiliwa (negotiated) kwa wateja wakubwa: Ilishuka kwa kiasi kikubwa hadi asilimia 11.90 kutoka asilimia 12.56, ikionesha ushindani mkubwa baina ya benki kuvutia wateja wazuri.
Riba ya amana kwa ujumla: Ilishuka hadi asilimia 8.43 kutoka asilimia 8.54, ingawa riba ya amana za miezi 12 iliongezeka hadi asilimia 10.17 — kiwango cha juu zaidi katika miezi 15 iliyopita.
Pengo la riba (interest rate spread): Pengo baina ya riba ya mikopo ya muda mfupi na riba ya amana za miezi 12 lilipungua hadi pointi 5.22, kutoka pointi 5.50 mwezi Aprili — hii ni ishara nzuri ya kuboreka kwa ufanisi wa upatanishi wa kifedha (intermediation) katika sekta ya benki.
Riba za fedha za kigeni: Riba ya mikopo kwa dola ilikuwa asilimia 8.72, ikiendelea kuwa chini sana ukilinganisha na riba ya mikopo kwa Shilingi (asilimia 15.32).
Kwa uchambuzi wa kina zaidi kuhusu soko la fedha la Tanzania (Government Securities Market na Interbank Cash Market), soma makala shirikishi ya TICGL: Tanzania Financial Markets Review — June 2026. Na kwa mapengo ya kisera yanayozuia uchumi wa Tanzania kufikia thamani ya Dola trilioni 1 ifikapo 2050, soma: What's Next for Tanzania's Economy?
Primary source: Bank of Tanzania, Monthly Economic Review, June 2026 (covering data through May 2026), Table A4: Interest Rates Structure and Table 2.3.1: Lending and Deposit Interest Rates. Compiled, analysed and contextualised by the TICGL Research Desk (Tanzania Investment and Consultant Group Ltd / Tanzania Economic Research Institute). The interest rate spread series in Chart 3 is computed by TICGL (Overall Lending Rate minus Overall Time Deposit Rate) using official BOT source data; Table 3's "short-term interest spread" reproduces BOT's own published definition and figures. This page is for general information purposes and does not constitute investment or financial advice.
What's Next for Tanzania's Economy? The Policy Gaps Delaying the $1 Trillion Vision | TICGL
🔬 TICGL Policy Research | Dira 2050 Analysis | June 2026
What's Next for Tanzania's Economy? The Policy Gaps Keeping $1 Trillion Out of Reach by 2050
Tanzania's Dira 2050 sets an inspiring $1 trillion GDP target by 2050. But critical economic policy gaps — in taxation, private sector development, industrialisation, and fiscal management — mean the realistic timeline is closer to 2058–2062. This is the full TICGL assessment.
$91.8B
Tanzania GDP 2025
$1T
Dira 2050 Target
5.9%
Current Real Growth
10.2%
Growth Rate Needed by 2050
2058–62
TICGL Central Estimate
70M
Population Today
📅 Published: June 30, 2026🏛️ TICGL Economic Research📄 Source: Dira 2050 (June 2025) & Budget Speech FY2026/27🇹🇿 Tanzania Economy
Tanzania in Numbers — Where We Stand, Where We Must Go
A snapshot of Tanzania's economic reality in 2026, the ambition of Dira 2050, and the hard arithmetic sitting between them. Every figure here points to a specific policy gap examined in detail below.
$91.8B
GDP 2025 (Nominal)
TZS 234.1 Trillion
Need 10.9× growth to reach $1T
5.9%
Real GDP Growth 2025
FY2026/27 target: 6.3%
4.3pp below required pace
13.1%
Tax-to-GDP Ratio
SSA average: 16%
6.1pp below middle-income norm
$1,277
GNI Per Capita (2023)
Target: $7,000 by 2050
18.2% of target achieved
8.1%
Manufacturing Share of GDP
Target for industrialisation: 25%+
17pp industrialisation gap
45–55%
Informal Economy Share
Large share of workers untaxed
Largest single policy gap
TZS 62.33T
FY2026/27 Budget
+10.3% vs prior year
74.2% self-financed
31.4%
Wage Bill Increase (2026/27)
TZS 10.13 trillion total
Crowding out development spend
~130M
Population by 2050 (est.)
Currently 70M; growing 2.9%/yr
$7,692 per capita if $1T reached
4,522 MW
Power Generation Capacity
Target: 15,000 MW by 2050
30% of target — energy gap real
3.4%
Avg Inflation (Jul–Apr 2026)
Within 3–5% target band ✓
Macro stability maintained
TZS 114T
Total Government Debt (Mar 2026)
39.6% of GDP
Rising faster than GDP growth
📊 TICGL Verdict: The $1 Trillion Milestone Is a 2058–2062 Story, Not 2050
At Tanzania's current real GDP growth rate of 5.9%, the $1 trillion milestone arrives around 2065. Closing the gap to 2050 requires a growth rate of 10.2% nominal per year — nearly double the current pace. This is not a failure of vision; it is a gap in execution. Five structural policy gaps — detailed below — are the primary reasons Tanzania is on a 2058–2062 trajectory rather than a 2050 one. Closing even three of these gaps could advance the timeline by a decade.
2065
At current 5.9% pace
2058–62
TICGL Central Estimate
2054–56
If 8% sustained reform
2050
Dira target (needs 10.2%)
The 5 Critical Economic Policy Gaps
These are the structural deficits — documented, measurable, and currently unresolved — that explain why Tanzania's growth rate is running at 5.9% instead of the 10.2% required to hit $1 trillion by 2050. Each gap has a name, a number, and a policy prescription.
💸
Gap 1: Narrow Tax Base — Government Taxing Depth, Not Breadth
CRITICAL
Tanzania's tax-to-GDP ratio of 13.1% is among the lowest in Sub-Saharan Africa and far below the 17–20% range associated with sustainable middle-income investment. Worse, the FY2026/27 budget's revenue measures overwhelmingly fall on existing formal-sector taxpayers — motorcycles, petroleum, EAC tariffs — rather than pulling the informal 45–55% into the tax net.
Current Tax/GDP13.1%
SSA Average16%
Middle-Income Norm18–20%
FY2026/27 Target13.7%
What must change:
Mandatory digital payment enforcement to formalise the informal economy
Property tax reform and LGA own-source revenue systems
Presumptive tax expansion for small traders with simplified compliance
MKUMBI reforms must go beyond fee cuts to full regulatory simplification
🏭
Gap 2: Industrialisation Deficit — Manufacturing Cannot Drive Growth at 8.1% of GDP
CRITICAL
Every $1 trillion economy in history was built on a strong manufacturing base. Tanzania's manufacturing sector contributes only 8.1% of GDP — a figure that has barely moved in a decade. Structural transformation from agriculture-dependent growth to industry-driven growth is the single biggest determinant of whether Tanzania hits $1T in 2050 or 2065.
Manufacturing / GDP (2025)8.1%
Required for $1T economy22–28%
Manufacturing growth rate8.0% p.a.
Power availability (gap)4,522 / 15,000 MW
What must change:
SEZs and industrial parks with reliable power, logistics, and fast customs
Julius Nyerere HPP (2,115 MW) must be complemented by solar and gas capacity
Value-addition mandates for mineral exports (lithium, graphite, gold)
Aggressive import substitution in edible oils, textiles, pharmaceuticals
🏦
Gap 3: Private Sector Crowding-Out — Government Borrows Where Business Should Invest
HIGH
Tanzania's government domestic borrowing competes directly with private sector credit. Treasury bills and bonds yield risk-free returns of 8–12%, making commercial lending to SMEs economically unattractive for banks. The result: private investment remains below 22% of GDP — far short of the 30–35% needed to sustain 8%+ growth. PPP projects exist on paper but almost none have reached financial close.
Private Investment / GDP~22%
Required for transformation30–35%
PPP projects at fin. close~0 (2025)
SME access to credit (est.)Limited
What must change:
First bankable PPP projects must reach financial close — not just signing ceremonies
Domestic debt maturity extension to reduce roll-over pressure on short-term rates
Credit guarantee schemes for manufacturing and agri-processing SMEs
DSE capital market deepening — listed instruments beyond government bonds
👔
Gap 4: Informal Economy — 45–55% of Output Is Outside the Formal System
CRITICAL
Between 45–55% of Tanzania's economic activity occurs in the informal sector — outside formal registration, taxation, regulation, and social protection. This is not merely a revenue problem. It means most Tanzanian workers cannot access formal credit, pension coverage, or health insurance, and most Tanzanian businesses cannot scale because they cannot access capital markets. Informality is the deepest structural barrier to the $1 trillion economy.
Informal economy share45–55%
Formal employment rate~20%
Dira 2050 formal emp. target50% by 2050
Digital payment adoptionGrowing (TWIGA mandate)
What must change:
Digital payment mandate enforcement across transport, hospitality, trade
Single business registration reducing multi-step licensing barriers
Formalisation incentives: tax holidays for first 3 years of formal registration
Mobile-first NHIF & NSSF enrolment for informal workers
📉
Gap 5: Fiscal Composition — Rising Wage Bill Is Eating Development Expenditure
HIGH
The FY2026/27 wage bill of TZS 10.13 trillion (+31.4% YoY) is now the fastest-growing line in the budget. As recurrent expenditure expands, development/capital expenditure — the investment that builds the infrastructure Tanzania needs for sustained 8–10% growth — is being crowded out. A government that spends 16.3% of its budget on salaries but only 3.7% on capital investment cannot build a $1 trillion economy.
Wage bill 2026/27TZS 10.13T (+31.4%)
Development expenditureTZS 2.33T (–1.9%)
Interest paymentsTZS 6.86T
Wage + interest share of budget~27.5%
What must change:
Wage bill growth must be capped at GDP growth rate — not 5× GDP growth rate
Development expenditure must be ring-fenced at minimum 20% of total budget
PPP and blended finance must replace direct government capital spending
External debt concessional terms must be preserved to reduce interest bill
🎓
Gap 6: Human Capital Mismatch — Skills Not Aligned with the Economy Tanzania Needs
HIGH
Tanzania's Human Capital Index score of 0.39 means a child born today will reach only 39% of their productive potential as an adult. The education system produces graduates strong in theoretical knowledge but weak in the applied STEM, digital, and technical skills that manufacturing, digital economy, and green technology sectors require. 43% of Tanzania's population is under 15 — this demographic window is also a demographic risk if skills development stalls.
Human Capital Index score0.39 (SSA avg: 0.40)
Secondary completion rate~30% (Form IV)
STEM graduates / yearInsufficient for industry
Digital literacy (2025 est.)~35% (target: 70%)
What must change:
VETA expansion and mandatory technical/vocational pathway alongside academic
University-industry partnership mandates for applied research
STEM enrollment parity for girls — closing the gender gap in technical fields
Digital skills curriculum from primary school level upward
🔴 The Combined Effect: Why These Gaps Add Up to a 10-Year Delay
Each policy gap individually costs Tanzania approximately 0.5–1.5 percentage points of potential GDP growth per year. Together, the six gaps identified above account for the difference between Tanzania's actual 5.9% growth trajectory and the 8–10% trajectory needed to hit $1 trillion by 2050–2056. Closing all six simultaneously — through sustained political will across multiple election cycles — would close the decade gap. Closing three or four would still advance the timeline from 2062 to roughly 2055–2057. The FY2026/27 Budget takes meaningful steps on digitisation and the business environment, but leaves the wage bill, formal employment rate, and manufacturing investment largely unaddressed.
The Growth Arithmetic: When Does $1 Trillion Actually Arrive?
Five growth scenarios projected to 2065. The vertical red line marks the Dira 2050 deadline. The key question: which scenario Tanzania's policy reforms can credibly sustain.
Tanzania GDP Trajectory 2025–2065 — Five Policy Scenarios
Nominal GDP (USD Billions). Closing the policy gaps above shifts Tanzania from the red line (5.9%) toward the blue line (10.2%). TICGL central estimate: the gold zone (7–7.5%), reaching $1T around 2058–2062.
Scenario
Avg Real Growth
GDP 2030
GDP 2040
GDP 2050
Year $1T Reached
Policy Gaps Closed
Status
Current Trend
5.9%
$122B
$215B
$380B
~2065
None / minimal
15 yrs late
FYDP IV Target
7.0%
$129B
$253B
$497B
~2060
1–2 gaps partially
~10 yrs late
TICGL Central Estimate
7.5%
$132B
$272B
$561B
~2058–2062
2–3 gaps partially
8–12 yrs late
Reform Acceleration
8.0%
$135B
$292B
$631B
~2054–2056
3–4 gaps closed
4–6 yrs late
East Africa Frontier
9.0%
$141B
$335B
$793B
~2052
4–5 gaps closed
~2 yrs late
Dira 2050 Required
10.2%
$149B
$391B
$1,000B
2050
All 6 gaps closed
On Target
Historical Real GDP Growth Rate (2015–2026)
Tanzania has never sustained above 7.2% — the 10.2% required by Dira 2050 is historically unprecedented for this economy.
Tax-to-GDP: Tanzania vs Benchmarks (2018–2027)
Tanzania's tax ratio is closing the gap slowly — but at this pace reaches 18% around 2035, not 2030 as needed.
Population Dynamics: 70 Million Today, ~130 Million by 2050
Tanzania's population is both its greatest asset and its most demanding arithmetic challenge. More workers means more output potential — but only if the economy generates formal jobs. More mouths means more pressure on education, healthcare, and infrastructure.
Tanzania Population Projection 2025–2055
UN variant projections. Medium variant shows ~130M by 2050 — the key denominator for per capita income calculations.
GDP Per Capita Across Growth Scenarios (2025–2060)
At 10.2% growth, per capita income hits $7,692 by 2050 (exceeds the $7,000 target). At 5.9%, per capita in 2050 is only ~$2,976.
Year
Population (M)
GDP @5.9% ($B)
GDP @7.5% TICGL ($B)
GDP @10.2% ($B)
Per Capita @10.2%
Per Capita @7.5%
vs $7,000 Target
2025
67.5
$91.8
$91.8
$91.8
$1,360
$1,360
19%
2030
77.5
$122
$132
$149
$1,922
$1,703
27%
2035
90.1
$163
$186
$243
$2,697
$2,065
39%
2040
104.8
$217
$263
$397
$3,788
$2,510
54%
2045
117.2
$290
$371
$648
$5,530
$3,165
79%
2050
130.0
$387
$523
$1,000
$7,692
$4,023
110% / 57%
2055
137.0
$517
$737
—
—
$5,380
77%
2058–2062
142.0
~$617
~$940–$1,000B
—
—
~$6,900
~$1T TICGL est.
✅ The Per Capita Arithmetic Works — But Only If GDP Gets There
At TICGL's central estimate (7.5% growth, $1T around 2060), per capita income at that point would be approximately $6,900–$7,200 — essentially meeting the Dira 2050 $7,000 per capita target, just 8–12 years late. The population math is not Tanzania's enemy: at ~140 million by 2060, $1 trillion still delivers upper-middle-income per capita. The sole constraint is GDP growth acceleration. Every percentage point of real growth added to the annual trajectory advances the $1 trillion date by approximately 2–3 years.
FY2026/27 Budget: Does It Address the Policy Gaps?
The FY2026/27 Budget (TZS 62.33 trillion, presented June 11 2026) is explicitly framed as Dira 2050's first annual fiscal instrument. How well does it address the six policy gaps identified above?
The FY2026/27 Budget is a credible first step toward Dira 2050, particularly in its self-financing ambition (74.2% domestic revenue) and the digital payment formalisation mandate. But it does not yet constitute the structural reform programme needed to close the decade gap to 2058–2062. The wage bill explosion (+31.4%) and the absence of any PPP financial close are the two most concerning signals: they suggest government is still the economy's primary actor rather than its enabler — precisely the pattern Dira 2050 is designed to change.
Dira 2050: The Vision Architecture Behind the Numbers
Understanding what Tanzania has committed to — and why the commitment is structurally sound, even if the pace is insufficient.
🏛️
Foundation: Governance, Peace & Security
Rule of law, democratic institutions, anti-corruption, accountable civil service, and regional peace diplomacy. The environment without which no growth scenario is credible.
Sustainable management of Tanzania's exceptional biodiversity, wetlands, water resources, pollution control, and climate adaptation strategies.
32% of land protected
Carbon markets participation
Climate resilience across all sectors
⚡
Enablers: Energy, Transport, Digital, S&T
JNHPP (2,115 MW) commissioned; SGR Dar–Dodoma operational; digital payments expanding; science and technology investment growing. These are the brightest policy signals in the current budget.
Power target: 15,000 MW by 2050
SGR: Dar–Mwanza full completion
Digital literacy: 70% by 2050
🏗️
Transformation Sectors: 9 Priority Areas
Agriculture, tourism, manufacturing, construction, mining, blue economy, sports & creative, financial services, and services — each targeted for structural transformation to 2050.
Agriculture: 26.5% of GDP → modernised
Tourism: 25% of export earnings
Mining: lithium, graphite, gold value-add
Progress Dashboard: How Far Has Tanzania Come?
Where Tanzania stands today relative to key Dira 2050 targets — and relative to what Dira 2025 promised. Progress bars show % completion toward the 2050 target.
Economic Targets — Progress vs 2050
GDP: $91.8B / $1,000B 9.2% of target
Per Capita: $1,277 / $7,000 18.2%
Tax-to-GDP: 13.1% / 18% needed 73%
Manufacturing / GDP: 8.1% / 25%+ 32%
Formal Employment: ~20% / 50% 40%
Budget Self-Financing: 74.2% / 90%+ 82%
Power Capacity: 4,522 / 15,000 MW 30%
Private Investment / GDP: 22% / 33% 67%
Human Development — Progress vs 2050
Life Expectancy: 68 / 75 years 91%
Primary Enrolment: 98% / 100% 98%
Secondary Completion: ~30% / 90% 33%
Rural Water Access: 79.9% / 100% 80%
Digital Literacy: ~35% / 70% 50%
Poverty Rate: 25.1% → 0% (reverse) 65%
Human Capital Index: 0.39 / 0.70+ 56%
Gender Parity Closure: ~40% / 85% 47%
The Road Ahead: Key Milestones 2026–2062
A realistic sequencing of what must happen — and when — for Tanzania to close the gap between the 2050 vision and the 2058–2062 reality.
