Tanzania Shilling Stability vs. National Debt 2026: Is the TZS Outrunning Its Debt Burden? | TICGL
TICGL Economic Research · Currency & Public Debt Series
Tanzania Shilling Stability vs. National Debt: Is the TZS Outrunning Its Debt Burden?
The Shilling strengthened against the US Dollar over the past year even as Tanzania's national debt climbed to TZS 134.35 trillion. TICGL examines why — and whether this stability can hold as external debt, oil costs and debt-servicing needs keep rising.
📅 Published 12 July 2026📄 Source: Bank of Tanzania Monthly Economic Review, June 2026⏰ ~11 min read
The Tanzanian Shilling has been unusually stable in 2026, trading at TZS 2,616.88/USD in May 2026, and on an annual-average basis actually strengthened by 3.02 percent — a sharp turnaround from the 3.82 percent depreciation recorded a year earlier.
This stability sits alongside a growing national debt of TZS 134.35 trillion, of which 70.8 percent (TZS 95.10 trillion) is external and roughly 62.9 percent US Dollar-denominated — meaning currency movements directly reshape the local-currency size and cost of Tanzania's debt.
Over the year to May 2026, external debt grew 8.52 percent in US Dollar terms but only 5.43 percent in Shilling terms — the Shilling's appreciation effectively "absorbed" about TZS 2.78 trillion of what would otherwise have shown up as additional debt.
Foreign-currency debt servicing looks manageable for now: the last twelve months of external debt service (≈USD 2.0 billion) equal about 10.2 percent of annual export earnings (USD 19.7 billion) — a moderate ratio by regional standards.
Reserves of USD 5,538.8 million cover 4.3 months of imports and are equivalent to about 15.2 percent of the total external debt stock — a reasonable, though not large, buffer.
The stability is being driven largely by a 46.7 percent surge in gold export receipts and active Bank of Tanzania intervention in the Interbank Foreign Exchange Market, not by a structural narrowing of the trade deficit — a distinction that matters for how durable this stability is.
Continue the Series
Read Our Full National Debt Breakdown and the Dira 2050 Policy Gap Study
This piece builds directly on TICGL's TZS-denominated National Debt Overview and our flagship study on the reforms needed to hit Tanzania's $1 trillion Dira 2050 target.
Contrary to what a large and rising debt stock might suggest, the Shilling has held up well. It closed May 2026 at TZS 2,616.88 per USD (monthly average), only marginally weaker than April's TZS 2,612.46. Looking at the broader trend using end-of-period rates, the Shilling actually moved from TZS 2,685.6/USD in May 2025 to TZS 2,609.2/USD in May 2026 — an appreciation of roughly 2.8–3.0 percent over twelve months.
TZS/USD Exchange Rate, End of Period
May 2025 – May 2026
Source: Bank of Tanzania, National Debt Developments table (Table A10).
The path was not linear: the Shilling strengthened steadily from May to November 2025 (reaching a twelve-month low of TZS 2,436.8/USD), before gradually giving back some ground from December 2025 through May 2026 as the Middle East oil shock pushed up the import bill. Even so, it never approached the depreciation trend seen in prior years.
2. Why the Debt's Currency Mix Matters
Exchange rate movements are not just a trade story — they are a debt story. As of May 2026, 62.9 percent of Tanzania's disbursed external debt was denominated in US Dollars, with the Euro (15.6%), Chinese Yuan (5.8%) and other currencies (15.6%) making up the rest. Because most of this debt is contracted in foreign currency, every Shilling movement automatically changes the local-currency value of the debt stock and the Shilling cost of servicing it — regardless of any new borrowing.
US Dollar Share of External Debt: Diversifying but Still Dominant
Percent of disbursed external debt
Source: Ministry of Finance and Bank of Tanzania (Table 2.6.4).
External Debt Currency Composition, May 2026
Share of disbursed external debt
Source: Ministry of Finance and Bank of Tanzania (Table 2.6.4).
The good news is that the dollar's share has been falling steadily — from 66.6 percent in May 2025 to 62.9 percent in May 2026 — as Tanzania diversifies its external financing sources. A more diversified currency mix reduces the risk that a single currency's movement can materially destabilise the debt stock, though the US Dollar will likely remain the anchor currency for the foreseeable future given multilateral lenders' preferences.
3. The Valuation Effect: How FX Moves Change Debt's Local-Currency Size
This is the crux of the relationship between currency stability and debt: Tanzania's external debt grew 8.52 percent in US Dollar terms over the year to May 2026 (from USD 33,586.1 million to USD 36,446.8 million) — but only 5.43 percent when measured in Tanzanian Shillings (from TZS 90.20 trillion to TZS 95.10 trillion). The gap between these two growth rates is the Shilling's appreciation doing quiet work in the background.
External Debt Growth: US Dollar Terms vs. Shilling Terms
Year-on-year growth to May 2026
Source: TICGL computations based on Bank of Tanzania Table A10.
TICGL Calculation — The "Cushioning Effect"
If the exchange rate had remained at its May 2025 level (TZS 2,685.6/USD) instead of appreciating to TZS 2,609.2/USD by May 2026, Tanzania's May-2026 external debt of USD 36,446.8 million would have been worth TZS 97.88 trillion — not the actual TZS 95.10 trillion recorded. In other words, Shilling appreciation "saved" roughly TZS 2.78 trillion off the local-currency size of the external debt stock over the year, purely through the exchange rate channel, independent of any actual repayment.
This cuts both ways. The same mechanism that shrank the debt's local-currency footprint this year would inflate it just as quickly if the Shilling depreciated instead — a live risk given the ongoing Middle East energy shock and its pressure on Tanzania's import bill (see Section 6).
4. Can Tanzania Pay? Reserves and Debt Service Coverage
Currency stability also depends on Tanzania's ability to meet foreign-currency obligations without straining reserves. On this front, the picture is reassuring but not overly comfortable.
Gross Reserves vs. Total External Debt Stock
Millions of USD, May 2026
Source: Bank of Tanzania.
External Debt Service, Trailing 12 Months
Millions of USD, June 2025 – May 2026
Source: Bank of Tanzania (Table A10).
Key External Debt Sustainability Ratios, May 2026
Metric
Value
Interpretation
Reserves ÷ total external debt stock
15.2%
Reserves cover a modest but non-trivial share of total external obligations
A single month's servicing uses a small share of the reserve buffer
Twelve-month external debt service totalled approximately USD 2.0 billion against export earnings of USD 19.7 billion — a debt service-to-exports ratio of about 10.2 percent, comfortably below levels typically associated with debt distress. This is a key reason the Shilling has not come under the kind of pressure a rapidly growing debt stock might otherwise imply.
5. What's Keeping the Shilling Stable
Three forces explain the Shilling's resilience even as debt has grown:
Gold exports up 46.7% y/y to USD 5.53bnIFEM turnover up to USD 119.3m in May 2026BOT auctioned USD 44m in May (vs USD 15.3m in April)Reserves rose to USD 5,538.8m
Gold, gold, gold. The single largest driver of FX supply has been the gold sector: gold exports surged 46.7 percent year-on-year to USD 5,532.3 million (year ending May 2026), on both higher global prices and rising domestic production. This has provided the Bank of Tanzania with the foreign-currency firepower to intervene decisively in the Interbank Foreign Exchange Market — auctioning USD 44 million in May 2026 alone, nearly triple April's USD 15.3 million — while still growing reserves.
Seasonal currency inflows tied to the gold-purchase programme, alongside resilient travel/tourism receipts (up 9.5% to USD 4,419.1 million) and transport/logistics earnings (up 16.0% to USD 3,146.3 million), have together kept the current account deficit from translating into currency pressure, even as goods imports — especially refined petroleum — rose sharply on the back of the Middle East oil shock.
6. Risks on the Horizon
Key Risks to Watch
A prolonged Middle East oil shock would keep import bills elevated (petroleum imports already up 9.9% y/y to USD 2,657.8 million) and could eventually outpace even strong gold receipts, pressuring the Shilling and, via the valuation effect described above, inflating the TZS-value of external debt.
Gold-price dependency means FX stability is currently concentrated in a single commodity; a correction in gold prices (currently at historically elevated levels around USD 4,587/troy oz) would remove a key stabilising pillar.
Widening goods trade deficit: the current account deficit widened to USD 2,209.5 million (year ending May 2026) from USD 2,090.9 million a year earlier, as import growth (17.8%) matched export growth — meaning the trade gap itself has not actually narrowed.
Refinancing and short-term rollover risk: although Tanzania's external portfolio is dominated by concessional multilateral debt, commercial creditors (36.4% of external debt) typically carry less favourable terms and shorter maturities, increasing rollover exposure if global financial conditions tighten.
7. TICGL's Assessment
On balance, the relationship between Shilling stability and national debt in 2026 looks favourable but externally financed rather than structurally earned. The currency's strength is real and has meaningfully reduced the Shilling-value of Tanzania's external debt over the past year — a genuine fiscal relief of roughly TZS 2.78 trillion. But this relief has been purchased largely through a single-commodity windfall (gold) and active central bank intervention, not through a durable narrowing of the trade deficit or a structural shift away from imported energy dependence.
The Government's own policy response — capping the FY2026/27 fiscal deficit at 3% of GDP, financing 74.2% of the budget domestically, and tightening the Bank of Tanzania's overdraft ceiling from 18% to 14% of prior-year revenue — suggests policymakers are aware that today's currency-debt equilibrium should not be taken for granted. For businesses and investors, the practical takeaway is that Tanzania's FX and debt outlook currently rests on the durability of gold export earnings and BOT's reserve-management capacity; a sustained oil-price shock or gold price correction is the clearest scenario that could simultaneously weaken the Shilling and re-inflate the local-currency debt burden.
Muhtasari kwa Kiswahili
Uimara wa Shilingi: Shilingi ya Tanzania imeendelea kuwa imara dhidi ya Dola ya Marekani, ikiimarika kwa wastani wa asilimia 3.02 kwa mwaka unaoishia Mei 2026 — tofauti kabisa na kushuka kwa asilimia 3.82 kulikorekodiwa mwaka uliopita.