Tanzania GDP Milestone Chart 2025–2060 — Stacked Growth Scenarios
Columns show cumulative GDP by year across three scenarios. The $1T line is crossed by the 10.2% scenario at 2050, the 8% scenario around 2054–2056, and the 7.5% TICGL central estimate around 2058–2062.
2026–2031 — FYDP IV: Critical Foundation Years
The growth rate achieved in this 5-year period determines everything. If Tanzania averages 7.5%+ and closes gaps 1, 4, and 6 (tax base, informality, skills), the 2058–2062 estimate improves. If it averages 5.9%, the 2065 scenario hardens. SGR Dar–Mwanza completion, JNHPP power expansion, and digital payment enforcement are the three measurable tests. GDP must reach $130–150B by 2031.
2032–2036 — FYDP V: The Private Sector Must Lead
By 2032, PPP projects must be at financial close — not just MOU stage. Manufacturing's share of GDP must be rising toward 14–16%. Private investment must exceed 27% of GDP. Tax-to-GDP must cross 15%. This is the inflection window: if reform momentum holds, Tanzania accelerates from 7% to 8%+. If not, the 2065 trajectory solidifies. Population: ~88M. GDP target at 8%: $200–220B.
2037–2041 — FYDP VI: Manufacturing & Digital Economy Scale
If FYDP V reforms held, Tanzania enters FYDP VI as a genuinely diversifying economy. Manufacturing at 18–20% of GDP. Digital economy contributing 10%+. Formal employment crossing 35%. Tax-to-GDP at 16–17%. This is the phase where the growth compounding effect becomes dramatic — each year of 8% growth adds more absolute dollars than the previous decade. Population: ~105M. GDP target range: $280–350B.
2042–2046 — FYDP VII: The Demographic Dividend Peaks
Tanzania's working-age population share peaks around 2040–2050, creating the maximum opportunity for demographic dividend. If the education and formalisation reforms of FYDP V–VI have held, this is when productivity growth accelerates most sharply. Tourism revenues should be triple 2025 levels. Mining value-addition (lithium, graphite for EV batteries) generating major export earnings. Population: ~118M. GDP must be in the $400–550B range.
2047–2050 — Dira 2050 Deadline: Reality Check
At this moment, Tanzania's GDP will most likely be in the $600–800B range — impressive, transformative, upper-middle-income territory — but not yet $1 trillion. Per capita income will be $5,000–$6,500. This is still a remarkable achievement: Tanzania will have transformed. The $1T milestone is close, not failed. The Dira 2050 framework will likely be extended or succeeded by a new plan completing the final lap.
2058–2062 — TICGL Central Estimate: $1 Trillion Arrives
Under the TICGL 7.5% central scenario, Tanzania crosses $1 trillion between 2058 and 2062. Population ~140–145M. Per capita income ~$7,000–$7,500 — meeting the Dira 2050 per capita target even if the GDP deadline was missed by roughly a decade. Tanzania will be East Africa's largest economy and a genuine continental economic powerhouse. The vision will have been achieved — on a slightly extended timeline driven by the policy gaps identified in this analysis.
🇹🇿
Muhtasari wa Kiswahili — Je, Tanzania Itafikia $1 Trilioni Miaka 10 Baada ya 2050? Mapungufu ya Sera Ndiyo Jibu
Tatizo la msingi ni nini? Tanzania inalenga kufikia uchumi wa dola trilioni moja ($1T) ifikapo mwaka 2050, kama ilivyowekwa katika Dira ya Taifa ya Maendeleo 2050. Lakini TICGL inaona kwamba kwa kasi ya ukuaji wa sasa ya asilimia 5.9, lengo hilo linaweza kufikiwa tu karibu mwaka 2065. Hata kama Tanzania itaongeza kasi hadi asilimia 7.5–8 kwa mwaka — ambayo ni kasi inayohitaji mageuzi makubwa ya kisera — bado tutafika $1 trilioni kati ya mwaka 2058 na 2062. Hii ni miaka 8 hadi 12 baada ya lengo la Dira 2050.
Mapungufu 6 ya sera ndiyo chanzo cha ucheleweshaji: Uchambuzi wa TICGL unaonyesha mapungufu sita makubwa ya kisera ambayo ndiyo yanayotuzuia kufikia uchumi wa $1 trilioni kwa wakati: (1) Kodi ndogo — uwiano wa kodi na pato la taifa ni asilimia 13.1 tu dhidi ya wastani wa SSA wa asilimia 16; (2) Viwanda duni — sekta ya viwanda inachangia asilimia 8.1 tu ya pato la taifa; (3) Sekta binafsi kukandamizwa — serikali inakopa sana katika soko la fedha ikiipokonya sekta binafsi nafasi ya kukopa na kuwekeza; (4) Uchumi usiofaa (informal sector) — asilimia 45–55 ya uchumi haijaingia kwenye mfumo wa kodi na huduma rasmi; (5) Bajeti isiyo na usawa — mishahara inaongezeka kwa asilimia 31.4 huku matumizi ya maendeleo yakipungua; na (6) Ujuzi usiokidhi — mfumo wa elimu hauzalishi wahitimu wenye ujuzi wa viwanda, teknolojia na dijitali.
Bajeti ya 2026/27 inasema nini kuhusu mapungufu haya? Bajeti ya TZS trilioni 62.33 inashughulikia mapungufu mawili kwa kiasi fulani: utekelezaji wa malipo ya kidijitali (yanayoweza kupunguza uchumi usiorasmi) na uwekezaji wa elimu (TZS trilioni 1.58). Lakini mapungufu mazito zaidi yanabaki: hakuna mradi hata mmoja wa PPP uliofika hatua ya kukopeshwa fedha; bill ya mishahara imeongezeka kwa kasi ya mara tano ya ukuaji wa uchumi; na hakuna mkakati mahsusi wa kuongeza sehemu ya viwanda katika pato la taifa.
Je, idadi ya watu itakuwa tatizo? Hapana — hesabu za watu hazifanyi lengo kuwa gumu zaidi. Watu milioni 130 mwaka 2050 wakigawanywa na $1 trilioni = dola $7,692 kwa kila mtu, ambayo inazidi lengo la Dira 2050 la dola $7,000. Tatizo si idadi ya watu — ni ukuaji wa uchumi. Kila asilimia moja ya ukuaji wa ziada kwa mwaka inapelekea kufikia $1T miaka 2–3 mapema zaidi.
Hitimisho la TICGL: Dira 2050 ni dira nzuri na yenye mantiki. Malengo yake yanashikamana kisayansi. Lakini kwa kasi ya sasa ya utekelezaji wa sera, Tanzania itafikia uchumi wa dola trilioni moja kati ya mwaka 2058 na 2062 — miaka kama 10 baada ya lengo. Kufunga mapungufu mitatu au minne ya sera iliyotambuliwa hapo juu — hasa kodi, viwanda, na PPP — kunaweza kuhamisha tarehe hiyo hadi 2054–2056. Dira 2050 siyo ndoto isiyowezekana; ni ndoto inayohitaji kasi ya ziada katika utekelezaji wa kila bajeti ijayo.
Further Reading — TICGL Economic Research
Explore connected TICGL analyses on Tanzania's economic trajectory, investment climate, and development planning.
Tanzania's Real Problem Is Structural, Not Taxes | TICGL Economic Research 2026
TICGL Economic Research · April 2026
Tanzania's Real Problem Is Structural, Not a Matter of Taxes
A comprehensive, data-driven analysis synthesising two TICGL research series: Tanzania's deep-rooted structural constraints across key economic sectors, and why raising taxes alone is demonstrably insufficient for Tanzania's development. The diagnosis is unambiguous — Tanzania sits in a structural trap that higher tax rates cannot unlock.
📊 TICGL Economic Research Unit📍 Dar es Salaam, Tanzania📅 Published: April 11, 2026📚 Sources: World Bank · IMF · FYDP IV · OECD · TRA · TISEZA⏱ ~18 min read
TICGL has published two complementary research series that together make a single, compelling empirical case: Tanzania's development challenge is fundamentally structural — and the instinct to solve it through higher taxes is not only insufficient, it risks compounding the structural trap.
Tanzania is trapped in a low-productivity, high-informality, commodity-dependent, under-financed equilibrium — and a higher Corporate Income Tax rate cannot escape a structural trap. Only structural reform can.
— TICGL Economic Research Unit, synthesising FYDP IV Analysis & Enabler State Research, 2026
⚠️ The Structural Trap Defined
Tanzania's 13.1% Tax-to-GDP ratio sits below the 15% minimum threshold for basic state functions — yet TRA has exceeded revenue targets by over 103% for two consecutive years. The problem is not collection efficiency. It is the narrow tax base and insufficient private sector depth — both products of structural failure, not insufficient tax rates. Raising rates on an already-burdened narrow base is a symptom-treatment, not a cure.
❌ The Wrong Diagnosis
Tanzania's fiscal problem is that taxes are too low
Higher CIT rates will generate more development revenue
TRA collection efficiency is the binding constraint
More tax revenue → more public investment → growth
The 55% informal economy is a tax compliance problem
Sector-level interventions alone can fix the gaps
✓ What the Data Actually Show
Tanzania's fiscal problem is the narrow taxable base — a structural fact
CIT at 30% is already highest in EAC; it deters the investment that would broaden the base
TRA exceeds targets by 103% — collection is not the bottleneck
Private credit at 16.4% of GDP is the binding constraint on productive investment
94.2% informal employment is a structural labour market failure, not a compliance issue
Tanzania's Seven Core Structural Challenges — FYDP IV's Own Admission
FYDP IV is unusual among Tanzania's development plans in the candour of its self-diagnosis. Section 2.7 (Theory of Change) explicitly names seven structural development challenges. These are not risks to manage — they are the structural reality at the moment FYDP IV launches. Critically, the same challenges were identified in FYDP I, II, and III — all unresolved at entry to FYDP IV.
Key Analytical Finding
The fact that these seven structural challenges persist at the entry point of FYDP IV — having been identified in every prior five-year plan — is itself the most important structural finding of this analysis. They represent Tanzania's structural equilibrium, not temporary setbacks.
#
Challenge
Domain
Key Evidence / Indicator
Primary Sectors Affected
SP-1
Low Productivity
Across Productive Sectors
Total factor productivity growth has been insufficient; Tanzania lags well behind regional comparators in agriculture, manufacturing, and services
All Sectors
SP-2
Limited Industrialisation
Industrial Structure
Manufacturing at only 7.3% of GDP, growth at 4.8% — Tanzania remains a raw commodity exporter despite three FYDPs targeting industrialisation
Score 1–10 derived from FYDP IV evidence; higher = more economically damaging
Source: TICGL analysis of FYDP IV (January 2026), Dar es Salaam
Challenge Domain Distribution
How Tanzania's seven core structural challenges span different domains
Source: FYDP IV Section 2.7 — Theory of Change, TICGL mapping
🔴 The 3-Plan Persistence Problem
These seven structural challenges were identified in FYDP I (2011–2016), FYDP II (2016–2021), FYDP III (2021–2026), and now FYDP IV (2026–2031). FYDP III achieved 5.5% growth against an 8% target, with budget execution at only 67%. The failure to break these structural constraints across 15 years of planning is the most important evidence that Tanzania's problem is deep-structural — not a matter of insufficient tax revenue.
Section 02 — The Quantitative Gap
Structural Baselines vs. FYDP IV 2030/31 Targets — Complete Gap Analysis
For many indicators, the required change is 2× to 5× the current level — compressing into five years what would typically take 15–25 years in comparable economies. This table reveals the structural distances that must be bridged through policy, investment, and institutional reform. No amount of tax collection can substitute for closing these gaps.
Sector / Domain
Indicator
Baseline (2023–25)
FYDP IV Target (2031)
Gap / Change Required
Economic Growth
GDP Real Growth Rate
5.5% (2024 actual)
10.5%
×1.9 acceleration
Agriculture (26.3% GDP)
Post-Harvest Losses
35%
10%
−25pp reduction
Agriculture
Agriculture Credit Share
14.9% (2023)
20%
+5.1pp
Agriculture
Agriculture Real Growth Rate
4.1% (2024)
10%
×2.4 faster
Energy (Cornerstone)
Installed Electricity Capacity
4,032 MW (2025)
15,000 MW
×3.7 expansion
Energy
Rural Household Electrification
36% (2025)
42.8%
+6.8pp
Energy
Renewable Energy Share
<2% of mix
≥40%
×20+ scale-up
Finance
DFI Capital Base (% GDP)
0.4% (2024)
≥1.25%
×3.1 increase
Finance
MSMEs with Active Formal Loans
19% (2023)
≥40%
×2.1 expansion
Finance
Rural Population with Microfinance
19% (2023)
≥80%
×4.2 expansion
Human Capital
Workforce with High Skills
3%
12%
×4 increase
Human Capital
Workforce with Low Skills
84%
55%
−29pp reduction
Investment
FDI Inflows
USD 1,717.6M (2024)
USD 8,366M
×4.9 increase
Trade & Exports
Manufactured Goods Export Share
18.6% (non-traditional)
29.59%
+11pp
Informality
Informal Economy (% of GDP)
55% (2023)
29%
−26pp in 5 years
Structural Distance to Target — How Far Is Tanzania From FYDP IV Goals?
Current baseline as % of 2031 target (100% = target already achieved). Shorter bars = larger structural gap.
GDP Real Growth Rate (5.5% → 10.5%)52% of target
Electricity Capacity (4,032 MW → 15,000 MW)27% of target
MSMEs with Formal Loans (19% → 40%)48% of target
Rural Microfinance Access (19% → 80%)24% of target
DFI Capital Base / GDP (0.4% → 1.25%)32% of target
Renewable Energy Share (<2% → 40%)5% of target
FDI Inflows (USD 1.72B → USD 8.37B)21% of target
High-Skills Workforce Share (3% → 12%)25% of target
Agriculture Real Growth Rate (4.1% → 10%)41% of target
Informality Reduction (55% GDP informal → 29%)0% progress recorded
Source: FYDP IV (January 2026) baseline and target data; TICGL structural gap analysis. Informality progress indicator reflects no meaningful reduction since FYDP III.
GDP Growth: Historical Performance vs. FYDP IV Required Trajectory
Actual growth across FYDP I–III vs. the step-change ambition of FYDP IV
Source: AfDB, IMF WEO 2025; FYDP III actuals; FYDP IV 10.5% target
Energy Capacity: Current Baseline vs. 2031 Target
Tanzania must expand from 4,032 MW to 15,000 MW — a 3.7× expansion in 5 years
Source: FYDP IV Energy Sector targets; TANESCO 2025 baseline
Financial Inclusion Gaps: Baseline vs. 2031 Target (%)
Key financial sector indicators showing the structural depth of Tanzania's credit exclusion
Source: Bank of Tanzania; World Bank 2023; FYDP IV Financial Sector targets
Private Sector Credit as % of GDP — Tanzania vs. Comparators (2023)
Private credit is among the strongest predictors of long-run growth — Tanzania is critically behind
Source: World Bank WDI 2023; IMF Article IV 2024; AfDB 2023
The global empirical record is unambiguous: no developing country has achieved structural transformation primarily through tax increases. Countries that have done it — Singapore, Rwanda, Ireland, Estonia, Mauritius, Vietnam, South Korea, Georgia — did so by enabling private capital, not extracting more from a narrow base.
30%
Tanzania CIT — Highest in EAC region
TRA 2024
103%
TRA collection target exceeded for 2 consecutive years
TRA Annual Reports 2024/25
16.4%
Private Credit / GDP — Well below SSA & global peers
IMF 2023
14%
Senior management time on regulations vs. 8% SSA average
IMF Enterprise Survey 2023
141st
Tanzania — World Bank Ease of Doing Business Rank (2020)
The IMF's 2025 Selected Issues Paper on Tanzania provides the most rigorous econometric evidence to date: cumbersome tax administration, limited access to finance, and limited access to transport are statistically significantly associated with lower total factor productivity (TFP) in Tanzania's manufacturing sector. Tanzania's regulatory burden is not a nuisance — it is measurably destroying economic value. The solution is structural, not fiscal.
● Pattern 1
The 15% Threshold Rule
A Tax-to-GDP of ~15% is often cited as the minimum for basic state functions. Beyond this threshold, higher ratios do not automatically translate into faster per-capita GDP growth in developing contexts. Many high-tax developing countries show weaker private-sector dynamism. Tanzania is below this threshold — but the solution is to grow the base, not the rate.
Domestic credit to the private sector and FDI inflows are stronger predictors of long-term growth than raw tax collection. Singapore: >150% private credit/GDP. South Korea: ~176%. Tanzania: 16.4%. Every percentage point increase in private credit/GDP has a measurable multiplier effect on job creation, tax revenue, and GDP.
Tanzania 16.4%vsSingapore >150%vsS. Korea ~176%
Corporate Tax Rates vs. Average Annual GDP Growth
Lower CIT correlates consistently with stronger private investment and growth
Source: OECD, World Bank, IMF 2023–2024. Tanzania CIT 30% with 5.7% growth lags peers with lower CITs.
Tanzania Real GDP Growth — Historical Trend & Projection
Growth has been stable but structurally below the transformation potential required
Source: African Development Bank, IMF WEO October 2025. 2025–2026 are IMF/AfDB projections.
Section 04 — Cross-Sector Analysis
Cross-Sector Structural Problem Matrix — Severity Across 5 Key Sectors
The defining characteristic of Tanzania's structural problems is not that they exist within individual sectors — it is that the same underlying structural constraints recur across every sector simultaneously. This means sector-by-sector interventions, however well-designed, will be insufficient unless the cross-cutting structural roots are addressed.
Structural Problem Pervasiveness — Count of "Critical" Ratings Across All Sectors
Higher bars = more cross-cutting structural blockage. SP-10 (Implementation Failure) and SP-2 (Finance) are the most pervasive.
Source: TICGL cross-sector severity mapping based on FYDP IV sectoral analysis (January 2026)
Section 05 — The Structural Trap
The Mutual Reinforcement Traps — Why Three FYDPs Could Not Break Them
Tanzania's structural problems do not operate independently. They form a self-reinforcing system that makes each problem harder to solve precisely because the others remain unresolved. This is the defining characteristic of a structural trap — and it is why three consecutive five-year plans have failed to break it.
● Critical Linkage 1
Energy Deficit → Manufacturing Stagnation
Energy is the primary input constraint for manufacturing. Without reliable, affordable power, factories cannot operate competitively, investment in productive capacity is discouraged, and manufacturing productivity gains are structurally blocked. Tanzania's 7.3% manufacturing share of GDP after three FYDPs targeting industrialisation is the result.
Shallow financial markets mean insufficient long-term credit for industrial investment; without investment, firms cannot adopt productivity-enhancing technology; without technology, demand for high-skilled workers does not emerge; without demand for skills, the education system does not supply them. A cascading structural chain.
Credit at 16.4% GDP→No tech investment→Skills stagnate→Low productivity
● Critical Linkage 3 — Self-Reinforcing Loop
Informality → Finance Exclusion → Informality
Informal enterprises have no credit history, no collateral, and no formal cash flows — making them unbankable. Without bank credit, they cannot invest in productivity or formalise. Without formalisation, they remain excluded from the financial system. This is a structural chicken-and-egg trap. With 94.2% informal employment, this loop affects virtually the entire Tanzanian workforce.
Tanzania's exports are dominated by gold, agricultural commodities and minerals — all price-takers in global markets. When commodity prices fall, the government cuts capital budgets. When they rise, the pressure to diversify reduces. This creates a self-sustaining commodity dependence cycle that no tax rate increase can interrupt.
Institutional Weakness → Plan Underperformance → Credibility Loss
FYDP III achieved 5.5% growth against an 8% target. Budget execution at 67%. PPP frameworks exist but not operationalised. Each failed plan makes the next harder to credibly implement: investors become sceptical, development partners reduce budget support, and public confidence weakens. The 67% execution rate is the meta-structural constraint on FYDP IV.
67% execution→Targets missed→Credibility lost→Next plan harder
85% of Tanzanian farmland is rain-fed. When droughts occur, agricultural output falls, food prices rise, the current account deteriorates, fiscal pressure mounts, and political pressure shifts to subsidies rather than structural reform. Climate shocks derail structural transformation with regularity — a growing risk under FYDP IV's 2026–2031 window.
Structural Problem Interconnection — How Central Is Each Problem to the Trap?
Times each structural problem appears in mutual reinforcement chains — higher = more central to Tanzania's structural trap
Source: TICGL mutual reinforcement mapping; FYDP IV sectoral analysis 2026
🔴 The Structural Trap Analytical Conclusion
Tanzania's structural problems form an interlocking web. Solving any single problem in isolation does not break the trap — because the other problems immediately re-constrain the solution. Breaking the trap requires simultaneous progress on energy, finance, skills, informality, and institutional capacity. No tax rate increase addresses any of these five dimensions. FYDP IV's sequencing and prioritisation of structural reforms is therefore more important than the individual targets — or revenue targets — themselves.
Section 06 — Global Evidence (8 Countries)
What 8 Global Economies Prove: Enabler Over Tax Collector
Every country that has achieved sustained structural transformation did so by positioning government as an enabler of private capital, not a rate-maximising tax collector. The data from Singapore, Rwanda, Ireland, Estonia, Mauritius, Vietnam, South Korea, and Georgia give a clear, unambiguous answer to Tanzania's policy question.
Corporate Income Tax Rates — Tanzania vs. 8 Comparators (%)
Tanzania's 30% CIT is one of the highest among its development peers
Source: OECD Revenue Statistics 2024; national tax authorities. Tanzania highlighted in red.
Average Annual GDP Growth vs. CIT Rate — 8 Countries + Tanzania
Countries with lower CITs and stronger private enablement consistently grow faster
Source: World Bank WDI 2023; IMF WEO 2024; AfDB Economic Outlook 2024
✅ The South Korea Sequencing Lesson — Most Important for Tanzania
South Korea's Tax-to-GDP rose from ~10–12% to ~28% over four decades — but it rose because the private sector was built first. Tanzania must learn this sequencing: Enable the private sector → broaden the base → collect higher revenues as a consequence of growth, not as a precondition for it. No successful developing economy has ever reversed this sequence and succeeded.
Not a single developing-country success story relied primarily on tax increases without simultaneous private-sector reforms. Enable first. Collect second.
— TICGL Research synthesis of OECD, World Bank, IMF global evidence, 2026
Chanzo cha Utafiti Huu — Source Research Articles
Utafiti Huu Unatokana na Makala Mbili za TICGL
This synthesis research draws directly from two original TICGL publications. For deeper reading, primary data, additional charts, and full citations — access both source articles below. Tunakushukuru kwa kusoma; tafadhali tembelea makala asili kwa maelezo zaidi.
📊 TICGL Research · FYDP IV Cross-Sectoral Analysis
Tanzania's Deep-Rooted Structural Constraints Across Key Economic Sectors
A comprehensive analysis of structural problems persisting across Agriculture, Manufacturing, Energy, Finance, and Governance — and the threats they pose to FYDP IV's USD 183 billion transformation agenda (2026/27–2030/31).
FYDP IV Analysis5 Sectors10 Structural ProblemsPublished March 2026
📈 TICGL Research · Tax Policy & Enabler State Analysis
Why Raising Taxes Alone Is Insufficient for Tanzania's Development
Empirical evidence from 8 global economies demonstrates that the path to sustainable development requires government to act as an enabler of private sector growth — not merely as a tax collector.
8 Country EvidenceTax PolicyFDI & SEZ ReformPublished April 2026
Tanzania's SEZ & EPZ Framework — The TISEZA 2025 Revolution
Tanzania's Special Economic Zones have the architecture of an enabler state — but implementation gaps have historically limited their potential. TISEZA's 2025 reforms are producing dramatic, measurable results: proof that structural reform — not tax increases — drives the transformation Tanzania needs.
37%
FDI Projects Growth Year-on-Year
TISEZA Q1 2025/26 Bulletin
1,053%
EPZ/SEZ Jobs Surge in Q1 2025/26
TISEZA Quarterly Bulletin
204%
EPZ/SEZ Turnover Jump to US$127.53M
TISEZA 2025
212,293
Total Jobs Created in 2024 — Highest Since 1991
TISEZA / TIC 2024
✅ The TISEZA Reform Proof Point
Parliament passed the Tanzania Investment and Special Economic Zones Authority (TISEZA) Act No. 6 of 2025 in February 2025, merging TIC and EPZA into a single streamlined authority. The first full quarter produced extraordinary results: FDI projects up 37%, EPZ/SEZ jobs surging 1,053%, turnover jumping 204%. These are not incremental improvements — they are the structural reform model working in real time. No tax rate change produced these results.
SEZ Employment — Tanzania Historical vs. Global Peers at Peak Year (2008)
Tanzania's SEZ job creation has historically lagged peers dramatically; TISEZA reforms are accelerating catch-up
Source: Charter Cities Institute 2024; UNCTAD; TISEZA 2025
Tanzania EPZ/SEZ Exports as % of National Exports — Historical Trend
SEZ exports have grown from negligible to a meaningful share — but still well below potential
10 of 14 parks still in development; Bagamoyo started Dec 2025
Full infrastructure standard in all SEZs
Mauritius Freeport: world-class logistics
❌ Critical gap — biggest investor constraint
Customs Processing
On-site customs inspection
On-site + pre-clearance
48-hour clearance target
⚠ Adequate — needs digitisation upgrade
🌊
Game Changer · Bagamoyo Eco Maritime City
The Infrastructure Anchor Tanzania Always Needed
After a decade-long delay, the Bagamoyo Eco Maritime City SEZ port construction commenced in December 2025. Spanning 1,000+ hectares on the Indian Ocean coast, the SEZ is designed to add up to 20 million tons of annual cargo capacity — positioning Tanzania as East Africa's maritime gateway. Combined with the standard-gauge railway reducing freight costs by 40%, this represents the most significant enabling infrastructure investment in Tanzania's post-independence history.
1,000+ hectares20M ton/yr targetStarted Dec 2025SGR: −40% freight costs
Section 08 — FDI Revolution 2023–2025
Tanzania's FDI Revolution — What the Data Reveals
Tanzania's FDI story in 2024 is one of the most striking in Sub-Saharan Africa — a 400%+ surge driven entirely by enabling policy reforms, not tax changes. This directly validates the structural argument: when government removes friction, private capital responds.
400%+
FDI Surge: USD 1.3B (2023) → USD 6.56B (2024)
TICGL FDI Analysis 2025
901
FDI Projects Registered in 2024
TIC / TISEZA 2024
28.3%
East Africa's Fastest FDI Growth Rate (Regional avg: 12%)
TICGL 2024
377
Manufacturing FDI Projects Leading All Sectors (2023)
TIC / TISEZA 2023
USD 1.36B
FDI in Q3 of 2024/25 alone
TISEZA Q3 2024/25
#1
Africa's Leading Destination — World Travel Awards 2025
Tanzania's FDI surge did not come from raising the Corporate Income Tax. It came from: (1) Tanzania Investment Act 2022; (2) National Land Policy 2023 — 99-year leases; (3) Electronic Investment Window reducing registration from 60 to 30 days; (4) Formation of TISEZA in 2025. Every major driver was a regulatory/facilitation reform — not a tax rate change.
FDI Inflows: Tanzania vs. EAC Comparators — 2023 vs. 2024 (USD Billions)
Tanzania surged to lead East Africa in FDI growth — driven by structural enabling reforms, not tax changes
Source: UNCTAD; AfDB Economic Outlook 2024; TICGL FDI Analysis 2025.
Section 09 — Business Environment Analysis
The Regulatory Burden — Tanzania's Hidden Implicit Tax on Private Investment
Beyond the formal 30% Corporate Income Tax, a cumbersome regulatory environment functions as an additional implicit tax — reducing productivity, deterring investment, and inflating the cost of doing business. The IMF's 2025 Selected Issues Paper provides econometric proof.
❌ Tanzania's Current Constraints
✗14% of senior management time on regulations vs. 8% SSA average (IMF Enterprise Survey 2023)
✗34% of firms report power outages as a major constraint (World Bank Enterprise Survey 2023)
✗141st out of 190 — Tanzania's last World Bank Ease of Doing Business ranking (2020)
✗Tax administration cited as top barrier to firm productivity — IMF SIP 2025
✗Only 45% of mainland population connected to electricity
✗Land disputes affect ~20% of investment projects
✗266 public parastatals competing with sovereign credit guarantees
✅ What Enabler States Deliver
✓Rwanda: <6 hours company registration (Rwanda Development Board)
✓Estonia: Zero paper bureaucracy — all government services 100% digital
✓Singapore: 1–3 days business registration; ranked #1 globally in EoDB for over a decade
✓Georgia: 5 taxes down from 21 post-2003 reform
✓Vietnam: SEZ investors get on-site all-government services — customs, permits, banking in zone
✓Mauritius: 100% foreign ownership, no capital gains tax, no dividend tax
✓Ireland: Consistent, predictable rule of law — zero retroactive investment contract changes
Business Environment Constraint Priority — Tanzania 2025
Constraint Area
Tanzania Severity
Impact on TFP
Firms Affected
Reform Priority
Tax Administration Complexity
Critical
Statistically Significant Negative (IMF SIP 2025)
Majority of formal firms
🔴 Urgent
Access to Finance / Credit
Critical
Statistically Significant Negative (IMF SIP 2025)
~70% of SMEs
🔴 Urgent
Transport / Logistics Access
High
Statistically Significant Negative (IMF SIP 2025)
Rural & agro-firms especially
🔴 Urgent
Electricity / Power Outages
High
Negative (non-parametric evidence)
34% of firms report as major issue
🟡 High
Regulatory Burden / Licensing
High
Negative (non-parametric evidence)
14% management time consumed
🟡 High
Land Acquisition & Title
Moderate-High
Reduces investment certainty
~20% of investment projects
🟡 High
Corruption / Facilitation Payments
Improving
No significant regression evidence (2023)
TI score improved 86% since 2001
🔵 Continue Progress
Trade & Cross-Border Obstacles
Moderate
Reduces export competitiveness
Export-oriented firms
🟡 High
Regulatory Compliance Burden — Management Time on Regulations (%)
Tanzania's 14% vs. SSA average 8% represents a 6pp productivity gap — a hidden implicit tax on every productive business
Source: IMF Enterprise Survey 2023; World Bank Enterprise Survey 2023; TICGL compilation
Section 10 — Policy Roadmap
From Tax Collector to Enabler State — A Data-Driven Policy Roadmap
Drawing on the 8-country evidence base and Tanzania's own structural baseline, this roadmap outlines specific, sequenced reforms with measurable targets at each stage.
01
Immediate Priority · 0–12 Months
Reform Corporate Tax: Target 20–25% CIT with Broad Preferential Regime
Reduce the standard CIT from 30% to 20–25%, bringing Tanzania in line with regional peers. Simultaneously, expand preferential CIT rates (15%) for priority sectors: agro-processing, manufacturing, ICT, and renewable energy. Revenue cost will be recovered within 2–3 years through an expanded tax base — as demonstrated in Ireland (2003), Rwanda, and Vietnam.
Accelerate TISEZA & SEZ Infrastructure — Complete the Bagamoyo Catalyst
TISEZA has demonstrated proof-of-concept: 1,053% surge in SEZ jobs in one quarter. Priority: complete Bagamoyo Eco Maritime City on schedule, electrify all 14 EPZ/SEZ parks, reduce company registration to under 5 days (from 30), implement digital customs clearance. Tanzania's SEZ exports were only 2.5% of national exports in 2016 — they should reach 10–15% within a decade if infrastructure constraints are resolved.
Registration → <5 daysAll 14 parks poweredBagamoyo Phase 1: 2027
03
Medium-Term · 1–3 Years
Resolve the Private Credit Gap — Double Private Sector Credit to GDP
Tanzania's private sector credit at 16.4% of GDP is one of the most binding constraints on growth. IMF confirms access to finance is the single biggest productivity constraint for Tanzanian manufacturers. Required: expand credit bureau coverage, establish collateral registry legal framework, reduce NPL thresholds, promote SME development finance. Target: private credit/GDP to 30–35% within 5 years.
Slash the Regulatory Burden — Implement Blueprint for Regulatory Reform II at Speed
Tanzania's MKUMBI II reform blueprint exists — but implementation has been described as "incremental." Target: reduce senior management time on regulations from 14% to below the SSA average of 8% within 3 years. Digitise all government-business interactions, establish firm timelines with automatic approval if deadline is missed.
Mgmt time → <8%All biz services digital by 2027
05
Structural · 3–7 Years
Restructure Public Spending — Shift from Recurrent to Capital & Human Capital
Tanzania's recurrent spending consumes 58–70% of the budget — leaving too little for education (3.3% of GDP vs. UNESCO benchmark of 4–6%) and health (1.2% of GDP vs. WHO benchmark of 5%). The IMF benchmarking shows Tanzania needs a 14pp increase in private sector participation in education and 23pp in health.
Once private sector activity has expanded and regulatory friction reduced, the natural result is a broader tax base. With nominal GDP at TZS 275 trillion in 2026, each 1pp increase in the tax-to-GDP ratio represents TZS 2.75 trillion in revenue. The goal is 16–18% tax-to-GDP through a broader base — not higher rates on the existing narrow base.
Tax-to-GDP → 16–18% by 2030Via broader base, not higher rates
Enabler State Roadmap — Key Metric Targets vs. Current Status
TICGL projection based on Rwanda, Vietnam and Ireland reform trajectories. Current = 2025; Target = 2030 aspirational benchmark.
Targets are TICGL analytical estimates. Sources: IMF WEO 2025; World Bank; TISEZA; TRA; MoFP.
A rigorous response to the most common counter-arguments against the enabler-state model for Tanzania.
Ireland reduced its CIT from 32% to 12.5% and saw corporate tax revenue increase dramatically because the tax base expanded through FDI inflows. Rwanda's preferential 15% CIT has not reduced revenues — it has expanded them. A lower rate on a broader, growing base generates more revenue than a higher rate on a narrow, shrinking base. Tanzania's TRA already exceeds targets by 103% — the bottleneck is not collection efficiency but the narrow taxable base.
Tanzania's nominal GDP is estimated at TZS 275 trillion in 2026. Every 1pp increase in the tax-to-GDP ratio equals TZS 2.75 trillion in additional revenue. The fastest path to that additional revenue is enabling enough private sector growth that the formal economy doubles in size — at the current 13.1% rate that would nearly double revenue. Vietnam grew its revenue base by presiding over two decades of 6–7% private sector-led GDP growth, not by raising rates.
The 400%+ FDI surge was driven entirely by enabling reforms (TISEZA, Investment Act 2022, land lease policy) — not by the tax regime. Private sector credit remains at only 16.4% of GDP, manufacturing has been stagnant at ~8% of GDP for three decades, and 94.2% of employment is informal. The FDI surge proves the enabler model works — it is an argument for doing more of it, not reversing course with tax increases.
Rwanda — one of the region's strongest private-sector enablers — has achieved significant poverty reduction over the same period. Private sector-led growth creates formal employment, the most sustainable poverty reduction mechanism. Tanzania's poverty rate increased during COVID (from 26.1% to 27.7%) — a period of economic slowdown. Tax equity is best achieved through progressive consumption taxes and personal income taxes — not punitive corporate rates that reduce investment and employment.