Uhusiano na deni la Taifa: Asilimia 62.9 ya deni la nje la Tanzania limehesabiwa kwa Dola za Marekani, hivyo mabadiliko ya thamani ya Shilingi yanaathiri moja kwa moja ukubwa wa deni hilo likipimwa kwa Shilingi.
"Faida" ya kuimarika kwa Shilingi: Deni la nje liliongezeka kwa asilimia 8.52 likipimwa kwa Dola, lakini kwa Shilingi liliongezeka kwa asilimia 5.43 tu — ikimaanisha kuimarika kwa Shilingi kumepunguza deni hilo kwa takribani TZS trilioni 2.78 pasipo hata malipo yoyote ya ziada kufanyika.
Uwezo wa kulipa deni: Malipo ya deni la nje kwa miezi 12 ni sawa na asilimia 10.2 tu ya mapato ya mauzo nje — kiwango kinachokubalika kiuchumi na mbali na hatari kubwa ya kushindwa kulipa deni.
Vyanzo vya uimara: Ongezeko kubwa la mauzo ya dhahabu (asilimia 46.7) na hatua za Benki Kuu za kuingilia soko la fedha za kigeni (IFEM) ndivyo vinavyoshikilia uimara huu — hivyo tahadhari inahitajika endapo bei ya dhahabu itashuka au mgogoro wa mafuta Mashariki ya Kati utaendelea kwa muda mrefu.
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Primary source: Bank of Tanzania, Monthly Economic Review, June 2026 (Tables 2.4.3, 2.6.4, A10 and related), ISSN 0856-6844. Valuation-effect and coverage-ratio calculations are TICGL/TERI computations based on published BOT and Ministry of Finance data; figures may not sum exactly due to rounding. Analysis by the Tanzania Economic Research Institute (TERI), a research arm of TICGL. This page is for informational purposes and does not constitute investment or financial advice.
Tanzania Shilling vs. Inflation Rate 2026: Why a Stable Currency Didn't Stop Rising Prices | TICGL
TICGL Economic Research · Currency & Inflation Series
Tanzania Shilling vs. Inflation Rate: Why a Stable Currency Didn't Stop Rising Prices
The Shilling strengthened against the Dollar over the past year, yet headline inflation still climbed to 4.2 percent. TICGL unpacks why — and shows how a global oil shock, not currency weakness, is behind Tanzania's price pressures in 2026.
📅 Published 12 July 2026📄 Source: Bank of Tanzania Monthly Economic Review, June 2026⏰ ~10 min read
Tanzania's headline inflation rose to 4.2 percent in May 2026 (from 4.0% in April and 3.2% a year earlier) — yet the Shilling was simultaneously stable and appreciating, strengthening 3.02 percent on an annual-average basis against the US Dollar.
This is unusual: inflation and currency weakness typically move together in Tanzania via imported-price pass-through. In 2026, that link has effectively been severed by a much bigger force — a Middle East-driven oil shock that pushed Brent crude up roughly 67.5 percent year-on-year in US Dollar terms.
Because oil is priced globally in US Dollars, the shock hit Tanzania's economy regardless of the Shilling's strength — transport inflation surged from 1.7 percent to 11.9 percent year-on-year, the single largest driver of the headline rate.
Currency stability did help at the margin: TICGL calculates that Shilling appreciation cushioned the local-currency cost of the oil shock by roughly 3 to 5 percentage points — without it, inflation would likely have been noticeably higher.
Core inflation (excluding food and energy) also rose, from 2.1 percent to 3.4 percent, suggesting early signs of second-round effects spreading beyond fuel into cement, transport-linked services and household costs.
The Bank of Tanzania held its Central Bank Rate at 5.75 percent rather than tightening — a signal that policymakers view this as an externally driven, cost-push shock rather than one caused by excess domestic demand or currency instability.
Continue the Series
Read Our Full Currency & National Debt Analyses
This piece is part of TICGL's currency-focused series, alongside our analyses of Shilling stability versus national debt and the full BOT Monthly Review breakdown.
1. Two Trends, One Puzzle: A Stronger Shilling, Rising Prices
On paper, these two facts should not sit comfortably together: the Shilling ended May 2026 at TZS 2,609.2/USD (end of period), stronger than the TZS 2,685.6/USD recorded a year earlier — yet headline inflation rose from 3.2 percent to 4.2 percent over the same period. The chart below overlays both series and makes the divergence visible: the exchange rate line is broadly flat-to-falling (Shilling strengthening), while the inflation line trends upward, especially from March 2026 onward.
TZS/USD Exchange Rate vs. Headline Inflation
May 2025 – May 2026 (dual axis)
Source: Bank of Tanzania and National Bureau of Statistics; TICGL computations.
The takeaway is immediate: whatever is driving Tanzania's inflation in 2026, it is not currency weakness. Something else — external and commodity-driven — is at work.
2. The Real Culprit: A Dollar-Priced Global Oil Shock
The evolving conflict in the Middle East and the closure of the Strait of Hormuz curtailed Gulf oil production and exports, sending Brent crude from a pre-conflict level of around USD 63/barrel in late 2025 to a peak above USD 120/barrel in April 2026 — an increase of roughly 89 percent from trough to peak — before easing to USD 107.14/barrel in May. Because crude oil, refined petroleum and related products are priced in US Dollars on world markets, this shock reaches Tanzanian consumers through the import bill irrespective of how strong or weak the Shilling is.
Brent Crude Oil Price vs. Tanzania Transport Inflation
USD per barrel (left) vs. Transport inflation, percent y/y (right)
Source: U.S. Energy Information Administration; National Bureau of Statistics; Bank of Tanzania.
The correlation is unmistakable: as Brent climbed through March and April 2026, Tanzania's transport inflation followed almost in lockstep, jumping from 4.3 percent in March to 9.2 percent in April and 11.9 percent by May — even as fuel subsidies were introduced between April and May 2026 specifically to cushion the blow.
3. How Much Did Currency Stability Actually Help?
Currency stability was not irrelevant — it just wasn't enough. TICGL calculates the extent to which Shilling appreciation softened the shock by comparing the US Dollar-denominated price increase against the same increase re-expressed in Shillings.
Brent Crude: USD Growth vs. Shilling-Equivalent Growth
Year-on-year change to May 2026
Source: TICGL computations based on EIA and Bank of Tanzania data.
Petroleum Import Bill: USD vs. Shilling Growth
Year ending May, USD vs. TZS growth
Source: Tanzania Revenue Authority; Bank of Tanzania; TICGL computations.
TICGL Calculation — The Currency Cushion
Brent crude rose 67.5 percent in US Dollar terms over the year to May 2026. Re-expressed in Shillings using each period's prevailing exchange rate, the increase works out to about 62.7 percent — a cushion of roughly 4.8 percentage points thanks to the Shilling's appreciation. Similarly, Tanzania's petroleum import bill (year ending May) grew 9.9 percent in US Dollar terms but only 6.8 percent in Shilling terms — a cushion of about 3.1 percentage points. Without this currency stability, transport and energy inflation in May 2026 would very likely have been higher than the 11.9 percent and 5.0 percent actually recorded.
In short: the Shilling absorbed part of the shock, but the shock itself was simply too large to fully offset. A roughly 60–90 percent swing in global oil prices cannot be neutralised by a 3 percent currency movement.
4. Where Inflation Is Coming From
Breaking inflation down by category confirms the story is about energy and transport, not a broad-based currency-driven price spiral. Food inflation actually eased slightly to 5.6 percent on good harvests and adequate National Food Reserve Agency stocks (500,692 tonnes in May 2026). Housing, water, electricity, gas and other fuels inflation actually fell sharply to just 0.7 percent, likely reflecting utility tariff stability and targeted subsidies.
Inflation by Category: May 2025 vs. May 2026
Annual percentage change
Source: National Bureau of Statistics and Bank of Tanzania computations.
Inflation by Category (Annual % Change)
Category
May 2025
May 2026
Change (pp)
Transport
1.7
11.9
+10.2
Core inflation
2.1
3.4
+1.3
Personal care, social protection & misc.
2.0
3.5
+1.5
Headline inflation
3.2
4.2
+1.0
Food and non-alcoholic beverages
5.6
5.6
0.0
Energy, fuel and utilities
6.1
5.0
-1.1
Housing, water, electricity, gas & other fuels
3.4
0.7
-2.7
Transport's 10.2 percentage-point jump is by far the largest mover, and it is the direct fingerprint of the oil shock. Core inflation's more modest 1.3 percentage-point rise (to 3.4%) reflects some early second-round effects — cement and transport-linked services costs — but nothing close to the scale of the transport spike itself.
5. Why This Breaks the Usual Depreciation–Inflation Link
In most emerging markets, including Tanzania historically, the textbook inflation story runs through the exchange rate: the currency weakens → imports become more expensive in local currency → inflation rises. Policymakers and analysts typically watch the Shilling as an early-warning signal for inflation.
The May 2026 episode is different, and instructive. Here, the causal arrow runs almost entirely through the global commodity price, not the exchange rate:
This matters for how businesses and investors should read exchange-rate news going forward: a stable or strengthening Shilling in 2026 is not, by itself, a reliable signal that inflation risk is contained. Watching global energy markets — specifically the durability of the Strait of Hormuz disruption — is now more informative for Tanzania's near-term inflation outlook than watching the IFEM exchange rate alone.
6. The Policy Response
The Government and the Bank of Tanzania have responded on two fronts rather than one:
Fiscal response: targeted fuel subsidies
Fuel subsidies were introduced between April and May 2026 specifically to cushion consumers from the pass-through of elevated global fuel prices to transport costs — a direct, targeted response to a cost-push shock, rather than a broad-based demand measure.
Monetary response: hold, don't hike
The Monetary Policy Committee maintained the Central Bank Rate at 5.75 percent for the quarter ending June 2026, judging that the inflation pressure stems from an external, cost-push oil shock rather than excess domestic demand or currency instability — conditions where interest rate hikes would have limited effectiveness and unnecessary costs for private sector credit, which is currently growing at a healthy 23.2 percent.