Rwanda is a landlocked African country with a smaller GDP than Tanzania, and it has achieved 7–9% sustained growth through the same private-sector enablement principles. Vietnam is a large developing country — comparable in population to Tanzania — that used SEZ incentives and regulatory reform (not high taxes) to achieve industrialisation. The principles are universal; only the specific policy mechanisms need adapting to Tanzania's context.
Section 12 — Research Conclusion
The Choice Before Tanzania — Enable First, Collect Second
Tanzania stands at a genuine inflection point. The enabling reforms of 2022–2025 have already triggered a measurable private investment response. The question is whether Tanzania will consolidate this momentum or retreat toward higher rates on a narrow base.
The Enabler State Virtuous Cycle — Growth, Revenue & Private Investment
Stylised projection based on Tanzania's data and Rwanda/Ireland/Vietnam trajectories
Source: TICGL Research Unit 2026. Illustrative projection. Rwanda: 7–9% sustained growth corridor. Ireland: CIT reduction led to higher corporate tax revenues within 5 years.
Finding 01
Tanzania's Structural Constraints Are Real and Documented
Ten structural constraints across five sectors form an interlocking trap persisting across three FYDPs. FYDP IV's own Theory of Change acknowledges this. The diagnosis is not contested.
Finding 02
No Tax Rate Increase Can Address a Structural Trap
Higher CIT rates cannot build energy infrastructure. They cannot formalise 94.2% informal employment. They cannot deepen private sector credit from 16.4% to 35% of GDP. Only structural reform can.
Finding 03
Tanzania's Own 2024 Data Prove the Enabler Model Works
FDI surged 400%. EPZ/SEZ jobs surged 1,053%. 212,293 jobs — highest since 1991. Not one result came from a tax rate change. All came from structural enabling reforms.
"
Tanzania's Vision 2050 goal of an industrialised, upper-middle-income economy will not be achieved by raising the Corporate Income Tax from 30% to anything higher. It will be achieved by reducing it, completing Bagamoyo, fixing the private credit market, and trusting the private sector to be the engine of structural transformation.
— TICGL Economic Research Unit, April 2026
Serikali lazima iwe enabler — si mkusanyaji wa kodi tu.
The data are clear. The path is proven. The time is now.
📚 Soma Zaidi — Read the Original TICGL Research
Want the Full Data, Charts & Detailed Analysis?
Access both original TICGL research articles that power this synthesis — complete with additional charts, extended methodology, primary data tables, and sector-specific deep dives.
📌 Citation: TICGL Economic Research Unit (2026). Tanzania's Real Problem Is Structural, Not a Matter of Taxes: Synthesising FYDP IV Cross-Sector Structural Analysis and the Global Case for the Enabler State. Tanzania Investment and Consultant Group Ltd, Dar es Salaam. Data sources: FYDP IV (January 2026); World Bank WDI 2023; IMF WEO & Article IV Consultation 2024–2025; OECD Revenue Statistics 2024; African Development Bank Economic Outlook 2024; TRA Annual Reports 2024/25; TISEZA Quarterly Investment Bulletins 2025; IMF Selected Issues Paper SIP/2025/098.
Tanzania National Debt Analysis 2026 | BOT Monthly Economic Review | TICGL
BOT Monthly Economic Review · March 2026
Tanzania National Debt: Deep-Dive Analysis — February 2026
A comprehensive breakdown of Tanzania's total national debt of USD 51.1 billion — covering external obligations, domestic instruments, creditor structures, currency composition and debt-service trajectories as reported by the Bank of Tanzania.
📅 Reference Period: February 2026🏦 Source: Bank of Tanzania✍️ Analysis: TICGL Research📍 Dar es Salaam
Total National Debt
$51.1B
USD Millions · Feb 2026
▼ 0.2% MoM
External Debt Stock
$35.9B
70.2% of total debt
▼ 0.1% MoM
Domestic Debt Stock
TZS 38.8T
≈ USD 15.3B
▲ 0.5% MoM
Multilateral Share
57.8%
Of external debt stock
Largest creditor category
USD Dominance
66.0%
Currency composition
Euro: 17.7%
National Debt Overview
Tanzania's total national debt — comprising both external and domestic obligations — stood at USD 51,112.8 million at end-February 2026, reflecting a marginal contraction of 0.2% from January 2026.
Total Debt (Feb 2026)
$51,112.8M
National debt stock, USD millions
External Debt Share
70.2%
of total national debt
Domestic Debt Share
29.8%
of total national debt
MoM Change
▼ 0.2%
vs. January 2026
Key Context: Tanzania's national debt split of 70.2% external / 29.8% domestic reflects the country's continued reliance on concessional external financing to fund infrastructure and development programmes. The slight overall contraction in February 2026 was driven primarily by a small decline in the external debt portfolio.
Total Debt Composition
Feb 2026 · USD Millions
Source: Ministry of Finance & Bank of Tanzania
Total Debt Stock — Monthly Trend
Feb 2025 – Feb 2026 · USD Millions
Source: Bank of Tanzania, Table A10
External Debt Analysis
Tanzania's external debt (public and private combined) reached USD 35,859.1 million at end-February 2026 — a decline of 0.1% from January 2026. Central government accounts for the dominant share at 82.7%.
External Debt Stock
$35,859.1M
End Feb 2026 (provisional)
Public Debt Share
82.7%
Central government
Private Sector Share
17.3%
Of external debt
Disbursements (Feb)
$83.8M
Mainly central govt
Debt Service (Feb)
$98.9M
Principal + Interest
External Debt Stock by Borrower
USD Millions · Feb-25 vs Jan-26 vs Feb-26
Borrower Category
Feb-25 (USD M)
Share %
Jan-26 (USD M)
Share %
Feb-26 (USD M)
Share %
Central Government
26,394.4
80.5%
29,687.2
82.7%
29,640.4
82.7%
Disbursed Outstanding (DOD)
26,317.1
80.3%
29,606.9
82.5%
29,560.2
82.4%
Interest Arrears
77.3
0.2%
80.3
0.2%
80.2
0.2%
Private Sector
6,389.9
19.5%
6,204.7
17.3%
6,218.7
17.3%
Disbursed Outstanding (DOD)
5,827.2
17.8%
5,770.3
16.1%
5,774.3
16.1%
Interest Arrears
562.8
1.7%
434.3
1.2%
444.5
1.2%
Public Corporations
3.8
0.0%
0.0
0.0%
0.0
0.0%
Total External Debt
32,788.0
100%
35,891.9
100%
35,859.1
100%
Source: Ministry of Finance and Bank of Tanzania · p = provisional data
External Debt Trend — Monthly
Feb 2025 – Feb 2026 · USD Millions (Selected months)
Source: Bank of Tanzania, Table A10
Creditor Composition
Multilateral institutions remain the dominant creditors at 57.8% of the external debt stock, followed by commercial lenders at 35.7%. Bilateral creditors account for just 4.4%.
Creditor Composition — Feb 2026
Percentage share of external debt stock
Multilateral57.8% · $20,730.5M
Commercial35.7% · $12,818.5M
Bilateral4.4% · $1,581.3M
Export Credit2.0% · $728.8M
External Debt by Creditors — Detail
USD Millions
Creditor
Feb-25
Jan-26
Feb-26
Share %
Multilateral
18,366.1
20,788.2
20,730.5
57.8%
DOD
18,335.1
20,765.1
20,707.6
57.7%
Interest Arrears
31.0
23.2
22.9
0.1%
Bilateral
1,349.5
1,591.6
1,581.3
4.4%
Commercial
11,918.0
12,786.3
12,818.5
35.7%
DOD
11,557.7
12,427.9
12,452.9
34.7%
Interest Arrears
360.3
358.4
365.6
1.0%
Export Credit
1,154.5
725.7
728.8
2.0%
Total
32,788.0
35,891.9
35,859.1
100%
Source: Ministry of Finance and Bank of Tanzania
Debt by Borrower Category
Central government dominates at 82.7% of total external debt. The private sector's share has slightly declined while public corporations now hold zero outstanding external debt.
Borrower Share Evolution — Feb 2025 to Feb 2026
Percentage share of disbursed outstanding debt
Source: Ministry of Finance and Bank of Tanzania
Notable: Public corporations (TANESCO, ATCL, TRC, TPA, TFC and DAWASA) now hold zero outstanding external debt as at February 2026, compared to USD 3.8 million in February 2025 — reflecting debt clearance efforts within state-owned enterprises.
Currency Composition of External Debt
The US Dollar dominates Tanzania's external debt currency mix at 66.0%, followed by the Euro at 17.7% and Chinese Yuan at 6.5%. This concentration creates exchange-rate sensitivity.
Currency Breakdown — Feb 2026
% share of disbursed outstanding debt
🇺🇸 US Dollar66.0% · $23,317.8M
🇪🇺 Euro17.7% · $6,255.8M
🇨🇳 Chinese Yuan6.5% · $2,306.3M
🌐 Other Currencies9.8% · $3,454.6M
Currency Composition Trend
% share — Feb 2025 vs Jan 2026 vs Feb 2026
Currency
Feb-25
Jan-26
Feb-26
US Dollar
67.6%
65.9%
66.0%
Euro
16.7%
17.7%
17.7%
Chinese Yuan
6.3%
6.5%
6.5%
Other
9.3%
9.8%
9.8%
Total
100%
100%
100%
Source: Ministry of Finance and Bank of Tanzania
Disbursed Outstanding Debt by Use of Funds
BoP & budget support and transport/telecommunications jointly account for over 44% of total disbursed external debt. Social welfare and education holds a significant 19.3% share.
Use of Funds — Percentage Share
Feb 2025 vs Feb 2026 (Provisional)
Source: Ministry of Finance and Bank of Tanzania
Use of Funds — Detailed Breakdown
% share of disbursed outstanding debt
Activity
Feb-25 (%)
Jan-26 (%)
Feb-26 (%)
Change
BoP & Budget Support
20.9
22.6
22.5
+1.6pp YoY
Transport & Telecommunication
21.2
21.8
21.9
+0.7pp YoY
Social Welfare & Education
20.0
19.4
19.3
−0.7pp YoY
Energy & Mining
13.1
12.0
12.0
−1.1pp YoY
Real Estate & Construction
4.8
4.9
4.9
+0.1pp YoY
Finance & Insurance
4.5
3.5
3.5
−1.0pp YoY
Agriculture
4.8
5.3
5.3
+0.5pp YoY
Industries
3.6
3.7
3.7
+0.1pp YoY
Tourism
1.6
1.8
1.8
+0.2pp YoY
Other
5.5
4.9
4.9
−0.6pp YoY
Total
100.0
100.0
100.0
—
pp = percentage points · Source: Ministry of Finance and Bank of Tanzania
Domestic Debt Analysis
Tanzania's domestic debt stock reached TZS 38,781.7 billion at end-February 2026, a 0.5% monthly increase. Treasury bonds dominate at 80.8% of total domestic debt, held predominantly by commercial banks and pension funds.
Domestic Debt Stock
TZS 38.8T
End Feb 2026 (provisional)
Treasury Bonds Share
80.8%
Of government securities
MoM Change
+0.5%
vs. January 2026
Govt Securities Issued
TZS 621.9B
In February 2026
Debt Servicing (Feb)
TZS 875.2B
Principal + Interest
Domestic Debt by Borrowing Instrument
TZS Billions · Feb 2026 (Provisional)
Instrument
Feb-25 (TZS B)
Feb-26 (TZS B)
Share %
Government Bonds
27,073.7
31,333.2
80.8%
Treasury Bills
1,847.4
1,653.0
4.3%
Government Stocks
187.1
135.7
0.4%
Tax Certificates
0.1
0.1
0.0%
Overdraft (Non-Securitised)
4,887.5
5,659.6
14.6%
Total
34,014.1
38,781.7
100%
Source: Ministry of Finance and Bank of Tanzania
Domestic Debt by Creditor Category
TZS Billions · Feb 2026 (Provisional)
Holder
Feb-25 (TZS B)
Feb-26 (TZS B)
Share %
Commercial Banks
9,791.4
10,834.3
27.9%
Pension Funds
9,097.2
10,463.9
27.0%
Bank of Tanzania
6,847.5
7,468.4
19.3%
Others
5,872.8
7,273.8
18.8%
Insurance
1,852.3
1,983.5
5.1%
BOT Special Funds
552.7
757.8
2.0%
Total
34,014.1
38,781.7
100%
Source: Ministry of Finance and Bank of Tanzania
Domestic Debt Stock — Historical Trend
TZS Billions · Feb 2018 – Feb 2026
Source: Ministry of Finance
Commercial Banks & Pension Funds collectively hold 54.9% of Tanzania's domestic debt — TZS 21,298.2 billion — underscoring the banking sector's key role as a financing conduit for government operations and the importance of pension fund governance in debt sustainability.
Debt Service Flows — February 2026
In February 2026, Tanzania's external debt service totalled USD 98.9 million while domestic debt servicing reached TZS 875.2 billion. Net external flows remained positive at USD 48.4 million.
External Debt Service — Feb 2026
USD Millions
Total Service
$98.9M
Feb 2026
Principal
$35.4M
Repayments
Interest
$63.5M
Payments
Source: Bank of Tanzania, Table A10
Domestic Debt Service — Feb 2026
TZS Billions
Total Service
TZS 875.2B
Feb 2026
Principal
TZS 472.2B
Repayments
Interest
TZS 403.0B
Payments
Source: Bank of Tanzania
External Debt Service — Monthly Trend
USD Millions · Feb 2025 – Feb 2026 (Selected Months)
Source: Bank of Tanzania, Table A10
Historical Debt Trend — Tanzania
Tanzania's external debt has grown significantly over the decade, rising from USD 20.5 billion in 2018 to USD 35.9 billion in February 2026 — an increase of approximately 75% over eight years.
Annual External & Domestic Debt Stock
USD Millions · Annual Data (Selected Economic Indicators)
Year
External Debt (USD M)
Domestic Debt (TZS B equiv.)
Disbursed (USD M)
Interest Arrears (USD M)
2018
20,503.0
13,742
18,765.1
1,737.9
2019
21,920.9
14,069
20,029.3
1,891.7
2020
22,952.7
14,644
20,958.4
1,994.3
2021
25,519.3
15,874
23,250.9
2,268.4
2022
27,832.5
22,159
25,392.8
2,439.7
2023
30,252.7
27,267
27,889.3
2,363.4
2024
31,950.9
31,739
30,416.1
1,534.8
2025p
34,765.3
34,014
34,053.0
712.3
Feb 2026p
35,859.1
38,782
35,334.4
~525
Source: Bank of Tanzania Selected Economic Indicators (Table A1) & Table A10 · p = provisional
Positive Trend: Despite rising debt levels, interest arrears have declined sharply from a peak of USD 2,439.7 million in 2022 to approximately USD 524.7 million in February 2026 — a 78% reduction — signalling improved debt management discipline and timely servicing by the Government of Tanzania.
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Tanzania Financial Markets 2026: Government Securities & Interbank Cash Market | TICGL
Market Data LiveBoT MER · March 2026Section 2.4TICGL Financial Intelligence
TANZANIA FINANCIAL MARKETS
Comprehensive intelligence on Tanzania's government securities market and interbank cash market as of February 2026 — auction performance, yield compression, liquidity dynamics, and rate structure across all tenors.
📅 Data Period: Feb-26🏦 Source: Bank of Tanzania📊 Section 2.4 · Table A4🗓️ Published: Apr-2026
T-Bill WAY (Overall)
5.68%
▼ from 5.89% Jan-26
IBCM Rate (Overall)
6.34%
▼ from 6.40% Jan-26
25-Yr Bond Yield
11.99%
▼ from 13.19% Jan-26
T-Bill WAY (Feb-26)
5.68%
Overall Weighted Avg Yield
▼ −21bps MoM
T-Bill Tender (Feb-26)
1,061.4B
TZS · Total bids received
2.4x oversubscribed
T-Bill Successful Bids
431.1B
TZS · vs Offer 440.9B
97.8% of offer
15-Yr Bond WAY
10.78%
Feb-26 · Down from 12.08%
▼ −130bps
25-Yr Bond WAY
11.99%
Feb-26 · Down from 13.19%
▼ −120bps
IBCM Total Volume
2,796.5B
TZS · Feb-26
▼ from 2,868.9B
IBCM Overall Rate
6.34%
Feb-26 · Eased
▼ from 6.40% Jan-26
7-Day IBCM Share
63.5%
of total activity
Dominant tenor
GOVERNMENT SECURITIES — TREASURY BILLS
Tanzania's Treasury bill market was characterised by persistent oversubscription in February 2026, reflecting robust investor appetite driven by stable macroeconomic conditions. The Bank conducted two auctions with a combined tender size of TZS 440.9 billion, attracting total bids of TZS 1,061.4 billion — a tender-to-offer ratio of approximately 2.4x. The surge in demand compressed the overall weighted average yield (WAY) further to 5.68 percent from 5.89 percent in January 2026, continuing a structural downward trend from the 11.93 percent recorded in February 2025.
TENDER vs OFFER RATIO (All T-Bills)2.41x OVERSUBSCRIBED
0Offer: TZS 440.9BTender: TZS 1,061.4B →
BOND TENDER vs OFFER (15+25-Yr Combined)6.95x OVERSUBSCRIBED
0Offer: TZS 399.5BBids: TZS 2,778.1B →
// T-BILL WAY TREND — Jan-25 to Feb-26
Overall Weighted Average Yield (%) · Monthly
// AUCTION PERFORMANCE — Offer vs Tender vs Successful (TZS B)
Feb-25 to Feb-26 · Monthly
// T-BILL YIELDS BY TENOR — Monthly Trend (Jan-25 to Feb-26)
Weighted Average Yield (%) for 35, 91, 182, 364-Day Treasury Bills
// TABLE A4 — TREASURY BILL RATES (Selected Months)
% per annum · Source: Bank of Tanzania MER March 2026
Tenor
Jan-25
Feb-25
Mar-25
Apr-25
Jun-25
Aug-25
Oct-25
Dec-25
Jan-26
Feb-26
YoY Δ (bps)
35-Day
6.50
6.50
6.50
6.50
6.50
6.50
5.64
5.38
5.36
4.75
▼ −175
91-Day
7.76
7.76
7.42
7.50
7.50
7.36
6.08
5.93
5.73
4.97
▼ −279
182-Day
8.20
8.20
8.20
8.47
8.24
7.46
5.92
5.91
5.85
5.85
▼ −235
364-Day
12.63
11.99
10.11
8.92
8.92
6.79
6.45
6.24
6.21
6.20
▼ −579
Overall WAY
12.51
11.93
10.10
8.86
8.89
6.83
6.25
5.87
5.89
5.68
▼ −625
Source: Table A4 — Interest Rates Structure · Bank of Tanzania MER March 2026 · bps = basis points
GOVERNMENT SECURITIES — TREASURY BONDS
The Bank conducted auctions for 15-year and 25-year Treasury bonds in February 2026, offering a combined tender size of TZS 399.5 billion. These attracted exceptional demand with bids worth TZS 2,778.1 billion — a 6.95x oversubscription ratio — of which TZS 520.2 billion were successful. Weighted average yields to maturity fell sharply: the 15-year bond to 10.78 percent and the 25-year bond to 11.99 percent.
Treasury Bond · Feb-26 Combined
15-Year & 25-Year
COMBINED OFFER (TZS B)399.5
TOTAL BIDS (TZS B)2,778.1
SUCCESSFUL (TZS B)520.2
BID-TO-OFFER RATIO6.95x
Treasury Bond · 15-Year
15-Year Government Bond
WAY TO MATURITY (%)10.78
PREV MONTH (%)12.08
FEB-25 (%)15.76
YoY CHANGE (BPS)▼ −498bps
MoM CHANGE (BPS)▼ −130bps
Treasury Bond · 25-Year
25-Year Government Bond
WAY TO MATURITY (%)11.99
PREV MONTH (%)13.19
FEB-25 (%)15.84
YoY CHANGE (BPS)▼ −385bps
MoM CHANGE (BPS)▼ −120bps
// BOND YIELDS BY TENOR — Monthly Trend (Jan-25 to Feb-26)
2-Yr, 5-Yr, 10-Yr, 15-Yr, 25-Yr · % per annum
// BOND AUCTION: OFFER vs BIDS vs SUCCESSFUL (TZS B)
Monthly Bond Issuance for Financing · Feb-25 to Feb-26
// TABLE A4 — TREASURY BOND RATES (Selected Months)
% per annum · Source: Bank of Tanzania MER March 2026
Tenor
Jan-25
Feb-25
Apr-25
Jun-25
Aug-25
Oct-25
Dec-25
Jan-26
Feb-26
YoY Δ (bps)
2-Year Bond
11.64
12.55
12.08
12.08
12.17
10.05
10.05
10.05
10.05
▼ −250
5-Year Bond
12.41
12.41
13.14
12.94
13.18
10.54
10.54
10.54
10.54
▼ −187
7-Year Bond
9.71
9.71
9.71
9.71
9.71
9.71
9.71
9.71
9.71
→ 0
10-Year Bond
14.08
14.08
14.26
14.26
13.74
12.45
12.45
11.30
11.30
▼ −278
15-Year Bond
15.76
15.76
14.63
14.63
13.91
12.08
12.08
12.08
10.78
▼ −498
20-Year Bond
15.71
15.28
15.11
14.50
14.50
13.55
12.02
12.02
12.02
▼ −326
25-Year Bond
15.84
15.84
15.84
14.80
14.42
13.19
13.19
13.19
11.99
▼ −385
Source: Table A4 — Interest Rates Structure · Bank of Tanzania MER March 2026 · bps = basis points
TANZANIA YIELD CURVE
The Tanzania government securities yield curve has undergone dramatic bull-flattening over the past twelve months. Short-end yields have collapsed by over 600 basis points while long-end yields have declined 300–500 basis points, reflecting improving macroeconomic conditions, strong liquidity in the banking system, and BoT monetary policy anchoring via the 5.75% Central Bank Rate.
// TANZANIA SOVEREIGN YIELD CURVE — Three-Period Comparison
Feb-25 · Jan-26 · Feb-26 · % per annum · All Tenors from 35-Day to 25-Year
// CURRENT YIELD SNAPSHOT — February 2026 · % per annum
35-Day
4.75
T-Bill
▼ −175bps YoY
91-Day
4.97
T-Bill
▼ −279bps YoY
182-Day
5.85
T-Bill
▼ −235bps YoY
364-Day
6.20
T-Bill
▼ −579bps YoY
2-Year
10.05
T-Bond
▼ −250bps YoY
5-Year
10.54
T-Bond
▼ −187bps YoY
7-Year
9.71
T-Bond
→ 0bps
10-Year
11.30
T-Bond
▼ −278bps YoY
15-Year
10.78
T-Bond
▼ −498bps YoY
20-Year
12.02
T-Bond
▼ −326bps YoY
25-Year
11.99
T-Bond
▼ −385bps YoY
CBR (Policy)
5.75
BoT Anchor
Q1 2026
Source: Table A4 · Bank of Tanzania MER March 2026 · CBR = Central Bank Rate (held at 5.75% for Q1 2026)
INTERBANK CASH MARKET
The interbank cash market (IBCM) continued to facilitate shilling liquidity trading among banks in February 2026. Total transaction value decreased slightly to TZS 2,796.5 billion from TZS 2,868.9 billion. The market remained dominated by 7-day transactions at 63.5 percent of total activity. The overall IBCM rate eased to 6.34 percent from 6.40 percent, consistent with adequate banking system liquidity and the CBR anchor of 5.75 percent.
Total Volume (Feb-26)
2,796.5B
TZS · ▼ from 2,868.9B Jan-26
7-Day Share
63.5%
Dominant tenor · Short-term preference
Overall IBCM Rate
6.34%
▼ from 6.40% Jan-26
Overnight Rate
6.01%
▼ from 6.13% Jan-26
7-Day Rate
6.31%
▼ from 6.34% Jan-26
Policy Rate (CBR)
5.75%
Q1 2026 · IBCM spread: +59bps
// IBCM TOTAL VOLUME & RATE TREND (Jan-25 to Feb-26)
TZS Billions (LHS) · Rate % (RHS)
// IBCM TRANSACTION STRUCTURE — Feb-26
Share by Tenor: 7-Day vs Overnight vs Other
// IBCM 7-DAY RATE vs CBR POLICY RATE — Jan-25 to Feb-26
% per annum · Upper Band (+2pp) & Lower Band (−2pp) shown
% per annum · Source: Bank of Tanzania MER March 2026
Tenor
Jan-25
Feb-25
Apr-25
Jun-25
Aug-25
Oct-25
Dec-25
Jan-26
Feb-26
MoM Δ (bps)
Overnight
7.69
7.87
7.90
7.93
6.15
6.45
6.00
6.13
6.01
▼ −12
2–7 Day
7.74
8.02
7.98
7.96
6.52
6.29
6.30
6.34
6.31
▼ −3
8–14 Day
8.51
8.62
8.08
8.12
6.71
6.92
6.26
6.74
6.83
▲ +9
15–30 Day
8.58
8.77
8.37
6.95
6.87
7.07
6.40
7.06
6.96
▼ −10
31–60 Day
9.03
8.00
8.53
8.53
6.90
7.28
7.20
7.23
7.00
▼ −23
61–90 Day
6.75
7.00
9.11
9.14
9.14
9.14
8.11
9.96
7.00
▼ −296
91–180 Day
7.87
10.42
12.00
12.00
7.00
9.75
8.89
6.75
7.00
▲ +25
181+ Day
10.93
10.93
10.93
10.93
10.93
10.93
10.93
10.93
12.00
▲ +107
Overall IBCM Rate
7.80
8.06
8.00
7.94
6.48
6.38
6.29
6.40
6.34
▼ −6
Source: Table A4 — Interest Rates Structure · Bank of Tanzania MER March 2026 · bps = basis points
// REVERSE REPO RATE
The reverse repo rate was maintained at 5.75% throughout January and February 2026, aligned with the CBR. BoT used reverse repo operations to absorb excess shilling liquidity and steer the 7-day IBCM rate within the ±2 percentage point corridor around the CBR (3.75%–7.75%). The IBCM rate of 6.34% sits comfortably within this band, confirming the effectiveness of the current monetary policy transmission mechanism.
LENDING & DEPOSIT RATE STRUCTURE
Commercial bank interest rates remained broadly stable in February 2026, with the overall lending rate virtually unchanged at 15.11 percent. Negotiated rates for prime customers continued to compress, while the short-term interest rate spread narrowed to 5.59 percentage points — the tightest in the observed period.
% per annum · Source: Banks and Bank of Tanzania Computations
Rate Type
Feb-25
Mar-25
Apr-25
Dec-25
Jan-26
Feb-26
MoM Δ (bps)
// LENDING RATES
Overall Lending Rate
15.14
15.50
15.16
15.24
15.10
15.11
▲ +1
Short-Term Lending (Up to 1 Yr)
15.77
15.83
16.15
15.46
15.49
15.41
▼ −8
Negotiated Lending Rate
13.42
12.94
12.88
12.38
12.25
12.19
▼ −6
// DEPOSIT RATES
Savings Deposit Rate
2.98
2.86
2.89
3.02
2.94
2.98
▲ +4
Overall Time Deposit Rate
8.13
8.00
7.82
8.36
8.33
8.32
▼ −1
12-Month Deposit Rate
9.48
8.14
9.27
9.58
9.70
9.82
▲ +12
Negotiated Deposit Rate
11.40
10.35
10.52
11.66
11.74
11.48
▼ −26
Short-Term Interest Rate Spread
6.29
7.69
6.88
5.88
5.79
5.59
▼ −20
Source: Table 2.3.1, Banks and Bank of Tanzania Computations · bps = basis points · pp = percentage points
TICGL MARKET ANALYSIS
TICGL's independent financial market intelligence for Tanzania's government securities and interbank markets — February 2026.
// FIVE KEY MARKET SIGNALS — TICGL RESEARCH
1. Historic Yield Compression: Short-End Has Repriced by Over 600bps. The 364-day T-bill yield has fallen from 11.99 percent (February 2025) to 6.20 percent (February 2026) — a 579 basis point decline in twelve months. The overall T-bill WAY dropped from 11.93 percent to 5.68 percent over the same period. This is among the most aggressive short-end repricing episodes in Tanzania's recent market history. Drivers include the BoT's shift to an interest-rate based monetary policy framework, excess banking system liquidity, and strong domestic investor demand for government paper.
2. Bond Market Oversubscription at 6.95x — A Structural Demand Signal. The extraordinary bid-to-offer ratio of 6.95x for the 15/25-year bond auction in February 2026 — with TZS 2,778.1 billion in bids against a TZS 399.5 billion offer — signals a deep structural demand imbalance for long-duration Tanzania sovereign debt. Pension funds, insurance companies, and commercial banks are competing aggressively for limited supply. TICGL expects the government will capitalise on this demand to gradually extend the yield curve beyond 25 years.
3. Yield Curve Inversion Alert: 7-Year Bond at 9.71% vs 15-Year at 10.78%. The 7-year government bond yields 9.71 percent — lower than the 10-year (11.30%), 15-year (10.78%), and 20-year (12.02%) bonds. This local inversion at the 7-year point is technically unusual and may reflect illiquidity in that specific tenor rather than a macroeconomic signal. The BoT may wish to conduct targeted 7-year reopening auctions to normalise the mid-curve.
4. IBCM Liquidity is Adequate — But Duration Preference is Telling. The 63.5% dominance of 7-day transactions in the IBCM reflects banks' preference for short-term liquidity management — a sign of tactical, rather than structural, liquidity needs. The overall IBCM rate of 6.34% sits 59 basis points above the CBR of 5.75%, well within the ±200bps policy corridor.
5. Interest Rate Spread Compression Creates Opportunity for Borrowers. The short-term interest rate spread narrowed to 5.59 percentage points in February 2026 — the tightest in the observed period. This compression benefits creditworthy private sector borrowers who can negotiate preferential lending rates. For TICGL's private sector clients, this creates a window to restructure existing debt at lower rates ahead of anticipated monetary policy easing cycles in 2026.
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DISCLAIMER & SOURCE ATTRIBUTION: All data on this page is sourced from the Bank of Tanzania Monthly Economic Review, March 2026 (data period: February 2026). Primary references: Section 2.4 (Financial Markets — Government Securities Market and Interbank Cash Market), Section 2.3 (Interest Rates), Table A4 (Interest Rates Structure). TICGL analytical commentary represents independent research interpretation by Tanzania Investment and Consultant Group Ltd and does not constitute investment advice or a solicitation to buy or sell securities. Past yield trends are not indicative of future returns.
Tanzania External Sector Performance 2026 | Current Account, Exports & Imports | TICGL
Bank of Tanzania · March 2026 · External Sector
Tanzania's External Sector Performance
A comprehensive TICGL analysis of Tanzania's engagement with the global economy — tracing the flows of goods, services, and capital that shape trade competitiveness, tourism strength, and import dependency in 2026.
Exports G&S (yr Feb-26)
$18.4Bn
▲ +12.4% YoY
Tourism Receipts
$4,352M
▲ +9.3% YoY
Gold Exports
$4,968M
▲ +35.8% YoY
Imports G&S (yr Feb-26)
$18.6Bn
▲ +9.1% YoY
Current Account Deficit
$2,108M
▼ Narrowing from $2,156M
Current Account Deficit
$2,108M
▼ Narrowed $48.1M YoY
Total Exports G&S
$18,393M
▲ +12.4% (yr Feb 2026)
Services Receipts
$7,520M
▲ +8.8% YoY
Total Imports G&S
$18,634M
▲ +9.1% (yr Feb 2026)
Service Payments
$3,355M
▲ +17.8% YoY
Current Account Balance
Tanzania's Current Account: A Narrowing Deficit
The current account deficit narrowed to USD 2,108.2 million for the year ending February 2026, compared to USD 2,156.3 million in the corresponding period of 2025 — a modest improvement of USD 48.1 million (2.2%). This improvement was powered by a strong goods export performance, particularly gold, and continued growth in tourism services receipts.
Headline Finding: Tanzania's current account deficit as a share of GDP is estimated at approximately -2.2% for 2025 — an improvement from -2.9% in 2024 and well below the -7.1% recorded during the 2022 commodity price shock. The narrowing deficit reflects improved export competitiveness, rising tourism, and softer global oil prices reducing the import bill.
Current Account Components — Year Ending February 2026 vs 2025 (USD Million)
Goods account, services account, primary income, secondary income balances
ACCOUNT STRUCTURE
Source: Bank of Tanzania — Table 2.7.1 Current Account (Year Ending February)
Current Account Deficit Trend (Annual)
USD Million — 2021 to 2026 (yr Feb)
ANNUAL TREND
Source: Table A5 — Tanzania Balance of Payments
Monthly Current Account Balance (Feb 2025–Feb 2026)
USD Million — monthly outturn
MONTHLY
Source: Bank of Tanzania — Table 2.7.1 Monthly data
Trade Flow Balance — Year Ending February 2026 (USD Million)
Goods & Services — Export vs ImportDeficit: USD 241.0M
Exports $18,393M
Imports $18,634M
0$9,000M$18,000M$37,000M
GOODS ACCOUNT
-$4,407M
Exports $10,873M vs Imports $15,279M
SERVICES ACCOUNT
+$4,166M
Receipts $7,520M vs Payments $3,355M
NET CURRENT ACCOUNT
-$2,108M
▼ Improved from -$2,156M (Feb 2025)
Exports of Goods & Services
Total Exports Rose 12.4% to USD 18,393.2 Million
Tanzania's export engine fired strongly in the year to February 2026. Total goods and services exports grew 12.4% to USD 18,393.2 million, powered by a 35.8% surge in gold exports, robust tourism receipts, and manufactured goods. Goods exports alone grew 15.0%, while services exports expanded 8.8%.
Exports of Goods & Services — Category Breakdown (Year Ending Feb 2022–2026)
USD Million — Gold, Travel/Tourism, Transport, Manufactured Goods, Traditional, Other
EXPORT STRUCTURE
Source: Bank of Tanzania — Table 2.7.2 (Exports of Goods & Services) & Chart 2.7.2
Export Composition — Year Ending Feb 2026
% share of total USD 18,393M in exports
COMPOSITION
Source: Table 2.7.1 & 2.7.2 — Bank of Tanzania
Export Growth Rates by Category (YoY %)
Year ending Feb 2025 → Feb 2026
YoY GROWTH
Source: Bank of Tanzania — Computed from Table 2.7.2 data
🥇 Gold: Tanzania's Dominant Export Engine in 2026
Gold exports surged 35.8% to USD 4,968.4 million in the year to February 2026, from USD 3,658.9 million a year earlier — driven by favourable global gold prices, which averaged USD 5,019.97 per troy ounce in February 2026 (up from USD 2,894.73 in February 2025, a gain of over 73%). Gold now accounts for approximately 45.7% of total goods exports and represents Tanzania's single largest export by value. This concentration creates both opportunity (as gold prices remain elevated) and risk (vulnerability to commodity price reversals). Diversification into manufactured goods — which grew 26.1% to USD 1,705.1 million — signals an emerging shift toward value-added production.
Services Receipts by Category
Services Exports: USD 7,520.3 Million — Up 8.8%
Tanzania's services sector continued its upward trajectory in the year ending February 2026, with total receipts rising 8.8% to USD 7,520.3 million. Three categories dominate: Tourism (Travel), Transport, and Other Services. Tourism remains the crown jewel, while freight/transport income reflects Tanzania's growing role as a transit corridor for landlocked neighbours.
Services Surplus: Tanzania's services account recorded a surplus of USD 4,165.5 million in the year to February 2026 — receipts of USD 7,520.3 million against payments of USD 3,354.9 million. This services surplus is the key offset against the large goods trade deficit (USD 4,406.5 million), making the services sector Tanzania's economic stabilizer in the external accounts.