This dual approach — fiscal cushioning at the pump, monetary steadiness at the policy rate — reflects a coherent read of the shock's nature: it is imported and temporary in origin, not a symptom of an overheating domestic economy.
7. TICGL's Assessment
The relationship between the Shilling and inflation in 2026 is a useful reminder that currency stability is necessary but not sufficient for price stability when a shock originates in globally-priced commodities. Tanzania's strong external buffers — gold-driven reserve accumulation, active BOT intervention, and a genuinely appreciating currency — deserve credit for keeping inflation at 4.2 percent rather than materially higher, comfortably still within the national target band and SADC/EAC convergence criteria.
The key risk to monitor is duration, not direction: if the Strait of Hormuz disruption persists or intensifies, the 4.8-percentage-point currency cushion identified in this analysis will not scale to offset a larger or more prolonged price shock. Equally important is whether the modest rise already visible in core inflation (2.1% → 3.4%) is the start of broader second-round effects into wages, cement and services pricing — the point at which a temporary, imported shock could start to look more like a persistent, domestic one.
Muhtasari kwa Kiswahili
Fumbo la msingi: Ingawa Shilingi ya Tanzania iliendelea kuimarika (asilimia 3.02 kwa mwaka), mfumuko wa bei uliongezeka hadi asilimia 4.2 mwezi Mei 2026 — kinyume na mtazamo wa kawaida kwamba fedha imara inamaanisha bei tulivu.
Chanzo halisi: Chanzo kikuu ni mgogoro wa mafuta duniani uliosababishwa na vita Mashariki ya Kati na kufungwa kwa Mlango wa Hormuz, uliopandisha bei ya mafuta ghafi (Brent) kwa takribani asilimia 67.5 kwa mwaka. Kwa kuwa mafuta yanauzwa kwa Dola duniani kote, mshtuko huu unaathiri Tanzania bila kujali uimara wa Shilingi.
Mchango wa Shilingi: Uimara wa Shilingi ulisaidia kwa kiasi — ulipunguza gharama ya mafuta kwa takribani pointi 3 hadi 5 za asilimia. Bila hilo, mfumuko wa bei ungekuwa mkubwa zaidi.
Sekta iliyoathirika zaidi: Usafirishaji (transport) ndiyo sekta iliyoathirika zaidi, mfumuko wake ukipanda kutoka asilimia 1.7 hadi asilimia 11.9 kwa mwaka mmoja tu.
Hatua za Serikali: Serikali ilianzisha ruzuku ya mafuta kati ya Aprili na Mei 2026, huku Benki Kuu ikiendelea kudumisha Riba ya Benki Kuu (CBR) katika asilimia 5.75, ikitambua kuwa chanzo cha mfumuko huu ni cha nje (bei ya mafuta duniani) na si mahitaji makubwa ya ndani.
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Primary source: Bank of Tanzania, Monthly Economic Review, June 2026 (Tables 2.1.1, 2.1.5, A8, A9, A10 and related), ISSN 0856-6844. Currency-cushioning calculations are TICGL/TERI computations based on published BOT, EIA and Tanzania Revenue Authority data; figures may not sum exactly due to rounding. Analysis by the Tanzania Economic Research Institute (TERI), a research arm of TICGL. This page is for informational purposes and does not constitute investment or financial advice.
Tanzania Government Domestic Debt by Creditor Category (2026) | TICGL Analysis
TICGL Economic Research (TERI) — Domestic Debt BriefSource: Bank of Tanzania & Ministry of Finance, Monthly Economic Review, June 2026
Tanzania Investment and Consultant Group Ltd · TICGL Economic
Who Finances Tanzania's Government? A Creditor-Category Breakdown of Domestic Debt
Commercial banks and pension funds now hold 55 percent of Tanzania's TZS 39.26 trillion domestic debt, while the Bank of Tanzania's exposure keeps shrinking. Here's the full creditor picture — with data, charts and what it means for private-sector credit.
Domestic debt by creditor: banks and pension funds now carry the load
Tanzania's government domestic debt (excluding liquidity papers) stood at TZS 39,257.3 billion at end-May 2026, marginally down from TZS 39,335.8 billion in April as the government drew down its Bank of Tanzania overdraft. The creditor base has shifted steadily over the past year: commercial banks (28.4%) and pension funds (26.6%) together now hold 55.0 percent of all domestic debt, while the Bank of Tanzania's own share has fallen from 20.3 percent to 19.0 percent — consistent with planned reforms to cut the central bank's overdraft ceiling from 18 to 14 percent of prior-year government revenue. Government bonds remain the dominant instrument, at 81.3 percent of the stock, with the overdraft facility making up 14.4 percent.
TZS 11,149.8bn
Commercial banks' holdings
TZS 10,441.4bn
Pension funds' holdings
TZS 7,455.1bn
Bank of Tanzania's holdings
TZS 5,646.4bn
Overdraft facility balance
TZS 367.7bn
Domestic debt serviced, May-26
Companion Reading
What's Next for Tanzania's Economy? The Policy Gaps Keeping USD 1 Trillion Out of Reach by 2050
Domestic debt management is one of the structural levers TICGL flags in its 2050 growth-gap study — see how financing choices today shape Tanzania's long-term growth trajectory.
Six creditor groups fund Tanzania's domestic debt. Over the twelve months to May 2026, pension funds grew their exposure fastest in absolute terms, commercial banks retained the largest single share, and the Bank of Tanzania's participation continued to decline as a matter of policy.
Domestic debt by creditor category
TZS billion — May-25, Apr-26 and May-26 compared
Creditor share, May 2026
Percentage of total domestic debt stock (excl. liquidity papers)
Government domestic debt by creditor category (TZS billion)
Source: Ministry of Finance and Bank of Tanzania (Table 2.6.6). p = provisional data. YoY = year-on-year change, May-25 to May-26.
Reading the numbers: Pension funds (PSSSF, NSSF and others) grew their domestic debt holdings by 13.5 percent over the year — the fastest of the major creditor groups — reinforcing their role as Tanzania's largest long-term institutional investor base for government securities. Commercial banks remain the single biggest holder in absolute terms, which matters directly for how much balance-sheet capacity is left for private-sector lending.
Historical Context
Eight years of domestic debt growth
Government domestic debt has grown roughly 2.7-fold since May 2018 — from TZS 14,844.1 billion to TZS 39,257.3 billion — as the government leaned more heavily on the domestic securities market to fund development spending. Growth accelerated sharply between 2020 and 2022, moderated through 2023–2024, and has since stabilised near the TZS 39 trillion mark.
Government domestic debt stock, May 2018 – May 2026
TZS billion, annual snapshots (May) plus the two latest months
Source: Ministry of Finance (Chart 2.6.1, Government Domestic Debt Stock).
Cross-Check
By instrument: bonds dominate, overdraft use is easing
Looking at the same debt stock by instrument rather than creditor confirms the story: government bonds make up 81.3 percent of domestic debt, Treasury bills just 4.0 percent, and the Bank of Tanzania overdraft facility 14.4 percent — down from 15.0 percent the month before, the main reason the total stock dipped between April and May 2026.
Domestic debt by borrowing instrument
TZS billion, stacked by instrument type
Domestic debt by borrowing instrument (TZS billion)
Instrument
May-25
Apr-26
May-26p
Share May-26
Government bonds
27,774.8
31,783.7
31,912.3
81.3%
Overdraft (BOT)
5,198.2
5,897.6
5,646.4
14.4%
Treasury bills
2,022.6
1,518.7
1,562.8
4.0%
Government stocks
187.1
135.7
135.7
0.3%
Total
35,201.1
39,335.8
39,257.3
100%
The Bank of Tanzania Act amendment (Cap. 197) will lower the government's overdraft ceiling from 18% to 14% of the prior year's actual revenue starting FY2026/27 — expect the overdraft's share of domestic debt to keep trending down, with more financing shifting to bonds held by banks and pension funds.
Source: Ministry of Finance and Bank of Tanzania (Table 2.6.5). p = provisional data.
Cash Flow
May 2026: new issuance vs. debt servicing
The government raised TZS 278.8 billion in new domestic securities in May 2026 — TZS 128.6 billion from Treasury bonds and TZS 150.2 billion from Treasury bills — while servicing TZS 367.7 billion of existing domestic debt (TZS 106.1 billion in principal and TZS 261.6 billion in interest). Debt servicing exceeded new issuance in the month, consistent with the modest net decline in the total domestic debt stock.
Issuance vs. servicing, May 2026
TZS billion
Reading it
Interest payments (TZS 261.6bn) made up 71 percent of total domestic debt servicing in May 2026 — a reminder that as the stock of government bonds grows, so does the recurring interest bill competing with development spending in the budget.
New issuance was tilted toward Treasury bills (54%) over bonds (46%) in May, a short-term skew that can reflect either investor demand at the time of the auction or deliberate cash-flow management by the government.
Source: Bank of Tanzania (Chart 2.6.2, Issued Government Securities for Financing Purposes).
Pricing Context
Why creditors keep buying: the domestic yield curve
Treasury yields eased across the curve in May 2026 amid ample banking-system liquidity, but long-dated paper still offers pension funds and insurers attractive real returns relative to the 12-month deposit rate (10.17%) — helping explain why long-term institutional investors keep adding to their government-securities holdings.
Treasury bond yield curve — May 2026
Weighted average yield to maturity, percent
Source: Bank of Tanzania (Table A4, Interest Rates Structure).
TICGL Analysis
What this means for investors and policymakers
1. Watch bank balance-sheet capacity
Commercial banks hold TZS 11.15 trillion in government securities — capital that could otherwise support private-sector lending. With private credit growth already running above 23% y/y, any further increase in bank holdings of government paper is worth monitoring for early signs of crowding-out pressure.
2. Pension funds are the swing buyer
Pension funds' 13.5% year-on-year growth in holdings makes them the fastest-growing creditor group. Their appetite for long-dated bonds (15–25 year tenors) gives the government a relatively stable, long-duration funding base — but concentrates asset risk for the pension system.