Services Receipts by Category — Year Ending February 2024, 2025 & 2026 (USD Million)
Travel (Tourism), Transport (Freight), and Other Services
SERVICES RECEIPTS
Source: Bank of Tanzania — Chart 2.7.3 & Table 2.7.1 Services Account
Services Receipts Composition — Feb 2026
% share of USD 7,520.3M total services receipts
COMPOSITION
Source: Table 2.7.1 — Bank of Tanzania Computations
Monthly Services Receipts (Feb 2025–Feb 2026)
Monthly actual — USD Million
MONTHLY TREND
Source: Bank of Tanzania — Table 2.7.1 monthly data
Services Receipts: 2025 vs 2026 Comparison
Year ending February — bars show 2025 (light) vs 2026 (solid)
🚢 Transport (Freight)2025: USD 2,385.4M → 2026: USD 2,726.0M+14.3%
⚙️ Other Services2025: USD 547.2M → 2026: USD 442.0M-19.2%
TOTAL Services Receipts2025: USD 6,913.9M → 2026: USD 7,520.3M +8.8%
Tourism Analysis
Tourism: Tanzania's Largest Services Export at USD 4,352.3 Million
Tourism (Travel) remains Tanzania's largest single services export category, accounting for 57.9% of total services receipts. The year to February 2026 saw tourism receipts grow 9.3% to USD 4,352.3 million, supported by a 4.2% increase in international tourist arrivals to 2,255,006 visitors. Tanzania's world-class wildlife, Zanzibar beaches, and Kilimanjaro continue to attract high-value visitors.
Tourism Receipts Trend — Year Ending February
USD Million (2022 to 2026)
TOURISM TREND
Source: Banks & Bank of Tanzania — Chart 2.7.3
Tourist Arrivals vs Tourism Revenue (Indexed 2022=100)
Arrivals and receipts indexed — shows revenue/visitor efficiency
EFFICIENCY INDEX
Source: Bank of Tanzania — Tourist arrival and receipts data 2022–2026
🌴 TICGL Tourism Insight: Revenue per Visitor is Rising
With tourist arrivals growing 4.2% but receipts rising 9.3%, Tanzania's revenue per visitor is increasing — from approximately USD 1,758 per arrival in 2025 to an estimated USD 1,930 in 2026. This signals both higher-value tourist segments (luxury safari, premium beach) and longer average stays. TICGL identifies the tourism-adjacent investment universe — hospitality, logistics, MICE (meetings, incentives, conferences, exhibitions), and cultural tourism — as among Tanzania's highest-potential sectors for foreign direct investment in 2026–2028.
Imports of Goods & Services
Total Imports Rose 9.1% to USD 18,634.2 Million
Imports of goods and services rose to USD 18,634.2 million in the year ending February 2026, reflecting higher demand for productive inputs — industrial supplies, transport equipment, machinery, and freight services. A key positive: oil imports declined 16.6% to USD 2,110.2 million, driven by softer global petroleum prices, partially offsetting the broad import increase.
Oil Import Relief: Oil imports fell 16.6% from USD 2,529.7 million to USD 2,110.2 million — a saving of USD 419.5 million in the import bill. This directly reflects softer global crude oil prices and contributed significantly to the narrowing current account deficit. However, industrial supplies imports rose sharply to USD 5,537.6 million (+16.5%), signalling continued productive investment by Tanzania's private sector.
Imports of Goods & Services — Category Breakdown (Year Ending Feb 2022–2026)
USD Million — Industrial Supplies, Oil, Transport Equipment, Machinery, Freight, Other
IMPORT STRUCTURE
Source: Bank of Tanzania — Table 2.7.4 & Chart 2.7.4 (Imports of Goods & Services)
Import Composition — Year Ending Feb 2026
% share of total USD 18,634.2M in imports
COMPOSITION
Source: Bank of Tanzania — Table 2.7.4
Top Import Categories: 2025 vs 2026 (USD Million)
Year ending February — key import items compared
YoY COMPARISON
Source: Bank of Tanzania — Table 2.7.4
Services Payments
Services Payments: USD 3,354.9 Million — Up 17.8%
Service payments grew 17.8% to USD 3,354.9 million in the year ending February 2026, driven primarily by higher freight costs aligned with Tanzania's growing import bill. Transport (freight) payments dominate at USD 1,541.1 million, followed by Other Services at USD 1,074.6 million, and Travel at USD 739.2 million.
Freight Cost Burden: Transport/freight payments rose to USD 1,541.1 million from USD 1,406.0 million (+9.6%), tracking the 9.1% rise in total imports. As Tanzania's import volume grows — particularly in capital and industrial goods — freight costs will remain a structural component of the services payment bill. Developing Tanzania's own maritime and logistics capabilities is a key lever for reducing this outflow.
Services Payments by Category — Year Ending February 2024, 2025 & 2026 (USD Million)
Freight/Transport, Travel, and Other Services outflows
SERVICES PAYMENTS
Source: Bank of Tanzania — Chart 2.7.5 & Table 2.7.1 Services Payments
Services Receipts vs Payments — Net Balance
Year ending February 2022–2026 (USD Million)
NET SERVICES
Source: Bank of Tanzania — Table 2.7.1 Services Account
Services Payments Composition — Feb 2026
% share of USD 3,354.9M total payments
COMPOSITION
Source: Bank of Tanzania — Table 2.7.5 data
Services Payments: 2025 vs 2026 Comparison
Year ending February — bars show 2025 (light) vs 2026 (solid)
YoY COMPARISON
🚢 Transport (Freight)2025: USD 1,406.0M → 2026: USD 1,541.1M+9.6%
⚙️ Other Services2025: USD 892.8M → 2026: USD 1,074.6M+20.4%
TOTAL Services Payments2025: USD 2,847.6M → 2026: USD 3,354.9M +17.8%
⚠️ Watch: Services Payments Growing Faster Than Receipts
Services payments grew at 17.8% in the year to February 2026, significantly faster than services receipts at 8.8%. While Tanzania still runs a comfortable services surplus (receipts exceed payments by USD 4,165.5M), the rate of divergence warrants monitoring. The primary driver is travel payments surging 34.7% — reflecting higher outbound travel by residents and business travelers — alongside rising freight costs and growing use of international financial, insurance, and professional services. For the services surplus to remain robust, tourism receipts must continue outpacing these growing payment outflows.
Complete Data Reference
Full External Sector Data Tables
All figures sourced directly from the Bank of Tanzania March 2026 Monthly Economic Review. Values in USD millions unless stated.
Table 1: Current Account Summary (USD Million)
Item
Feb-25
Jan-26
Feb-26p
Yr Feb 2024
Yr Feb 2025
Yr Feb 2026p
% Change (Yr)
Goods Account (Net)
-228.5
-292.4
-287.1
-5,996.1
-4,782.3
-4,406.5
▼ Improving -7.9%
Goods Exports
710.0
1,083.6
965.2
7,794.3
9,451.6
10,872.9
+15.0%
Goods Imports
938.5
1,376.0
1,252.3
13,790.4
14,233.9
15,279.3
+7.3%
Services Account (Net)
370.4
305.3
323.6
4,010.2
4,066.3
4,165.5
+2.4%
Services Receipts
598.8
606.8
608.6
6,340.1
6,913.9
7,520.3
+8.8%
Services Payments
228.4
301.5
285.0
2,329.9
2,847.6
3,354.9
+17.8%
G&S Balance
141.9
12.9
36.5
-1,985.9
-716.0
-241.0
▼ Improving -66.3%
Total Exports G&S
1,308.8
1,690.4
1,573.8
14,134.4
16,365.5
18,393.2
+12.4%
Total Imports G&S
1,167.0
1,677.5
1,537.3
16,120.3
17,081.5
18,634.2
+9.1%
Primary Income Account
-162.9
-199.7
-218.7
-1,531.6
-1,971.8
-2,133.0
+8.2%
Secondary Income Account
16.9
27.7
27.7
699.6
531.5
265.8
-50.0%
CURRENT ACCOUNT BALANCE
-4.2
-159.1
-154.4
-2,818.0
-2,156.3
-2,108.2
▼ Improving -2.2%
Table 2: Services Receipts by Category (USD Million)
Category
Feb-25
Jan-26
Feb-26p
Yr Feb 2024
Yr Feb 2025
Yr Feb 2026p
% Change
Share 2026
Travel (Tourism)
—
—
—
3,495.3
3,981.3
4,352.3
+9.3%
57.9%
Transport (Freight)
—
—
—
2,297.1
2,385.4
2,726.0
+14.3%
36.2%
Other Services
—
—
—
547.8
547.2
442.0
-19.2%
5.9%
TOTAL Services Receipts
598.8
606.8
608.6
6,340.1
6,913.9
7,520.3
+8.8%
100%
Table 3: Services Payments by Category (USD Million)
Category
Feb-25
Jan-26
Feb-26p
Yr Feb 2024
Yr Feb 2025
Yr Feb 2026p
% Change
Share 2026
Transport (Freight)
—
—
—
1,283.8
1,406.0
1,541.1
+9.6%
45.9%
Other Services
—
—
—
640.9
892.8
1,074.6
+20.4%
32.0%
Travel
—
—
—
405.2
548.9
739.2
+34.7%
22.0%
TOTAL Services Payments
228.4
301.5
285.0
2,329.9
2,847.6
3,354.9
+17.8%
100%
Table 4: Top Goods Exports — Year Ending February 2025 vs 2026 (USD Million)
Export Item
Yr Feb 2025
Yr Feb 2026p
Change (USD M)
% Change
Gold
3,658.9
4,968.4
+1,309.5
+35.8%
Travel (Tourism)
3,981.3
4,352.3
+371.0
+9.3%
Transportation
2,385.4
2,726.0
+340.6
+14.3%
Manufactured Goods
1,351.8
1,705.1
+353.3
+26.1%
Tobacco
525.4
625.7
+100.3
+19.1%
Cashewnuts
522.3
493.5
-28.8
-5.5%
Horticultural Products
499.3
465.1
-34.2
-6.9%
Coffee
323.5
403.8
+80.3
+24.8%
Oil Seeds
297.7
272.0
-25.7
-8.6%
Cereals
328.1
198.9
-129.2
-39.4%
TICGL Strategic Analysis
External Sector: What It Means for Tanzania's Investment Climate
TICGL's strategic interpretation of Tanzania's external sector data for investors, trade partners, and policy-focused stakeholders.
Tourism receipts of USD 4,352.3 million make Tanzania one of Africa's top tourism earners. With 2,255,006 arrivals growing 4.2% and revenue up 9.3%, revenue per visitor is rising — a healthy signal for premium positioning. Investments in hospitality, eco-tourism infrastructure, and air connectivity will yield strong returns in a sector that is structurally undercapacity.
🥇
Gold Price Windfall: A One-Time Boost or New Normal?
Gold exports surged USD 1.3 billion (+35.8%) on the back of global gold prices rising from ~$2,895 to ~$5,020 per troy oz. While this is partly a price windfall, Tanzania's gold production capacity is also expanding through artisanal sector reforms. The risk: heavy gold concentration (45.7% of goods exports) creates vulnerability if prices correct. Diversification into manufactured goods (+26.1%) is the right strategic direction.
📦
Capital Goods Imports: Productive Investment Signal
Capital goods imports rose to USD 3,649.9 million (+24.1%), led by machinery, industrial transport equipment, and electrical equipment. This composition of imports — dominated by productive assets rather than consumption — is a positive signal for future output capacity. It confirms that Tanzania's private sector is investing in expansion, backed by strong credit growth (24.4%) in the banking sector.
⛵
Freight Payments: The Hidden Import Cost
Freight payments of USD 1,541.1 million represent 45.9% of all services payments and 8.3% of total goods imports — a significant cost leakage. As import volumes grow, freight costs will continue rising unless Tanzania develops stronger domestic maritime, rail, and logistics capacity. Port of Dar es Salaam expansion and the Central Corridor railway project are directly addressing this vulnerability.
📉
Narrowing CAD: Structural or Cyclical?
The current account deficit narrowed from USD 2,156.3M to USD 2,108.2M — modest improvement. The improvement is partly structural (gold export expansion, tourism growth) and partly cyclical (oil price relief saving USD 419M). The secondary income account halved to USD 265.8M due to declining remittances — a vulnerability that needs monitoring as diaspora transfers are a key balance-of-payments stabilizer.
Tanzania's services surplus of USD 4,165.5 million nearly offsets the entire goods deficit of USD 4,406.5 million. This is remarkable: it means Tanzania's tourism and transport services industries are functioning as a near-complete hedge against the country's trade gap in physical goods. Protecting and expanding this services surplus — primarily through tourism — is the single most important external balance policy priority.
🔭 TICGL External Sector Outlook: Key Variables for 2026
Three forces will shape Tanzania's external balance through the rest of 2026: (1) Gold prices — with prices near USD 5,020/oz, any correction would immediately impact export earnings; TICGL monitors this as the single highest-impact variable. (2) Tourism recovery momentum — with tourist arrivals growing 4.2% and revenue per visitor rising, Tanzania is well-positioned for a strong H2 2026 safari and beach season; Air Tanzania's route expansion is a direct positive catalyst. (3) Global freight rates — the Strait of Hormuz tensions cited in the BoT report are raising freight costs; any escalation increases Tanzania's services payment burden while also inflating the import bill. Net result: the current account should remain in the USD 2.0–2.2 billion deficit range for full-year 2026, broadly stable.
🌍 Track Tanzania's Trade & External Balance in Real Time
TICGL's Business Intelligence Dashboard provides live and historical data on Tanzania's exports, imports, tourism receipts, current account, and balance of payments — giving investors the edge they need to navigate Tanzania's evolving external economy.
TICGL Economic Intelligence · BoT MER March 2026 · Section 3.0
Zanzibar Economic Performance February 2026
A comprehensive review of the Zanzibar economy covering inflation trends, government fiscal operations, and external sector performance — including the island's surging current account surplus driven by record clove harvests and robust tourism receipts.
Zanzibar's headline inflation remained stable at 4.8 percent year-on-year in February 2026 — unchanged from the same period in 2025. On a month-on-month basis the rate eased sharply to 0.5 percent from 2.3 percent in January 2026. The overall outturn masks a significant divergence: food prices are running hot at 9.3 percent, while non-food inflation has collapsed to just 1.4 percent, driven by moderation in housing, water, electricity, gas and fuel costs.
📊
Headline Inflation (Annual)
4.8%
Feb-26 · Stable vs 4.8% Feb-25 · Eased from 4.3% Jan-26
🌾
Food Inflation (Annual)
9.3%
Feb-26 · Up from 5.8% Feb-25 · Driven by seasonal pressures
🏠
Non-Food Inflation (Annual)
1.4%
Feb-26 · Down sharply from 4.1% Feb-25 · Housing & utilities eased
📅
Month-on-Month (Feb-26)
0.5%
Eased from 2.3% in Jan-26 · Food MoM flat at 0.0%
Annual Inflation Rates — Feb-25 to Feb-26
Headline, Food & Non-Food Inflation (%) · Base: July 2022=100
Select CPI Categories — Annual Change (Feb-26)
Year-on-Year Percentage Change by Main Group
Table 3.1.1 — Inflation Developments, Zanzibar
Base: July 2022=100 · Source: Office of the Chief Government Statistician
Main Group
Weight (%)
MoM Feb-25
MoM Jan-26
MoM Feb-26
Annual Feb-25
Annual Jan-26
Annual Feb-26
🌾 Food & Non-Alcoholic Beverages
41.9
−0.1
4.7
0.0
6.4
9.1
9.2
🍺 Alcoholic Beverages, Tobacco & Narcotics
0.2
3.4
0.0
0.0
1.0
6.6
3.1
👗 Clothing & Footwear
6.3
0.1
0.5
0.3
2.8
3.0
3.1
🏠 Housing, Water, Electricity, Gas & Other Fuels
25.8
−0.2
−0.5
2.0
5.2
−2.3
−0.2
🛋️ Furnishings, Household Equipment & Maintenance
4.8
0.4
1.8
0.2
3.6
3.0
2.8
🏥 Health
1.3
0.0
0.0
0.0
−2.0
1.4
1.4
🚗 Transport
9.1
0.2
0.7
0.4
1.4
2.0
2.2
📱 Information & Communication
4.2
0.0
−0.3
0.0
3.3
−0.1
−0.1
🎭 Recreation, Sport & Culture
1.1
0.0
−0.1
0.0
3.4
4.1
4.1
📚 Education
1.6
0.0
1.1
0.0
2.6
1.9
1.9
🍽️ Restaurants & Accommodation Services
1.4
0.0
5.4
0.0
0.6
7.1
7.1
💳 Insurance & Financial Services
0.5
0.0
0.0
0.0
0.0
0.0
0.0
💄 Personal Care & Miscellaneous Goods
1.7
0.3
0.1
0.6
3.5
1.8
2.2
📋 All Items — Headline Inflation
100.0
0.0
2.3
0.5
4.8
4.3
4.8
Selected Groups
🌾 Food (Total)
40.5
−0.1
4.8
0.0
5.8
9.2
9.3
🏙️ Non-Food
59.5
0.0
0.3
0.9
4.1
0.4
1.4
Source: Office of the Chief Government Statistician · Base: July 2022 = 100
3.2 Government Budgetary Operations
Zanzibar's government revenue performance in February 2026 was broadly strong, with domestic revenue exceeding target by 4.4 percent. Tax revenue drove collections across all categories, reflecting improved administration and compliance. However, total expenditure of TZS 407.7 billion — heavily skewed toward development spending at 61.5 percent — resulted in a fiscal deficit of TZS 222.5 billion, financed entirely through borrowing.