3. BOT overdraft reform is already visible
The Bank of Tanzania's declining share (20.3% → 19.0%) and the month-on-month drop in overdraft usage both pre-empt the FY2026/27 legal cap reduction from 18% to 14% of revenue — a positive signal for monetary-fiscal separation and inflation credibility.
TICGL Economic
Related TICGL insights & tools
Continue exploring Tanzania's public finances and economy with TICGL's research library, live dashboards and researcher programme.
Deni la Ndani la Serikali kwa Kundi la Wakopeshaji — Mei 2026
Deni la ndani la Serikali (bila karatasi za ukwasi) lilifikia shilingi trilioni 39.26 mwishoni mwa Mei 2026, likishuka kidogo kutoka trilioni 39.34 mwezi Aprili, hasa kutokana na kupungua kwa matumizi ya akaunti ya "overdraft" kutoka Benki Kuu.
Benki za kibiashara zinaendelea kuwa mkopeshaji mkubwa zaidi kwa asilimia 28.4 (shilingi trilioni 11.15), zikifuatiwa na mifuko ya hifadhi ya jamii (mifuko ya pensheni) kwa asilimia 26.6 (shilingi trilioni 10.44) — ikiwa ndiyo kundi lililokua kwa kasi zaidi kwa mwaka mzima (asilimia 13.5). Benki Kuu ya Tanzania (BOT) imepunguza mchango wake kutoka asilimia 20.3 hadi asilimia 19.0 kwa mwaka, sambamba na mpango wa kupunguza kikomo cha "overdraft" ya Serikali kutoka asilimia 18 hadi asilimia 14 ya mapato ya mwaka uliopita, kuanzia mwaka wa fedha 2026/27.
Kwa upande wa aina ya dhamana, hati fungani za Serikali (Treasury bonds) zinaendelea kutawala kwa asilimia 81.3 ya deni lote la ndani, huku "overdraft" ikiwa asilimia 14.4 na dhamana fupi (Treasury bills) asilimia 4.0 pekee. Mwezi Mei 2026, Serikali ilikopa shilingi bilioni 278.8 mpya kupitia dhamana za ndani, huku ikilipa shilingi bilioni 367.7 za deni la zamani (bilioni 106.1 mtaji na bilioni 261.6 riba).
Maana yake kwa wawekezaji: Ushiriki mkubwa wa benki za kibiashara na mifuko ya pensheni katika ukopeshaji wa Serikali unaweza kuathiri uwezo wao wa kukopesha sekta binafsi (crowding-out effect) — jambo ambalo TICGL/TERI inaendelea kulifuatilia kwa karibu.
Tanzania External Debt 2026: Borrower, Use of Funds & Currency Mix | TICGL
TICGL Economic Research (TERI) — External Debt BriefSource: Bank of Tanzania & Ministry of Finance, Monthly Economic Review, June 2026
Tanzania Investment and Consultant Group Ltd · TICGL Economic
The Anatomy of Tanzania's External Debt: Borrower, Use of Funds & Currency Risk
USD 36.4 billion, 81 percent public, mostly financed by multilateral lenders and priced in US dollars. Here's exactly who Tanzania owes, what the money funded, and how exposed the country is to currency swings.
Tanzania's external debt stock (public and private) eased slightly to USD 36,446.8 million at end-May 2026, from USD 36,506.1 million in April, as principal repayments (USD 140 million) outpaced new disbursements (USD 125.9 million). Public debt makes up 81.1 percent of the total, with central government the dominant on-shore borrower. Multilateral institutions remain by far the largest creditor group at 57.5 percent, ahead of commercial lenders at 36.4 percent. By use, balance-of-payments/budget support and transport & telecommunication together absorb 43.6 percent of disbursed debt, while the US dollar still accounts for nearly two-thirds of currency exposure — though that share has fallen almost 4 percentage points in a year as the portfolio diversifies.
USD 29,480.8m
Central government borrowing
USD 6,558.9m
Private-sector external debt
USD 20,946.3m
Owed to multilateral creditors
USD 13,279.7m
Owed to commercial lenders
USD 1,891.0m
Total external debt arrears
Companion Reading
What's Next for Tanzania's Economy? The Policy Gaps Keeping USD 1 Trillion Out of Reach by 2050
External financing choices — who lends, on what terms, and in what currency — are central to TICGL's 2050 growth-gap study. See how today's debt structure shapes tomorrow's fiscal space.
Central government remains overwhelmingly the largest borrower of external debt, though its stock has eased slightly since late 2025 as repayments outpaced new drawdowns. Private-sector external borrowing, by contrast, has grown steadily and touched a 13-month high of USD 6,558.9 million in May 2026. Public corporations, which held a small legacy balance, had fully cleared their external debt by January 2026.
Disbursed external debt by borrower, trend
USD million, May 2025 – May 2026
Borrower share, May 2026
Percent of disbursed outstanding external debt
Disbursed external debt by borrower category (USD million)
Borrower
May-25
Nov-25
Apr-26
May-26p
Share May-26
Central government
27,047.6
29,030.3
29,589.6
29,480.8
81.8%
Private sector
5,851.2
5,645.8
6,519.0
6,558.9
18.2%
Public corporations
3.8
3.8
0.0
0.0
0.0%
Total disbursed external debt
32,902.6
34,679.9
36,108.6
36,039.7
100%
Source: Ministry of Finance and Bank of Tanzania (Table A10, item 3: Disbursed external debt by borrower category). p = provisional data.
Section 2
External debt stock by creditor category
Alongside who borrows, it matters just as much who lends. Multilateral institutions — the World Bank's IDA, the African Development Bank and the IMF among them — supply well over half of Tanzania's external financing, offering longer maturities and softer terms than commercial markets. Commercial lenders are the second-largest source, at over a third of the portfolio, while bilateral and export-credit lines play a comparatively small role.
External debt stock by creditor category
USD million — May-25, Apr-26 and May-26 compared
Creditor share, May 2026
Percent of total external debt stock (incl. interest arrears)
External debt stock by creditor category (USD million)
Creditor
May-25
Share
Apr-26r
Share
May-26p
Share
Multilateral
19,007.7
56.6%
20,950.1
57.4%
20,946.3
57.5%
o/w Disbursed outstanding debt (DOD)
18,973.9
—
20,926.4
—
20,922.6
—
o/w Interest arrears
33.8
—
23.8
—
23.7
—
Commercial
12,086.2
36.0%
13,319.0
36.5%
13,279.7
36.4%
o/w Interest arrears
392.6
—
269.4
—
277.8
—
Bilateral
1,426.0
4.2%
1,561.5
4.3%
1,558.5
4.3%
Export credit
1,066.2
3.2%
675.6
1.9%
662.3
1.8%
Total external debt stock
33,586.1
100%
36,506.1
100%
36,446.8
100%
Source: Ministry of Finance and Bank of Tanzania (Tables 2.6.1 & 2.6.2). r = revised data; p = provisional data.
Concessionality check: With multilateral and bilateral creditors together holding 61.8 percent of external debt, Tanzania's external portfolio still leans concessional — a supportive factor for debt sustainability compared with peers more reliant on commercial Eurobond-style financing. Commercial creditors, however, carry the largest share of interest arrears (see arrears section below).
Section 3
Disbursed outstanding debt by use of funds
Just over 43 percent of Tanzania's disbursed external debt has gone into balance-of-payments/budget support and transport & telecommunication infrastructure — the two largest single uses. Social welfare and education absorbs a further 19.0 percent, and energy & mining 13.1 percent, reflecting the government's continued emphasis on human capital and infrastructure-led growth.
Use of funds, percentage share — May 2026
Percent of disbursed outstanding external debt
Use of funds, absolute value trend
USD million — top four uses, May-25 vs May-26
Disbursed outstanding debt by use of funds — percentage share & USD value
Activity
May-25 (%)
Apr-26 (%)
May-26p (%)
USD million, May-26
BoP & budget support
20.7
21.9
21.8
7,873.7
Transport & telecommunication
21.6
21.8
21.8
7,864.3
Social welfare & education
20.4
18.9
19.0
6,849.5
Energy & mining
12.9
13.1
13.1
4,718.3
Real estate & construction
4.6
5.1
4.9
1,751.4
Agriculture
5.1
5.1
5.3
1,902.6
Finance & insurance
4.2
4.3
4.3
1,545.5
Industries
3.6
3.7
3.7
1,320.2
Tourism
1.8
1.7
1.7
617.7
Other
5.2
4.4
4.4
1,596.7
Total
100.0
100.0
100.0
36,039.7
Source: Ministry of Finance and Bank of Tanzania (Table 2.6.3 & Table A10 item 5). p = provisional data.
Section 4
Disbursed outstanding debt by currency composition
The US dollar remains the anchor currency of Tanzania's external debt at 62.9 percent, though its share has slipped from 66.6 percent a year earlier. The Euro (15.6%) and Chinese Yuan (5.8%) make up the next largest exposures, while "other currencies" — including Special Drawing Rights and smaller bilateral-loan currencies — have nearly doubled their share, from 9.7 to 15.6 percent, pointing to gradual currency diversification in Tanzania's financing mix.
Currency composition, percentage share — May 2026
Percent of disbursed outstanding external debt
Currency composition, 12-month trend
USD million equivalent, May-25 to May-26
Disbursed outstanding debt by currency composition (% share)
Currency
May-25
Apr-26r
May-26p
Change (pp, YoY)
United States Dollar
66.6
63.0
62.9
-3.7
Euro
17.3
15.8
15.6
-1.7
Chinese Yuan
6.4
5.8
5.8
-0.6
Other currencies
9.7
15.4
15.6
+5.9
Total
100.0
100.0
100.0
—
Source: Ministry of Finance and Bank of Tanzania (Table 2.6.4 & Table A10 item 4). r = revised data; p = provisional data.
FX risk lens: A weaker US-dollar concentration is generally positive for currency-risk diversification, but the near-doubling of "other currencies" is worth monitoring closely — TICGL recommends investors and policymakers request a currency-level breakdown from the Ministry of Finance to confirm which specific currencies are driving this shift.
Section 5
Disbursements, debt service & arrears
New disbursements slowed to USD 125.9 million in May 2026 — mostly to central government — against USD 189.4 million in debt service (USD 140 million principal, USD 49.4 million interest). Net flows on external debt were negative for the month, consistent with the small decline in the overall stock. Total external debt arrears stood at USD 1,891.0 million, with commercial creditors accounting for the lion's share.
Disbursements vs. debt service
USD million, monthly, May 2025 – May 2026
External debt arrears by creditor — May 2026
USD million, principal vs. interest
External debt arrears by creditor category, May 2026 (USD million)
Creditor
Principal
Interest
Total
Share of total arrears
Commercial
1,175.7
277.8
1,453.5
76.9%
Bilateral
198.0
80.6
278.6
14.7%
Export credits
105.3
25.2
130.5
6.9%
Multilateral
4.9
23.7
28.6
1.5%
Total external debt arrears
1,483.9
407.1
1,891.0
100%
Source: Ministry of Finance and Bank of Tanzania (Table A10, items 6, 7 & 10).
TICGL Analysis
What this means for investors and policymakers
1. Concessional tilt supports sustainability
With 61.8% of external debt held by multilateral and bilateral lenders, Tanzania's average borrowing terms remain softer than a commercial-heavy portfolio — a structural cushion for debt-service costs even as global rates stay elevated.
2. Commercial arrears need attention
Commercial creditors hold just 36.4% of the debt stock but 76.9% of total arrears — signalling payment-timing strain specifically on commercial obligations that warrants closer cash-flow and hedging management.
3. Currency diversification is underway
The US-dollar share has fallen nearly 4 percentage points in a year. Combined with a strengthening shilling (+3.02% y/y against the dollar), this modestly eases near-term FX-translation risk on debt service.
TICGL Economic
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Deni la Nje la Tanzania — Mkopaji, Matumizi na Sarafu, Mei 2026
Deni la nje la Tanzania (Serikali na sekta binafsi) lilifikia dola za Marekani milioni 36,446.8 mwishoni mwa Mei 2026, likishuka kidogo kutoka milioni 36,506.1 mwezi Aprili, kwani malipo ya mtaji (dola milioni 140) yalizidi mikopo mipya iliyopokewa (dola milioni 125.9). Asilimia 81.1 ya deni hili ni la Serikali, huku Serikali Kuu ikiwa mkopaji mkubwa zaidi (dola milioni 29,480.8), na sekta binafsi ikiwa na dola milioni 6,558.9.
Kwa upande wa wakopeshaji, taasisi za kimataifa (multilateral) kama Benki ya Dunia na Benki ya Maendeleo Afrika zinashikilia asilimia 57.5 ya deni la nje, zikifuatiwa na wakopeshaji wa kibiashara (asilimia 36.4), wakopeshaji wa nchi kwa nchi (bilateral, asilimia 4.3), na mikopo ya "export credit" (asilimia 1.8). Deni hili limetumika zaidi kwenye misaada ya bajeti na urari wa malipo nje (asilimia 21.8), usafirishaji na mawasiliano (asilimia 21.8), ustawi wa jamii na elimu (asilimia 19.0), na nishati na madini (asilimia 13.1).
Kwa sarafu, dola ya Marekani inaendelea kutawala kwa asilimia 62.9 ya deni la nje, ikiwa imeshuka kutoka asilimia 66.6 mwaka mmoja uliopita, huku sarafu nyingine (zisizo dola, euro au yuan) zikiongezeka kwa kasi kutoka asilimia 9.7 hadi asilimia 15.6 — ikionesha mwelekeo wa kutafuta vyanzo mbalimbali vya fedha. Malimbikizo ya madeni ya nje (arrears) yalifikia dola milioni 1,891.0, ambapo asilimia 76.9 ni ya wakopeshaji wa kibiashara pekee — eneo linalohitaji usimamizi makini wa fedha.
Maana yake: Muundo huu wa deni la nje — unaotawaliwa na wakopeshaji wa masharti nafuu (concessional) — ni jambo jema kwa uwezo wa Tanzania wa kulipa madeni yake, ingawa malimbikizo makubwa kwa wakopeshaji wa kibiashara na ongezeko la sarafu mbalimbali ni maeneo ambayo TICGL/TERI inapendekeza kufuatiliwa kwa karibu.
TICGL Economic Research (TERI) — Zanzibar Economic BriefSource: Bank of Tanzania & Office of the Chief Government Statistician, Zanzibar, June 2026
Tanzania Investment and Consultant Group Ltd · TICGL Economic
Zanzibar's Economy in 2026: Tourism and Cloves Power a Widening Surplus
Zanzibar's external surplus grew 21.2 percent on record tourist arrivals and a clove-export boom, even as inflation climbed to 5.5 percent and the government ran a TZS 175.7 billion fiscal deficit. Here's the full data picture for May 2026.
Zanzibar's headline inflation rose to 5.5 percent in May 2026, from 4.2 percent a year earlier, as food prices (up 9.9% y/y) and fuel-linked transport costs (up 5.1% y/y) outweighed easing pressure elsewhere in the basket. On the fiscal side, the government collected TZS 133.3 billion against a monthly target of TZS 216.0 billion (61.7% achievement), while a TZS 309 billion expenditure programme — nearly 60 percent of it development spending — produced a TZS 175.7 billion deficit financed domestically. The external sector was the standout performer: Zanzibar's current account surplus grew 21.2 percent to USD 864.8 million in the year ending May 2026, powered by a 21 percent jump in tourist arrivals and an extraordinary clove-export boom that lifted goods exports more than twofold.
9.9%
Food inflation, May-26
2.1%
Non-food inflation, May-26
USD 1,639.7m
Exports of goods & services
USD 785.2m
Imports of goods & services
USD 41.5m
Clove export value, 2026
Companion Reading
What's Next for Tanzania's Economy? The Policy Gaps Keeping USD 1 Trillion Out of Reach by 2050
Zanzibar's tourism-and-agriculture-led growth model is a useful case study within TICGL's broader 2050 growth-gap analysis — see what it will take to scale this success nationally.
Zanzibar's headline inflation climbed to 5.5 percent in May 2026, up from 5.0 percent in April and 4.2 percent a year earlier — moving further from the very low readings seen in mid-2025. Food inflation eased slightly from April's 10.1 percent but, at 9.9 percent, remains the dominant driver, while non-food inflation has been trending up as fuel costs pass through into transport (5.1%) and restaurant & accommodation prices (7.4%).
Headline, food & non-food inflation
Percent, year-on-year — the three most recent readings
Inflation by CPI group — May 2026
Annual % change, all 13 basket groups
Zanzibar CPI by group (weight %, annual inflation %)
Group (weight %)
May-25
Apr-26
May-26
Food & non-alcoholic beverages (41.9)
4.5
9.9
9.7
Housing, water, electricity, gas (25.8)
4.7
-0.4
1.2
Transport (9.1)
2.2
2.7
5.1
Furnishings & household maintenance (4.8)
4.0
2.2
2.4
Information & communication (4.2)
2.2
0.0
0.1
Clothing & footwear (6.3)
5.1
1.5
1.6
Restaurants & accommodation (1.4)
0.6
6.8
7.4
Alcoholic beverages & tobacco (0.2)
-0.2
4.4
4.3
Personal care & social protection (1.7)
4.9
1.9
0.8
Education (1.6)
3.8
1.5
0.3
Recreation, sport & culture (1.1)
4.6
2.6
2.6
Health (1.3)
1.5
0.6
0.6
Insurance & financial services (0.5)
0.0
0.0
0.0
Headline (100.0)
4.2
5.0
5.5
Food (40.5)
3.9
10.1
9.9
Non-food (59.5)
4.4
1.1
2.1
Source: Office of the Chief Government Statistician, Zanzibar (Table 3.1.1). Base: July 2022 = 100.
Section 3.2
Government budgetary operations: revenue lags target, deficit widens
Zanzibar's government resource envelope reached TZS 133.3 billion in May 2026 — just 61.7 percent of the monthly target — with domestic revenue of TZS 129.5 billion (69.9% of target) and TZS 3.8 billion in grants. Tax revenue supplied 90.5 percent of domestic revenue, while non-tax collections of TZS 12.4 billion reached only 63 percent of target. Total expenditure of TZS 309 billion — 59.6 percent of it development spending — outpaced resources, producing an overall deficit of TZS 175.7 billion financed through domestic borrowing.
Government resources — May 2026
TZS billion, by revenue source
Government expenditure — May 2026
TZS billion, by spending category
Zanzibar government resources, May 2026 (TZS billion)
Source
2025 Actual
2026 Estimate
2026 Actual
% of target
Tax on imports
26.3
30.8
22.7
73.7%
VAT & excise duties (local)
39.7
64.6
46.6
72.1%
Income tax
21.0
32.7
33.1
101.2%
Other taxes
19.2
37.4
14.7
39.3%
Non-tax revenue
10.2
19.6
12.4
63.3%
Grants
2.5
—
3.8
—
Total resource envelope
—
216.0
133.3
61.7%
Source: Ministry of Finance and Planning, Zanzibar (Chart 3.2.1, Chart 3.2.2). Other taxes include hotel and restaurant levies, tour operator levy, revenue stamps, airport/seaport service charges, road development fund and petroleum levy.
Watch this: Income tax is the only major revenue line ahead of target (101.2%), while imports-linked taxes and other levies fell well short — a pattern consistent with softer trade volumes weighing on collections even as tourism-linked income taxes outperform.
Section 3.3
External sector: a widening surplus built on tourism and trade
Zanzibar's current account surplus grew 21.2 percent to USD 864.8 million in the year ending May 2026, from USD 713.6 million a year earlier. Services exports — dominated by tourism — accounted for 96 percent of total goods-and-services exports, while a clove-export boom pushed goods exports up sharply despite the isles' persistently negative goods-trade balance.