💰 Revenue Collections — February 2026
TZS Billions · Actual vs 2026 Estimates · Source: Ministry of Finance and Planning, Zanzibar
🛃 Tax on ImportsTZS 34.6B / Est. 41.2B
84.0% of estimate · Actual TZS 34.6B vs Est. 41.2B
📦 VAT & Excise (Local)TZS 29.4B / Est. 39.6B
74.2% of estimate
💼 Income TaxTZS 41.2B / Est. 16.0B
257.5% of estimate · Significant overperformance
🏷️ Other TaxesTZS 26.9B / Est. 16.0B
168.1% of estimate
📋 Non-Tax RevenueTZS 14.4B / Est. 16.0B
90.0% of estimate
🎁 GrantsTZS 10.9B / Est. 2.8B
389.3% of estimate
💸 Expenditure — February 2026
TZS Billions · Actual vs 2026 Estimates · Total Expenditure: TZS 407.7B
👷 Wages & SalariesTZS 67.2B / Est. 67.2B
100.0% of estimate · On target
🔄 Other Recurrent ExpenditureTZS 89.7B / Est. 95.5B
93.9% of estimate · Includes domestic debt interest
🏗️ Development ExpenditureTZS 250.8B / Est. 188.0B
133.4% of estimate · 61.5% of total expenditure
Total Revenue & Grants
185.2B
TZS · 95.6% of target
Fiscal Deficit
222.5B
TZS · Financed via borrowing
⚠️ Development expenditure funded 88.3% from domestic sources
Government Revenue by Category (Feb-26 vs 2025 Actuals vs 2026 Estimates)
TZS Billions
Government Expenditure by Category (Feb-26 vs 2025 Actuals vs 2026 Estimates)
TZS Billions
Source: Ministry of Finance and Planning, Zanzibar · Note: Actual figures for 2026 are provisional. Other taxes include hotel and restaurant levies, tour operator levy, revenue stamps, airport/seaport service charges, road development fund and petroleum levy.
3.3 External Sector Performance
Zanzibar's external sector delivered an outstanding performance in the year ending February 2026, with the current account surplus surging 29.2 percent to USD 912.1 million. The improvement was driven by a combination of strong tourism receipts, record clove harvests, manufactured goods exports, and growth in seaweed production — the island's four pillars of export earnings.
⚖️
Current Account Surplus
$912.1M
Year ending Feb-26 · ▲ +29.2% from $705.9M (2025)
📤
Total Exports
$1,625M
Year ending Feb-26 · ▲ +25.5% YoY · Services 94.9%
📥
Total Imports
$743.9M
Year ending Feb-26 · ▲ +22.8% YoY · Capital goods surging
✈️
Services Receipts
$1,542.7M
Year ending Feb-26 · ▲ +22.4% YoY · Tourism dominant
Current Account Balance — 2025 vs 2026
USD Millions · Year Ending February
Monthly Current Account — Feb-25, Jan-26, Feb-26
USD Millions · Monthly Figures
Table 3.3.1 — Current Account, Zanzibar
Millions of USD · Source: Tanzania Revenue Authority, Banks & Bank of Tanzania
Description
Feb-25
Jan-26
Feb-26p
2025 (Yr-Feb)
2026p (Yr-Feb)
% Change
Goods Account
Exports (fob)
1.3
7.2
7.1
34.2
82.2
▲ +140.4%
Imports (fob)
40.4
84.0
64.6
507.1
630.7
▲ +24.4%
Goods Account (Net)
−39.1
−76.9
−57.5
−472.9
−548.5
▼ −16.0%
Services Account
Receipts
137.4
166.4
144.2
1,260.1
1,542.7
▲ +22.4%
Payments
7.9
13.6
10.2
98.5
113.2
▲ +14.9%
Services Account (Net)
129.5
152.8
134.0
1,161.6
1,429.5
▲ +23.1%
Goods & Services (Net)
90.3
75.9
76.5
688.7
881.1
▲ +27.9%
Exports of Goods & Services
138.7
173.6
151.3
1,294.4
1,625.0
▲ +25.5%
Imports of Goods & Services
48.4
97.6
74.8
605.7
743.9
▲ +22.8%
Primary Income (Net)
0.7
0.4
1.4
15.3
27.7
▲ +81.3%
Secondary Income (Net)
0.1
0.2
0.3
1.9
3.4
▲ +75.3%
CURRENT ACCOUNT BALANCE
91.1
76.6
78.1
705.9
912.1
▲ +29.2%
Source: Tanzania Revenue Authority, Banks, and Bank of Tanzania computations · p = provisional · fob = free on board
Exports of Goods
Export of goods more than doubled year-on-year to USD 82.2 million, driven almost entirely by a bumper clove harvest — Zanzibar's signature export commodity. Clove exports surged to USD 33.9 million in the year ending February 2026, with volumes rising to 5,500 tonnes at an average unit price of USD 6,157 per tonne. Manufactured goods also registered remarkable growth of 71.9 percent to USD 22.5 million.
🌿
Clove Exports: A Bumper Harvest Story
Zanzibar's clove production experienced exceptional growth in the year ending February 2026, with export value surging from USD 4.8 million to USD 33.9 million — a more-than-sixfold increase. This follows years of subdued output and reflects both improved agronomic conditions and favourable global spice pricing. The unit price rose from USD 3,979 per tonne (2025) to USD 6,157 per tonne (2026).
5,500T
Volume (2026)
$6,157
USD/Tonne
$33.9M
Export Value
Exports of Goods — Year Ending Feb-25 vs Feb-26
USD Thousands · Traditional & Non-Traditional
Clove Export: Value, Volume & Unit Price Trend
Monthly · USD & Tonnes · Feb-25 to Feb-26
Table 3.3.2 — Exports of Goods, Zanzibar
Millions of USD · Source: Tanzania Revenue Authority & Bank of Tanzania
Commodity / Category
Units
Feb-25
Jan-26
Feb-26p
2025 (Yr-Feb)
2026p (Yr-Feb)
% Change
🌿 Traditional Exports — Clove
Value
USD '000
185.1
2,588.1
4,806.2
4,825.5
33,867.6
▲ +601.6%
Volume
'000 Tonnes
0.0
0.4
0.7
1.2
5.5
▲ +358%
Unit Price
USD/Tonne
5,858.0
6,901.5
6,859.9
3,978.8
6,156.7
▲ +54.7%
🌊 Non-Traditional Exports — Seaweeds
Value
USD '000
399.8
11.5
52.6
3,939.2
5,259.5
▲ +33.5%
Volume
'000 Tonnes
0.6
0.0
0.1
6.9
9.3
▲ +35.2%
Unit Price
USD/Tonne
643.1
408.2
560.3
570.3
563.2
▼ −1.3%
🏭 Manufactured Goods
USD '000
511.3
867.4
841.6
13,082.5
22,489.8
▲ +71.9%
🐟 Fish & Fish Products
USD '000
4.9
104.3
65.3
1,858.3
2,246.5
▲ +20.9%
🎁 Other Exports (Souvenirs, Spices)
USD '000
203.5
3,607.1
1,325.9
10,536.6
18,379.2
▲ +74.4%
TOTAL GOODS EXPORTS
USD ('000)
1,304.6
7,178.3
7,091.5
34,242.1
82,242.5
▲ +140.2%
Source: Tanzania Revenue Authority and Bank of Tanzania · p = provisional · "---" denotes change exceeding 100%
Imports of Goods
Total imports of goods and services rose 22.8 percent to USD 743.9 million in the year ending February 2026. The increase was concentrated in capital goods — particularly industrial transport equipment and electrical machinery — signalling continued investment in Zanzibar's infrastructure and productive capacity. Fuel imports declined 28.5 percent, reflecting softer global petroleum prices.
Imports by Category — 2025 vs 2026
USD Millions · Year Ending February
Import Category Share — February 2026
% of Total Imports · Capital vs Intermediate vs Consumer
Table 3.3.3 — Imports of Goods, Zanzibar (Selected Lines)
Millions of USD · Source: Tanzania Revenue Authority & Bank of Tanzania
Category / Item
Feb-25
Jan-26
Feb-26p
2025 (Yr-Feb)
2026p (Yr-Feb)
% Change
🏗️ Capital Goods
Machinery & Mechanical Appliances
0.7
7.9
5.3
21.8
43.2
▲ +98.2%
Industrial Transport Equipment
0.8
21.7
8.0
20.6
43.0
▲ +108.7%
Electrical Machinery & Equipment
0.6
7.9
5.1
12.8
34.2
▲ +167.2%
Capital Goods Total
2.7
39.0
19.5
60.4
133.1
▲ +120.4%
⚙️ Intermediate Goods
Industrial Supplies
6.7
21.6
16.7
110.0
175.1
▲ +59.2%
Fuel & Lubricants
16.8
11.5
10.7
159.7
114.2
▼ −28.5%
Parts & Accessories
0.8
1.7
3.1
15.6
28.5
▲ +82.7%
Intermediate Goods Total
32.8
37.0
35.7
379.1
403.8
▲ +6.5%
🛍️ Consumer Goods
Food & Beverages (Household)
1.2
1.8
1.8
17.3
17.9
▲ +3.5%
Other Consumer Goods
3.6
4.2
6.7
48.2
70.6
▲ +46.5%
Consumer Goods Total
5.0
8.1
9.4
67.6
93.8
▲ +38.8%
TOTAL IMPORTS (f.o.b)
40.4
84.0
64.6
507.1
630.7
▲ +24.4%
Source: Tanzania Revenue Authority and Bank of Tanzania · p = provisional · f.o.b = free on board
TICGL Analytical Commentary
TICGL's independent research interpretation of Zanzibar's February 2026 economic data — covering inflation risks, fiscal dynamics, and the structural drivers of the island's external sector performance.
🔍 Five Key Observations from TICGL Research
1. Food Inflation at 9.3% Demands Targeted Policy Response. While headline inflation held steady at 4.8% year-on-year, the food component surged from 5.8% (Feb-25) to 9.3% (Feb-26). With food carrying a 41.9% weight in Zanzibar's CPI basket — the largest single category — this divergence signals acute affordability stress for lower-income households. The fall in non-food inflation to 1.4% (from 4.1%) masks the real burden being borne by food-dependent households. TICGL recommends targeted social protection measures and food supply chain interventions to address this imbalance.
2. Clove Boom Provides a Structural Window — But Diversification Remains Essential. The more-than-sixfold surge in clove export earnings (from USD 4.8M to USD 33.9M year-on-year) is transformative for Zanzibar's goods trade balance. However, agricultural commodity dependence introduces cyclical risk: clove yields are notoriously volatile due to biennial bearing patterns and weather sensitivity. TICGL advises investors and policymakers to view this as a strategic window to build agro-processing capacity, develop cold-chain infrastructure, and attract value-added spice processing investment — converting raw commodity revenues into durable industrial gains.
3. Services Sector — Tourism is the Backbone at 94.9% of Exports. Services receipts grew 22.4% to USD 1,542.7 million, with tourism (travel) overwhelmingly dominant. This dependency on tourism as the economic engine means Zanzibar remains acutely exposed to global travel disruptions, geopolitical shocks, and climate-related events. The island's resilience strategy must include diversification into MICE tourism, health tourism, and digital nomad infrastructure — all high-margin, low-seasonality segments where Zanzibar has competitive advantages.
4. Capital Goods Import Surge Signals Investment Acceleration. Capital goods imports more than doubled year-on-year (USD 60.4M → USD 133.1M), with industrial transport equipment and electrical machinery recording triple-digit growth. This surge likely reflects construction activity tied to hotel expansion, port infrastructure, and renewable energy projects. The decline in fuel imports (−28.5%) alongside rising capital goods is a positive structural signal — suggesting the economy is shifting from consumption-driven imports toward investment-driven imports, which generate productive capacity and future export capability.
5. Fiscal Deficit Management Needs Structural Attention. The TZS 222.5 billion fiscal deficit, financed entirely through borrowing, alongside development expenditure running at 133% of estimates, raises questions about expenditure control and fiscal sustainability. Positively, 88.3% of development financing was domestically sourced, reducing foreign exchange exposure. However, sustained domestic borrowing for capital spending could crowd out private sector credit if not balanced by revenue mobilisation. TICGL recommends an accelerated push to expand the non-tax revenue base — particularly through tourism levies, marine park fees, and PPP-structured infrastructure — to reduce reliance on debt financing for development.
Explore More TICGL Research
Deepen your knowledge of Tanzania's economy with related TICGL intelligence resources.
Disclaimer & Source Attribution: All data on this page is sourced exclusively from the Bank of Tanzania Monthly Economic Review, March 2026 (data period: February 2026), Section 3.0 — Economic Performance in Zanzibar. Primary tables: 3.1.1 (Inflation), Chart 3.1.1, Chart 3.2.1, Chart 3.2.2, Table 3.3.1 (Current Account), Table 3.3.2 (Exports), and Table 3.3.3 (Imports). Supplementary data sourced from the Office of the Chief Government Statistician (OCGS) Zanzibar and the Ministry of Finance and Planning, Zanzibar. TICGL analytical commentary represents independent research interpretation and does not constitute investment advice. Figures marked "p" are provisional.
Bank of Tanzania · March 2026 · Interest Rate Analysis
Tanzania's Lending & Deposit Interest Rates
A forensic breakdown of Tanzania's commercial bank rate structure — what borrowers pay, what savers earn, and what the spread between them tells investors about the cost of capital in Tanzania's evolving financial landscape.
Overall Lending Rate
15.11%
Feb 2026 | ▼ -0.03pp MoM
12-Month Deposit Rate
9.82%
Feb 2026 | ▲ +0.12pp MoM
Interest Rate Spread
5.59pp
Feb 2026 | ▼ Narrowing trend
Negotiated Lending Rate
12.19%
Feb 2026 | ▼ -0.06pp MoM
Central Bank Rate (CBR)
5.75%
Q1 2026 | Held steady
Overall Lending Rate
15.11%
▼ -0.03pp from Jan 2026
12-Month Deposit Rate
9.82%
▲ +0.12pp from Jan 2026
Short-Term Spread
5.59pp
▼ Narrowed from 5.79pp
Negotiated Lending Rate
12.19%
▼ -0.06pp from Jan 2026
Savings Deposit Rate
2.98%
▲ +0.04pp from Jan 2026
Rate Snapshot — February 2026
Tanzania's Complete Interest Rate Dashboard
In February 2026, commercial banks' interest rates remained broadly stable. The overall lending rate held near 15.11%, while deposit rates inched upward — compressing the interest spread to its narrowest level in recent months. Below is the full rate landscape as reported by the Bank of Tanzania.
💳
Overall Lending
15.11%
Feb 2026
Includes all loan maturities weighted by volume
⏱️
Short-Term Lending (≤1yr)
15.41%
▼ -0.08pp MoM
Up to 1-year loan facilities
🤝
Negotiated Lending
12.19%
▼ -0.06pp MoM
Prime/large corporate borrowers
🏦
Overall Time Deposit
8.32%
▼ -0.01pp MoM
All tenors weighted average
📅
12-Month Deposit
9.82%
▲ +0.12pp MoM
Annual fixed-term deposit rate
💰
Negotiated Deposit
11.48%
▼ -0.26pp MoM
Large depositor negotiated terms
🪙
Savings Deposit
2.98%
▲ +0.04pp MoM
Standard savings accounts
📐
Short-Term Spread
5.59pp
▼ Narrowing
1-yr lending minus deposit rate
Key Context: Tanzania's Central Bank Rate (CBR) was held at 5.75% for Q1 2026. The spread between the CBR and the overall lending rate of 15.11% — a gap of approximately 9.36 percentage points — represents banks' intermediation cost and margin. The gradual compression of this gap (the short-term spread narrowed from 6.29pp in Feb 2025 to 5.59pp in Feb 2026) reflects improved monetary policy transmission and strengthening competition in Tanzania's banking sector.
Lending Rate Analysis
Lending Rates: Cost of Borrowing in Tanzania
Tanzania's overall lending rate has trended gradually downward over the past year — from 15.14% in February 2025 to 15.11% in February 2026. While the decline is modest, the trend in negotiated rates (from 13.42% to 12.19%) signals meaningful credit cost improvement for qualifying borrowers.
Lending Rate Trends — February 2025 to February 2026
Source: Bank of Tanzania — Table A4: Interest Rates Structure (Feb 2025–Feb 2026)
Lending Rate by Tenor — February 2026
Short-term to over 5-year loan rates compared
BY MATURITY
Source: Table A4 — Bank of Tanzania, February 2026
Overall Lending Rate: Feb 2025 vs Feb 2026
Year-on-year change in each lending category
YoY CHANGE
Source: Table A4 — Bank of Tanzania Monthly Data
Lending Rate Spectrum — February 2026
All active lending rate categories ranked lowest to highest
RATE RANKING
Negotiated (Prime)
12.19%
12.19%
Long-Term (3–5yr)
13.95%
13.95%
Term Loans (>5yr)
14.20%
14.20%
Overall Lending
15.11%
15.11%
Short-Term (≤1yr)
15.41%
15.41%
Medium-Term (2–3yr)
15.27%
15.27%
Medium-Term (1–2yr)
16.70%
16.70%
Lending Rate Insight: The 1–2 year medium-term lending rate at 16.70% is the highest across all maturities — reflecting the higher risk pricing for bridge and working capital loans. In contrast, long-term loans (3–5 years) at 13.95% are cheaper, incentivising long-term investment financing. Investors should note that negotiated rates at 12.19% are available to prime borrowers — a full 296 basis points below the overall lending rate.
Deposit Rate Analysis
Deposit Rates: What Savers Earn in Tanzania
Tanzania's deposit rate landscape shows a wide range depending on tenure and negotiation power. From as low as 2.98% on savings accounts to 11.48% on negotiated deposits, the spread in deposit rates itself reflects significant opportunity for sophisticated depositors and institutional investors.