Current account, year ending May
USD million, 2025 vs 2026p
Imports of goods by category
USD million, year ending May — capital imports more than doubled
Zanzibar current account summary (USD million, year ending May)
Item
2025
2026p
% change
Exports of goods
33.4
67.2
+101.2%
Imports of goods (fob)
532.7
660.1
+23.9%
Goods account balance
-499.3
-592.9
+18.7%
Services receipts
1,299.4
1,572.5
+21.0%
Services account balance
1,198.7
1,447.5
+20.8%
Goods & services balance
699.3
854.6
+22.2%
Primary income balance
12.7
8.8
-31.2%
Secondary income balance
1.5
1.5
-3.2%
Current account balance
713.6
864.8
+21.2%
Source: Tanzania Revenue Authority, banks and Bank of Tanzania computations (Table 3.3.1). p = provisional data.
Section 3.3 · Deep Dive
The clove-export boom driving goods exports
Clove export value jumped from just USD 3.3 million in the year ending May 2025 to an estimated USD 41.5 million in the year ending May 2026 — more than twelvefold — as both volumes (up roughly ninefold, to 6.4 thousand tonnes) and unit prices (up 36.2%, to USD 6,515.5 per tonne) rose sharply. Cloves alone now account for 61.7 percent of Zanzibar's total goods exports, overtaking manufactured goods and seaweed as the isles' leading export earner.
Goods exports by category
USD '000, year ending May — 2025 vs 2026p
Clove exports: value, volume & price
Indexed view — year ending May 2025 = 100
Zanzibar exports of goods by category (USD '000, year ending May)
Category
2025
2026p
% change
Cloves (traditional)
3,314.5
41,508.4
+1,152%
Manufactured goods
15,200.6
10,886.2
-28.4%
Other non-traditional exports
10,043.8
12,463.1
+24.1%
Seaweeds
3,438.5
1,632.2
-52.5%
Fish & fish products
1,386.5
752.7
-45.7%
Total goods exports
33,383.9
67,242.7
+101.4%
Source: Tanzania Revenue Authority and Bank of Tanzania computations (Table 3.3.2). p = provisional data.
Diversification watch: While the clove boom is a welcome windfall, seaweed and fish-product exports both fell by more than 45 percent over the same period — a reminder that Zanzibar's non-clove export base still needs strengthening to avoid over-reliance on a single, price-volatile commodity.
TICGL Analysis
What this means for investors and policymakers
1. Tourism remains the anchor
With services making up 96% of Zanzibar's exports and tourist arrivals up 21% y/y, hospitality, transport and ancillary services remain the highest-conviction growth sectors for investors on the isles.
2. Clove windfall needs a strategy
A twelvefold jump in clove export value is a rare opportunity to build price-stabilisation and value-addition capacity (processing, branding) before the current price cycle normalises.
3. Revenue collection needs strengthening
At 61.7% of target, Zanzibar's resource envelope shortfall — especially in import-linked taxes and "other taxes" — points to room for improved compliance and administration to reduce reliance on domestic borrowing.
TICGL Economic
Related TICGL insights & tools
Continue exploring Tanzania's economy — mainland and Zanzibar — with TICGL's research library, live dashboards and researcher programme.
Kiwango cha mfumko wa bei Zanzibar kiliongezeka hadi asilimia 5.5 mwezi Mei 2026, kutoka asilimia 4.2 mwaka mmoja uliopita, kikichangiwa zaidi na kupanda kwa bei za vyakula (asilimia 9.9) na gharama za usafirishaji (asilimia 5.1) kufuatia mtikisiko wa bei za mafuta duniani.
Kwa upande wa bajeti, Serikali ya Mapinduzi Zanzibar ilikusanya rasilimali za jumla ya shilingi bilioni 133.3 mwezi Mei 2026, sawa na asilimia 61.7 tu ya lengo la mwezi huo. Matumizi ya Serikali yalifikia shilingi bilioni 309, ambapo asilimia 59.6 ilielekezwa kwenye miradi ya maendeleo, hali iliyosababisha nakisi ya shilingi bilioni 175.7 iliyogharamiwa kwa mikopo ya ndani.
Upande wa biashara ya nje ndio uliofanya vizuri zaidi — ziada ya urari wa biashara wa nje (current account) iliongezeka kwa asilimia 21.2 hadi dola za Marekani milioni 864.8 kwa mwaka unaoishia Mei 2026, ikichagizwa na ongezeko la watalii kwa asilimia 21 (kufikia watalii 947,169) na ongezeko kubwa la mauzo ya karafuu nje — kutoka dola milioni 3.3 hadi dola milioni 41.5, sawa na ongezeko la zaidi ya mara kumi na mbili.
Maana yake: Utalii unaendelea kuwa nguzo kuu ya uchumi wa Zanzibar, na ongezeko la mauzo ya karafuu ni fursa kubwa ya kuongeza thamani ya mazao hayo. Hata hivyo, TICGL/TERI inashauri Serikali kuimarisha ukusanyaji wa mapato ya ndani ili kupunguza utegemezi wa mikopo katika kugharamia bajeti.
Tanzania External Sector Performance 2026: Current Account, Services Exports & Imports | TICGL
TICGL Economic · External Sector Monitor
Tanzania External Sector Performance: Current Account, Services Exports & Imports
A focused analysis of Tanzania's external sector for the year ending May 2026: the current account balance, services export receipts by category (travel, transport, other services), and services import payments — drawn from the Bank of Tanzania's June 2026 Monthly Economic Review.
📅 Period: Year ending May 2026 (with May 2026 monthly detail)🏢 Source: Tanzania Revenue Authority, Banks & Bank of Tanzania📋 Analysis by TICGL Economic Research
-USD 2,209.5m
Current Account Balance
Year ending May 2026
USD 8,051.5m
Services Receipts
+14.2% year on year
USD 3,370.1m
Services Payments
+8.3% year on year
+USD 4,681.4m
Net Services Surplus
Receipts minus payments
USD 5,538.8m
Gross FX Reserves
4.3 months import cover
Executive Summary
Tanzania's External Sector: The Year Ending May 2026 at a Glance
Tanzania's current account deficit widened to USD 2,209.5 million in the year ending May 2026, from USD 2,090.9 million a year earlier — a 5.7 percent increase — as elevated global freight and commodity prices, linked to the Middle East conflict, pushed import costs up faster than export earnings. The goods account deficit widened 18.8 percent to USD 5,410.6 million, even as goods exports grew a healthy 20.4 percent on the back of record gold receipts.
The bright spot was services trade: Tanzania is a consistent net exporter of services, and that surplus grew further in the year to May 2026. Services receipts rose 14.2 percent to USD 8,051.5 million, led by travel/tourism (USD 4,419.1 million, +9.5%) and transport services (USD 3,146.3 million, +16.0%), the latter reflecting Tanzania's growing role as a regional freight and logistics corridor. Services payments rose a more modest 8.3 percent to USD 3,370.1 million, driven mainly by higher freight payments (+17.9%) tied to the same global shipping cost pressures. The result: a net services surplus of USD 4,681.4 million, which continues to be one of the most important offsets to Tanzania's persistent goods trade deficit.
On the financing side, gross official foreign exchange reserves rose to USD 5,538.8 million, up from USD 5,136.7 million a year earlier, covering 4.3 months of projected imports — supported by strong export receipts (especially gold) and the Bank of Tanzania's continued gold purchase programme.
Must-Read TICGL Analysis
What's Next for Tanzania's Economy? The Policy Gaps Keeping TZS 1 Trillion Out of Reach by 2050
A resilient services sector — tourism and transport in particular — is one of Tanzania's clearest external competitive advantages. TICGL's flagship analysis examines the structural policy gaps that could determine whether this advantage translates into the country's Vision 2050 (Dira 2050) ambitions.
Tanzania's current account records all transactions in goods, services, primary income (investment income, compensation of employees) and secondary income (transfers) between residents and the rest of the world. In the year ending May 2026, the current account balance was a deficit of USD 2,209.5 million, 5.7 percent wider than the USD 2,090.9 million deficit recorded a year earlier.
-USD 2,209.5m
Current Account Balance (Year to May-26)
▼ widened 5.7% y/y
-USD 5,410.6m
Goods Account Balance
▼ deficit widened 18.8% y/y
+USD 4,681.4m
Services Account Balance
▲ surplus widened 18.8% y/y
Chart 1 — Current Account Components, Year Ending May (Millions of USD)
Source: Tanzania Revenue Authority, banks, and Bank of Tanzania calculations. p = provisional
Chart 2 — Current Account Balance: Monthly Snapshot (Millions of USD)
Source: Bank of Tanzania. Monthly figures are more volatile than the annual trend and should be read alongside the year-ending-May comparison above.
Table 1 — Current Account, Year Ending May (Millions of USD)
Item
2024
2025
2026p
% Change
Goods account (net)
-6,058.3
-4,555.6
-5,410.6
18.8
Exports (goods)
7,758.7
9,654.7
11,627.9
20.4
Imports (goods)
13,817.0
14,210.2
17,038.5
19.9
Services account (net)
4,174.6
3,939.6
4,681.4
18.8
Services receipts
6,499.4
7,051.5
8,051.5
14.2
Services payments
2,324.9
3,111.9
3,370.1
8.3
Balance on goods and services
-1,883.7
-615.9
-729.2
18.4
Primary income account (net)
-1,674.0
-2,001.5
-1,830.7
-8.5
Secondary income account (net)
649.7
526.5
350.4
-33.4
Current account balance
-2,907.9
-2,090.9
-2,209.5
5.7
The widening in the goods deficit was driven by import growth (19.9%) modestly outpacing export growth (20.4%) in absolute dollar terms — imports added USD 2,828.3 million over the year while exports added USD 1,973.2 million. Encouragingly, the primary income deficit narrowed 8.5 percent to USD 1,830.7 million, mainly reflecting lower interest payments to non-residents, partially offsetting the wider goods deficit. The secondary income surplus (largely remittances/personal transfers) fell 33.4 percent to USD 350.4 million.
Services receipts — Tanzania's earnings from selling services to non-residents — rose 14.2 percent to USD 8,051.5 million in the year ending May 2026, from USD 7,051.5 million a year earlier. Growth was led by travel and transport, Tanzania's two largest services export categories.
USD 4,419.1m
Travel (Tourism) Receipts
▲ +9.5% y/y
USD 3,146.3m
Transport Receipts
▲ +16.0% y/y
USD 486.1m
Other Services Receipts
▼ -2.3% y/y
Chart 3 — Services Receipts by Category, Year Ending May (Millions of USD)
Source: Banks and Bank of Tanzania computations. Other services include construction, insurance, financial, telecommunication, computer and information, charges for intellectual property, government, personal and other business services.
Chart 4 — Composition of Services Receipts, Year Ending May 2026p
Source: TICGL computations based on Bank of Tanzania data
Table 2 — Services Receipts by Category, Year Ending May (Millions of USD)
Category
2024
2025
2026p
% Change (2025→2026p)
Share of Receipts, 2026p
Travel (Tourism)
3,627.1
4,034.4
4,419.1
+9.5%
54.9%
Transport
2,284.5
2,519.5
3,146.3
+16.0%
39.1%
Other services
587.8
497.7
486.1
-2.3%
6.0%
Total services receipts
6,499.4
7,051.5
8,051.5
+14.2%
100.0%
Travel receipts grew broadly in line with visitor numbers: international tourist arrivals rose 5.9 percent to 2,298,900 in the year ending May 2026, with average spending per visitor also edging higher. Transport receipts — largely freight earnings from goods in transit through Tanzanian ports and corridors to neighbouring landlocked countries — grew faster still at 16.0 percent, underscoring Tanzania's expanding role as a regional trade and logistics hub even as global shipping costs rose. On a monthly basis, total services receipts were broadly flat at USD 647.5 million in May 2026 compared with the same month a year earlier.
Services payments — what Tanzania pays non-residents for services — rose 8.3 percent to USD 3,370.1 million in the year ending May 2026, from USD 3,111.9 million a year earlier. Unlike receipts, payments are dominated by transport (freight) costs rather than travel.
USD 1,691.8m
Transport Payments
▲ +16.8% y/y
USD 976.9m
Other Services Payments
▼ -2.7% y/y
USD 701.3m
Travel Payments
▲ +6.4% y/y
Chart 5 — Services Payments by Category, Year Ending May (Millions of USD)
Source: Banks and Bank of Tanzania computations. Other services include construction, insurance, financial, telecommunication, computer and information, government, personal and other business services.
Chart 6 — Composition of Services Payments, Year Ending May 2026p
Source: TICGL computations based on Bank of Tanzania data
Table 3 — Services Payments by Category, Year Ending May (Millions of USD)
Category
2024
2025
2026p
% Change (2025→2026p)
Share of Payments, 2026p
Transport
1,265.3
1,449.1
1,691.8
+16.8%
50.2%
Other services
679.8
1,003.9
976.9
-2.7%
29.0%
Travel
379.7
658.9
701.3
+6.4%
20.8%
Total services payments
2,324.9
3,111.9
3,370.1
+8.3%
100.0%
The rise in transport payments (freight costs) of 16.8 percent was consistent with — and largely explained by — the elevated goods import bill and higher global shipping costs arising from disruption to Gulf shipping routes and the Strait of Hormuz. On a monthly basis, services payments amounted to USD 278.8 million in May 2026, up from USD 267.0 million in May 2025, again largely reflecting higher freight payments.
Comparing receipts and payments category by category shows exactly where Tanzania's services trade surplus comes from — and where it is most exposed to rising global costs.
Chart 7 — Net Services Balance by Category, Year Ending May 2026p (Millions of USD)
Source: TICGL computations (Services receipts minus services payments), based on Bank of Tanzania data.
Table 4 — Net Services Balance by Category, Year Ending May 2026p (Millions of USD)
Category
Receipts
Payments
Net Balance
Travel (Tourism)
4,419.1
701.3
+3,717.8
Transport
3,146.3
1,691.8
+1,454.5
Other services
486.1
976.9
-490.8
Total services account
8,051.5
3,370.1
+4,681.4
Key insight: Travel (tourism) is by far Tanzania's most profitable services category, generating a net surplus of USD 3,717.8 million — more than 6 times receipts from transport net of its costs. "Other services" (construction, insurance, financial, telecom, IT and business services) is the only category running a net deficit, at -USD 490.8 million, indicating Tanzania remains a net importer of these professional and technical services.
5. Foreign Exchange Reserves: The Financing Context
Despite the wider current account deficit, Tanzania's external buffers strengthened. Gross official foreign exchange reserves rose to USD 5,538.8 million at end-May 2026, from USD 5,136.7 million a year earlier, sufficient to cover 4.3 months of projected imports of goods and services — above the national adequacy threshold. This buildup was underpinned by strong export receipts, particularly gold, and the Bank of Tanzania's continued gold purchase programme, which helped cushion the impact of the wider current account deficit on reserve accumulation.
Katika mwaka unaoishia Mei 2026, nakisi ya urari wa malipo ya kawaida (current account) ya Tanzania iliongezeka hadi Dola za Marekani milioni 2,209.5, kutoka Dola milioni 2,090.9 mwaka uliopita, kutokana na gharama kubwa za uagizaji bidhaa nje ikilinganishwa na kasi ya ukuaji wa mauzo nje.
Hata hivyo, sekta ya huduma iliendelea kuwa nguvu kubwa ya uchumi wa nje: mapato ya huduma (services receipts) yaliongezeka kwa asilimia 14.2 hadi Dola milioni 8,051.5, yakiongozwa na utalii (Dola milioni 4,419.1, ongezeko la asilimia 9.5) na usafirishaji (Dola milioni 3,146.3, ongezeko la asilimia 16.0). Idadi ya watalii wa kimataifa iliongezeka kwa asilimia 5.9 hadi watalii 2,298,900.
Kwa upande wa malipo ya huduma (services payments), Tanzania ilitumia Dola milioni 3,370.1, ongezeko la asilimia 8.3, likichangiwa zaidi na ongezeko la gharama za usafirishaji wa mizigo (freight) kwa asilimia 16.8, kutokana na changamoto za usafirishaji duniani. Kwa ujumla, Tanzania inaendelea kuwa na ziada kubwa katika biashara ya huduma — ziada ya wavu (net surplus) ya Dola milioni 4,681.4 — huku utalii ukiwa chanzo kikuu cha faida hii, na huduma nyingine (kama ujenzi, bima, fedha na TEHAMA) pekee ndizo zenye nakisi.
Akiba ya fedha za kigeni iliongezeka hadi Dola milioni 5,538.8, ikitosha kugharamia uagizaji wa bidhaa na huduma kwa miezi 4.3, ikisaidiwa na mauzo makubwa ya dhahabu nje ya nchi.
Kwa uchambuzi zaidi wa kina kuhusu fursa na changamoto za kisera zinazoathiri ushindani wa nje wa Tanzania, soma makala kamili ya TICGL: What's Next for Tanzania's Economy?
Primary source: Bank of Tanzania, Monthly Economic Review, June 2026 (Section 2.7 — External Sector Performance; Table 2.7.1 Current Account; Table 2.7.3 Services Receipts by Category; Chart 2.7.5 Service Payments), ISSN 0856-6844, www.bot.go.tz, compiled with data from the Tanzania Revenue Authority and commercial banks. Analysis and commentary by TICGL Economic Research. All 2026 figures are provisional (p) and subject to revision. This page covers the current account, services export receipts and services import payments only; goods trade detail, external debt and reserves management are addressed in separate TICGL analyses.
Tanzania Central Government Revenue & Expenditure — April 2026 Budget Analysis | TICGL
TICGL Economic · Public Finance Monitor
Tanzania Central Government Revenue & Expenditure — April 2026
A focused analysis of Tanzania's central government budgetary operations for April 2026: revenue collected by source, expenditure by category, and how actual performance compares against budget targets — drawn from the Bank of Tanzania's June 2026 Monthly Economic Review (cheques-issued basis, Tanzania Mainland).
📅 Reporting month: April 2026🏢 Source: Ministry of Finance & Bank of Tanzania📋 Analysis by TICGL Economic Research
TZS 3,112.0bn
Central Govt Revenue
107.2% of April target
TZS 3,457.2bn
Total Expenditure
83.5% of April target
TZS 2,690.6bn
Tax Revenue
110.2% of target
TZS 760.6bn
Development Expenditure
only 52.5% of target
TZS -214.9bn
Balance Before Grants
vs -1,111.0bn estimated
Executive Summary
Central Government Budgetary Operations: April 2026 at a Glance
Tanzania's central government outperformed its revenue target in April 2026, collecting TZS 3,111.97 billion against a monthly target of TZS 2,902.66 billion — 7.2 percent (TZS 209.3 billion) above target. The overperformance was driven almost entirely by tax revenue, which came in at TZS 2,690.63 billion, 10.2 percent above target, powered by taxes on imports (117.3% of target) and income tax (114.5% of target). Non-tax revenue was the one soft spot, collecting TZS 421.34 billion against a TZS 461.43 billion target — 8.7 percent short.
On the spending side, total central government expenditure of TZS 3,457.22 billion was 16.5 percent below the TZS 4,139.26 billion estimate for the month. Recurrent expenditure (wages, interest, and other recurrent costs) was executed close to plan at TZS 2,696.64 billion, but development expenditure was severely under-executed — only TZS 760.58 billion of a planned TZS 1,448.48 billion was spent (52.5% execution), largely because foreign-financed development projects disbursed just TZS 137.69 billion of a TZS 607.49 billion estimate. The combination of strong revenue collection and restrained (particularly development) spending narrowed the fiscal balance before grants to a deficit of TZS 214.93 billion in April, well inside the TZS 1,110.96 billion deficit that had been projected.
Must-Read TICGL Analysis
What's Next for Tanzania's Economy? The Policy Gaps Keeping TZS 1 Trillion Out of Reach by 2050
Strong tax revenue collection is only half the fiscal story — persistent under-execution of development expenditure, especially foreign-financed projects, is one of the structural issues TICGL examines in its flagship analysis of the policy gaps standing between Tanzania and its Vision 2050 (Dira 2050) ambitions.