Deposit Rate Trends — February 2025 to February 2026
All deposit categories ranked — lowest to highest earning
DEPOSIT RANKING
Savings Account
2.98%
2.98%
1-Month Time Deposit
9.10%
9.10%
2-Month Time Deposit
9.16%
9.16%
3-Month Time Deposit
9.03%
9.03%
6-Month Time Deposit
10.26%
10.26%
12-Month Time Deposit
9.82%
9.82%
Negotiated Deposit
11.48%
11.48%
💡 Saver's Perspective: Real Returns Are Positive in Tanzania
With headline inflation at 3.2% in February 2026, Tanzania's deposit market offers genuinely positive real returns across most tenors. A 12-month time deposit at 9.82% delivers a real return of approximately +6.62% after inflation — among the most attractive in East Africa. Negotiated deposit rates at 11.48% yield a real return of +8.28%. This stands in stark contrast to many global markets where real deposit returns remain near zero or negative. For institutional investors and corporate treasury managers, Tanzania's deposit market presents a compelling case for TZS-denominated cash management.
Interest Rate Spread
The Lending–Deposit Spread: Narrowing But Still Wide
The interest rate spread — the difference between what banks charge borrowers and what they pay depositors — is a key measure of banking sector efficiency and financial inclusion. Tanzania's short-term spread narrowed from 6.29pp in February 2025 to 5.59pp in February 2026, a positive sign, but still elevated compared to mature markets.
Interest Rate Spread Trend — Feb 2025 to Feb 2026
Short-term lending vs 1-year deposit rate, and the spread between them (%)
SPREAD ANALYSIS
Source: Bank of Tanzania — Table A4 & Table 2.3.1 — Short-term interest rate spread
How the 15.11% Lending Rate Decomposes — February 2026
Interest Rates Across All Maturities — Feb 2025 to Feb 2026
The full rate structure across short, medium, and long-term tenors for both lending and deposits — essential data for loan pricing, investment modeling, and financial planning in Tanzania.
Complete Rate Structure — All Tenors (Feb 2026)
Lending rates (red shades) vs Deposit rates (teal shades) by maturity bucket
FULL STRUCTURE
Source: Bank of Tanzania — Table A4, February 2026 data
Negotiated Rate Deep Dive
Negotiated Rates: The Prime Borrower Advantage
Negotiated rates represent the terms available to the most creditworthy borrowers and largest depositors. Tracking the trajectory of negotiated rates reveals the directional bias of bank pricing policy — and the premium paid by smaller, less-connected borrowers.
Negotiated Lending Rate Trend
Monthly — Feb 2025 to Feb 2026 (%)
PRIME LENDING
Source: Table A4 — Bank of Tanzania | Jan 2025: 12.80% → Feb 2026: 12.19%
Negotiated Deposit Rate Trend
Monthly — Feb 2025 to Feb 2026 (%)
PRIME DEPOSIT
Source: Table A4 — Bank of Tanzania | Feb 2025: 11.40% → Feb 2026: 11.48%
📉 The Premium Borrower Gap: 296 Basis Points
The difference between the overall lending rate (15.11%) and the negotiated rate for prime borrowers (12.19%) is 296 basis points — representing the "creditworthiness premium" that smaller or riskier borrowers pay in Tanzania. This gap has been narrowing: in January 2025 it stood at 293bp (15.73% vs 12.80%), suggesting that credit risk differentiation is becoming slightly tighter. For TICGL-advised clients, securing negotiated lending terms can save significant financing costs on large-scale investments.
Complete Data Reference
Full Interest Rate Tables — Bank of Tanzania Data
All data sourced from Bank of Tanzania Table A4 (Interest Rates Structure). All values are percentages per annum.
Table 1: Commercial Bank Lending Interest Rates (% per annum)
Rate Category
Feb-25
Mar-25
Apr-25
May-25
Jun-25
Jul-25
Aug-25
Sep-25
Oct-25
Nov-25
Dec-25
Jan-26
Feb-26
YoY Change
Overall Lending Rate
15.14
15.50
15.16
15.18
15.23
15.16
15.07
15.18
15.19
15.27
15.24
15.10
15.11
▼ -0.03pp
Short-Term (≤1 year)
15.77
15.83
16.15
15.96
15.69
15.51
15.64
15.52
15.50
15.53
15.46
15.49
15.41
▼ -0.36pp
Medium-Term (1–2 years)
16.06
16.56
16.33
16.35
16.49
16.41
16.45
16.26
16.42
16.42
16.42
16.73
16.70
▲ +0.64pp
Medium-Term (2–3 years)
15.53
16.44
15.25
15.24
15.38
15.22
15.01
15.19
15.13
15.18
15.43
14.97
15.27
▼ -0.26pp
Long-Term (3–5 years)
14.09
14.32
13.88
14.19
14.35
14.39
14.02
14.26
14.24
14.43
14.29
14.05
13.95
▼ -0.14pp
Term Loans (>5 years)
14.25
14.36
14.19
14.17
14.25
14.28
14.22
14.66
14.68
14.79
14.61
14.24
14.20
▼ -0.05pp
Negotiated Lending Rate
13.42
12.94
12.88
12.99
12.68
12.56
12.72
12.84
12.40
12.61
12.38
12.25
12.19
▼ -1.23pp
Table 2: Commercial Bank Deposit Interest Rates (% per annum)
Note: Short-term spread = Short-term lending rate (≤1yr) minus 12-month deposit rate. CBR = Central Bank Rate set by Monetary Policy Committee. Source: Bank of Tanzania Table A4 & Table 2.3.1.
TICGL Strategic Analysis
What Tanzania's Interest Rate Structure Means for You
TICGL's interpretation of the rate landscape for borrowers, investors, depositors, and businesses operating in or entering Tanzania in 2026.
📉
Lending Rates: Gradually Becoming More Affordable
The overall lending rate fell from 15.14% in Feb 2025 to 15.11% in Feb 2026 — modest but part of a structural downtrend. More significantly, the negotiated rate dropped 123 basis points (from 13.42% to 12.19%), reflecting improved credit quality, lower Treasury bill yields, and enhanced monetary policy transmission. Businesses securing investment financing now can lock in historically competitive terms.
💹
Deposit Rates: Exceptional Real Returns vs. Global Peers
With a 12-month deposit rate of 9.82% and inflation at 3.2%, Tanzania offers a real deposit return of ~6.62% — exceptionally high by international standards. For regional treasury managers and institutional investors, TZS-denominated fixed deposits represent a high-yield, relatively low-risk instrument in the East African context.
📐
Spread Compression: A Structural Improvement Signal
The short-term interest rate spread narrowed from 6.29pp (Feb 2025) to 5.59pp (Feb 2026) — a 70 basis point improvement in banking efficiency. This trend is driven by falling Treasury bill rates (from 11.93% to 5.68%), which reduces banks' alternative investment returns and forces them to compete more aggressively on deposit and lending pricing.
🏢
Prime vs. Standard: The 296bp Access Premium
The gap between the overall lending rate (15.11%) and the negotiated rate (12.19%) is 296 basis points — the "financial access premium" paid by small and medium enterprises. Reducing this gap through credit information systems, collateral reform, and development finance is central to Tanzania's financial inclusion agenda and a key priority for TICGL advisory clients.
📊
T-Bill Rate Collapse: Implications for Asset Allocation
The dramatic fall in Treasury bill yields — from 11.93% (Feb 2025) to 5.68% (Feb 2026) — fundamentally changes bank asset allocation decisions. With government securities yielding less, banks have greater incentive to lend to the private sector, contributing to the 24.4% private sector credit growth recorded in February 2026. This is a powerful tailwind for business investment.
🌍
Regional Positioning: Attractive vs. East African Peers
At 15.11%, Tanzania's overall lending rate is competitive within the EAC region, where comparable economies show similar or higher rates. The key differentiator is Tanzania's combination of relatively low inflation (3.2%), stable exchange rate, and growing banking sector depth — making the real cost of capital increasingly attractive to long-term investors.
🎯 TICGL Rate Outlook: What to Watch in 2026
Three dynamics will shape Tanzania's interest rate environment through the remainder of 2026: (1) CBR direction — the MPC held at 5.75% for Q1 2026; any future cut would accelerate lending rate compression; (2) T-Bill yield floor — at 5.68%, Treasury bill rates are near the CBR floor, limiting further decline and setting a minimum for bank deposit pricing; (3) Private sector credit demand — with credit growing at 24.4%, rising loan demand could provide upward pressure on lending rates, counteracting monetary easing. Net effect: rates likely to remain broadly stable in 2026, with negotiated rates continuing their gradual downward trend.
TICGL's Business Intelligence Dashboard provides historical and current data on Tanzania's lending rates, deposit rates, Treasury bill yields, monetary policy rates, and more — all in one place for investors, analysts, and businesses.
Tanzania Domestic Debt 2026: Government Debt by Creditor Category | TICGL
TICGL Economic Intelligence · BoT MER March 2026
Tanzania's Domestic Debt: Who Holds the Government's Obligations?
A rigorous breakdown of Tanzania's TZS 38.78 trillion domestic debt stock as of February 2026 — analysing the creditor landscape: commercial banks, pension funds, the Bank of Tanzania, insurance firms, and the broader market. Sourced from Bank of Tanzania official data.
Tanzania's domestic government debt is held across five major creditor groups. Commercial banks and pension funds collectively account for over 54 percent of all domestic obligations, making them the principal financiers of the government's domestic borrowing programme. The Bank of Tanzania maintains a significant monetary financing role at 19.3 percent.
🏦
Commercial Banks
27.9%
TZS 10,834.3B
↓ from 28.8% (Feb-25) · Largest single holder
🏛️
Pension Funds
27.0%
TZS 10,463.9B
↑ from 26.7% (Feb-25) · Long-term investors
🏧
Bank of Tanzania
19.3%
TZS 7,468.4B
↓ from 20.1% (Feb-25) · Monetary authority
🛡️
Insurance Companies
5.1%
TZS 1,983.5B
↓ from 5.4% (Feb-25) · Regulatory holders
🏢
BOT Special Funds
2.0%
TZS 757.8B
↑ from 1.6% (Feb-25) · BoT managed funds
🌐
Others
18.8%
TZS 7,273.8B
Incl. public institutions, private companies, individuals, non-residents
Table 2.6.6 — Government Domestic Debt by Creditor Category
TZS Billions · Source: Ministry of Finance & Bank of Tanzania
Creditor
Feb-25 (TZS B)
Feb-25 Share
Jan-26 (TZS B)
Jan-26 Share
Feb-26 (TZS B)
Feb-26 Share
YoY Change (TZS B)
YoY Δ Share (pp)
🏦 Commercial Banks
9,791.4
28.8%
10,902.5
28.2%
10,834.3
27.9%
+1,042.9
−0.9pp
🏛️ Pension Funds
9,097.2
26.7%
10,389.5
26.9%
10,463.9
27.0%
+1,366.7
+0.3pp
🏧 Bank of Tanzania
6,847.5
20.1%
7,436.0
19.3%
7,468.4
19.3%
+620.9
−0.8pp
🛡️ Insurance Companies
1,852.3
5.4%
2,005.0
5.2%
1,983.5
5.1%
+131.2
−0.3pp
🏢 BOT Special Funds
552.7
1.6%
737.8
1.9%
757.8
2.0%
+205.1
+0.4pp
🌐 Others
5,872.8
17.3%
7,128.9
18.5%
7,273.8
18.8%
+1,401.0
+1.5pp
📋 TOTAL DOMESTIC DEBT
34,014.1
100%
38,599.6
100%
38,781.7
100%
+4,767.6
—
Source: Ministry of Finance and Bank of Tanzania · p = provisional · BOT = Bank of Tanzania · pp = percentage points
Domestic Debt by Borrowing Instruments
The instrument breakdown reveals a strong preference for long-term Treasury bonds, which now constitute over 80 percent of the domestic debt portfolio. This reflects the government's deliberate strategy to reduce rollover risk and extend the maturity profile of its domestic obligations — a favourable development for debt sustainability.
80.8%
📜 Treasury Bonds share (Feb-26)
4.3%
📄 Treasury Bills share
14.6%
🔄 Non-Securitised Debt (Overdraft)
TZS 182B
📉 Net change in T-Bills (MoM)
Instrument Share — February 2026
% of Total Domestic Debt
Treasury Bonds vs Treasury Bills — Value Trend
TZS Billions · Feb-25, Jan-26, Feb-26
Table 2.6.5 — Government Domestic Debt by Borrowing Instruments
TZS Billions · Source: Ministry of Finance & Bank of Tanzania
Instrument
Feb-25 (TZS B)
Feb-25 Share
Jan-26 (TZS B)
Jan-26 Share
Feb-26 (TZS B)
Feb-26 Share
YoY Change (TZS B)
📜Government Securities
29,108.2
85.6%
32,972.3
85.4%
33,122.0
85.4%
+4,013.8
Treasury Bills
1,847.4
5.4%
1,821.4
4.7%
1,653.0
4.3%
−194.4
Government Stocks
187.1
0.6%
135.7
0.4%
135.7
0.4%
−51.4
Government Bonds
27,073.7
79.6%
31,015.1
80.4%
31,333.2
80.8%
+4,259.5
Tax Certificates
0.1
0.0%
0.1
0.0%
0.1
0.0%
0.0
🔄Non-Securitised Debt
4,905.9
14.4%
5,627.3
14.6%
5,659.7
14.6%
+753.8
Overdraft (BoT)
4,887.5
14.4%
5,627.2
14.6%
5,659.6
14.6%
+772.1
Other Liabilities
18.4
0.1%
0.0
0.0%
0.0
0.0%
−18.4
📋 TOTAL (excl. liquidity papers)
34,014.1
100%
38,599.6
100%
38,781.7
100%
+4,767.6
Source: Ministry of Finance and Bank of Tanzania · p = provisional · Excludes liquidity papers
Domestic Debt Growth Trend
Tanzania's domestic debt has grown from TZS 13.74 trillion in February 2018 to TZS 38.78 trillion in February 2026 — a 182 percent increase over eight years. This section tracks the trajectory of the domestic debt stock and the evolution of creditor composition over time, with particular attention to the growing role of pension funds.
Government Domestic Debt Stock — Historical Trend (Feb-18 to Feb-26)
TZS Billions · Source: Chart 2.6.1, Bank of Tanzania MER March 2026
Creditor Holdings Over Time — Feb-25, Jan-26, Feb-26
TZS Billions · Stacked by Creditor Category
Government Securities Issued for Financing (Feb-25 → Feb-26)
TZS Billions · T-Bills + T-Bonds Monthly
Creditor Share Shift — Feb-25 vs Feb-26
Percentage Point Change (pp) Year-on-Year
Year-on-Year Growth by Creditor — Feb-25 to Feb-26
TZS Billions · Growth in holdings & share shift
Creditor
Feb-25 (TZS B)
Feb-26 (TZS B)
Absolute Change (TZS B)
Growth Rate (%)
Share Feb-25
Share Feb-26
Share Δ (pp)
Source: Table 2.6.6, Ministry of Finance and Bank of Tanzania · MER March 2026 · p = provisional
TICGL Analytical Commentary
TICGL's independent interpretation of Tanzania's February 2026 domestic debt creditor data — highlighting structural trends, investment implications, and policy risks.
💡 Five Key Observations from TICGL Research
1. Pension Funds Overtaking Commercial Banks as Dominant Creditors. The gap between commercial bank holdings (27.9%) and pension fund holdings (27.0%) has narrowed sharply over the review period. In February 2025, commercial banks held 28.8% versus pension funds' 26.7% — a gap of 2.1 percentage points. By February 2026, the gap has compressed to just 0.9 percentage points. At current trends, pension funds are positioned to become Tanzania's largest domestic creditor within 12–18 months. This structural shift has important implications for investment regulation, duration management, and the broader pension sector's exposure to sovereign risk.
2. BoT Overdraft Growth Demands Monitoring. The Bank of Tanzania's overdraft to the government stands at TZS 5,659.6 billion — a TZS 772.1 billion increase year-on-year. This form of quasi-monetary financing, while institutionally managed, can create inflationary pressure if sustained at elevated levels. The TZS 5.66 trillion overdraft now represents 14.6% of total domestic debt, unchanged from January 2026 but materially higher than historical averages. Investors should track this figure closely as a proxy for fiscal pressure on the central bank.
3. Treasury Bond Dominance Signals Improved Debt Structure. Government bonds now account for 80.8% of all domestic debt (up from 79.6% in Feb-25), reflecting the Treasury's continued preference for long-duration instruments. The near-elimination of short-term T-Bills in the financing mix (T-Bills fell from 5.4% to 4.3% of total debt year-on-year) reduces rollover risk and aligns the domestic debt profile with international best practices for debt sustainability.
4. "Others" Category Expanding — A Diversification Signal. The "Others" creditor group — comprising public institutions, private companies, individuals, and non-residents — grew its share from 17.3% (Feb-25) to 18.8% (Feb-26), adding TZS 1.4 trillion in holdings year-on-year. This is the fastest-growing creditor category in absolute terms, likely reflecting increased retail and non-resident participation in Tanzania's domestic bond market. TICGL views this as a positive diversification trend, reducing the government's reliance on captive institutional buyers.
5. Insurance Sector's Declining Share — A Regulatory Watch Point. Insurance companies' share declined from 5.4% to 5.1% year-on-year. While absolute holdings grew slightly (TZS 1,852B to TZS 1,984B), the relative decline suggests insurance firms may be rebalancing their portfolios away from government securities — potentially toward equities or real estate. Regulators and policymakers should monitor whether this trend reflects portfolio diversification (healthy) or liquidity stress (concerning) within the insurance sector.
Explore More TICGL Research
Deepen your understanding of Tanzania's economic landscape with these TICGL resources.
Disclaimer & Source Attribution: All data on this page is sourced from the Bank of Tanzania Monthly Economic Review, March 2026 (data period: February 2026). Primary tables: 2.6.5 (Domestic Debt by Instrument), 2.6.6 (Domestic Debt by Creditor Category), and Chart 2.6.1. TICGL analytical commentary represents the independent research interpretation of Tanzania Investment and Consultant Group Ltd and does not constitute investment advice. Figures are provisional where indicated. Refer to official Bank of Tanzania publications for authoritative data.