Central government revenue reached TZS 3,111.97 billion in April 2026, equivalent to 96.0 percent of total government revenue (which also includes Local Government Authority own-source collections of TZS 130.32 billion) and 7.2 percent above the monthly target. Tax revenue continued to perform strongly, reflecting ongoing improvements in tax administration and compliance.
TZS 3,112.0bn
Central Govt Revenue
▲ 7.2% above target
TZS 2,690.6bn
Tax Revenue
▲ 10.2% above target
TZS 421.3bn
Non-Tax Revenue
▼ 8.7% below target
Chart 1 — Central Government Revenue by Source, April 2026 (Billions of TZS)
Source: Ministry of Finance and Bank of Tanzania computations (Table A2, cheques issued). 2026 actual figures are provisional.
Table 1 — Central Government Revenue by Source, April 2026 (Billions of TZS)
Revenue Source
April 2026 Estimate
April 2026 Actual
Variance
% of Target
Taxes on imports
904.55
1,060.67
+156.12
117.3%
Sales/VAT and excise on local goods
612.06
585.43
-26.63
95.6%
Income taxes
741.58
849.32
+107.74
114.5%
Other taxes
183.03
195.21
+12.18
106.7%
Tax revenue subtotal
2,441.23
2,690.63
+249.40
110.2%
Non-tax revenue
461.43
421.34
-40.09
91.3%
Central government revenue
2,902.66
3,111.97
+209.31
107.2%
LGA own sources
125.65
130.32
+4.67
103.7%
Total revenue (incl. LGAs)
3,028.30
3,242.29
+213.99
107.1%
Key insight: Taxes on imports (TZS 1,060.67bn) was the single largest revenue line in April 2026, overtaking income tax (TZS 849.32bn) — together these two lines contributed nearly 62 percent of central government revenue. VAT/excise on local goods was the only tax category to miss its target.
2. Central Government Revenue — Cumulative FY2025/26 (July 2025–April 2026)
Looking at the ten months to April 2026, central government revenue totalled TZS 33,294.80 billion (actual), ahead of the cumulative estimate of TZS 31,402.19 billion, and tracking toward the full-year budget of TZS 36,857.73 billion.
Chart 2 — Central Government Revenue: Full-Year Budget vs. Cumulative Performance (Billions of TZS)
Source: Ministry of Finance and Bank of Tanzania computations. Cumulative = July 2025–April 2026.
Table 2 — Revenue: Annual Budget vs. Cumulative Outturn, July 2025–April 2026 (Billions of TZS)
Revenue Item
2025/26 Full-Year Budget
Cumulative Estimate
Cumulative Actual
% of Cumulative Target
Taxes on imports
11,562.97
9,603.07
10,271.66
107.0%
Sales/VAT and excise on local goods
7,016.47
5,592.61
5,395.25
96.5%
Income taxes
11,367.88
9,113.54
11,163.31
122.5%
Other taxes
4,887.70
1,931.79
1,897.97
98.3%
Tax revenue
32,176.00
26,241.01
28,728.19
109.5%
Non-tax revenue
4,681.73
5,161.18
4,566.61
88.5%
Central government revenue
36,857.73
31,402.19
33,294.80
106.0%
LGA own sources
1,680.51
1,402.34
1,353.57
96.5%
Total revenue (incl. LGAs)
40,466.13
32,804.53
34,648.37
105.6%
Income tax has been the standout cumulative performer, running 22.5 percent above the ten-month target and already exceeding 98 percent of the full-year budget with two months of the fiscal year remaining — a sign that either economic activity or compliance is significantly outperforming the assumptions used to set the 2025/26 budget. Non-tax revenue and "other taxes" are the two areas trailing target on a cumulative basis.
Total central government expenditure (cheques issued) was TZS 3,457.22 billion in April 2026, against an estimate of TZS 4,139.26 billion — 83.5 percent budget execution. Recurrent expenditure was executed almost exactly to plan, while development expenditure fell well short.
TZS 3,457.2bn
Total Expenditure
▼ 83.5% of target
TZS 2,696.6bn
Recurrent Expenditure
▲ 100.2% of target
TZS 760.6bn
Development Expenditure
▼ only 52.5% of target
Chart 3 — Central Government Expenditure by Category, April 2026 (Billions of TZS)
Source: Ministry of Finance and Bank of Tanzania computations. 2026 actual figures are provisional.
Table 3 — Central Government Expenditure, April 2026 (Billions of TZS)
Expenditure Category
April 2026 Estimate
April 2026 Actual
Variance
% of Target
Wages and salaries
1,100.16
1,134.39
+34.23
103.1%
Interest payments — domestic
311.98
304.24
-7.74
97.5%
Interest payments — foreign
301.80
226.05
-75.75
74.9%
Interest payments subtotal
613.79
530.29
-83.49
86.4%
Other goods, services and transfers
976.84
1,031.96
+55.12
105.6%
Recurrent expenditure
2,690.78
2,696.64
+5.86
100.2%
Development expenditure — local
840.98
622.89
-218.10
74.1%
Development expenditure — foreign
607.49
137.69
-469.80
22.7%
Development expenditure & net lending
1,448.48
760.58
-687.90
52.5%
Total expenditure
4,139.26
3,457.22
-682.04
83.5%
Key insight: Foreign-financed development spending was the weakest link, executing at just 22.7 percent of its April target — a shortfall of TZS 469.8 billion in a single month. Recurrent spending, by contrast, was fully executed, with wages and other recurrent transfers slightly overshooting plan.
4. Central Government Expenditure — Cumulative FY2025/26 (July 2025–April 2026)
Cumulative expenditure for the ten months to April 2026 stood at TZS 38,792.07 billion, against a ten-month estimate of TZS 40,402.96 billion (96.0% execution) and a full-year budget of TZS 48,774.99 billion.
Chart 4 — Expenditure: Full-Year Budget vs. Cumulative Performance (Billions of TZS)
Source: Ministry of Finance and Bank of Tanzania computations. Cumulative = July 2025–April 2026.
Table 4 — Expenditure: Annual Budget vs. Cumulative Outturn, July 2025–April 2026 (Billions of TZS)
Expenditure Item
2025/26 Full-Year Budget
Cumulative Estimate
Cumulative Actual
% of Cumulative Target
Wages and salaries
10,917.47
10,890.00
10,976.94
100.8%
Interest payments (domestic + foreign)
6,493.72
5,600.39
4,679.59
83.6%
Other goods, services and transfers
7,088.61
9,103.63
9,968.60
109.5%
Recurrent expenditure
31,281.26
25,594.01
25,625.13
100.1%
Development expenditure — local
12,117.83
10,066.44
10,193.05
101.3%
Development expenditure — foreign
5,375.90
4,742.51
2,973.90
62.7%
Development expenditure & net lending
17,493.73
14,808.95
13,166.94
88.9%
Total expenditure
48,774.99
40,402.96
38,792.07
96.0%
On a cumulative basis, the shortfall is concentrated in foreign-financed development expenditure, running at just 62.7 percent of its ten-month target — a persistent pattern rather than a one-month event, pointing to structural disbursement delays from external development partners rather than a single-month anomaly. Locally-financed development spending and recurrent expenditure have both tracked at or slightly above plan.
Because revenue outperformed target while expenditure — particularly development spending — under-executed, the fiscal balance before grants improved markedly relative to plan in April 2026: a deficit of TZS 214.93 billion actual, against an estimated deficit of TZS 1,110.96 billion. The same pattern holds cumulatively for the ten months to April 2026.
Chart 5 — Central Government Revenue vs. Expenditure, April 2026 & Cumulative FY2025/26 (Billions of TZS)
Source: TICGL computations based on Ministry of Finance and Bank of Tanzania data (Table A2).
Table 5 — Fiscal Balance Before Grants (Billions of TZS)
Period
Total Revenue (incl. LGAs)
Total Expenditure
Balance Before Grants
April 2026 — Estimate
3,028.30
4,139.26
-1,110.96
April 2026 — Actual
3,242.29
3,457.22
-214.93
Cumulative Jul-25–Apr-26 — Estimate
32,804.53
40,402.96
-7,598.43
Cumulative Jul-25–Apr-26 — Actual
34,648.37
38,792.07
-4,143.71
Full-Year 2025/26 Budget
40,466.13
48,774.99
-8,308.86
The cumulative fiscal balance before grants (-TZS 4,143.71 billion) is currently running at roughly half the size of the estimated ten-month deficit (-TZS 7,598.43 billion) — a combination of stronger-than-budgeted revenue collection and slower-than-planned execution of foreign-financed development projects. This figure excludes grants and cash/other adjustments, which further affect the final overall balance and its financing.
6. Budget Execution Scorecard — April 2026 (% of Monthly Target Achieved)
The chart below ranks each major revenue and expenditure line by how close actual April 2026 performance came to its monthly target (100% = on target).
Chart 6 — Budget Execution Rate by Line Item, April 2026 (% of Target)
Source: TICGL computations based on Ministry of Finance and Bank of Tanzania data. Bars above 100% indicate over-performance (green for revenue, amber caution for expenditure over-runs); bars below 100% indicate under-performance.
Chart 7 — Composition of Central Government Expenditure, April 2026 Actual
Source: TICGL computations based on Table A2 (Ministry of Finance / Bank of Tanzania)
Mwezi Aprili 2026, Serikali Kuu ya Tanzania ilikusanya mapato ya Shilingi bilioni 3,111.97, sawa na asilimia 107.2 ya lengo la mwezi lililokuwa Shilingi bilioni 2,902.66. Ukusanyaji huu mzuri ulichangiwa zaidi na kodi za uagizaji bidhaa nje ya nchi (asilimia 117.3 ya lengo) na kodi ya mapato (asilimia 114.5 ya lengo), huku mapato yasiyo ya kikodi pekee yakishindwa kufikia lengo (asilimia 91.3 tu).
Kwa upande wa matumizi, Serikali ilitumia jumla ya Shilingi bilioni 3,457.22, sawa na asilimia 83.5 tu ya lengo la Shilingi bilioni 4,139.26. Matumizi ya kawaida (mishahara, riba na uendeshaji) yalitekelezwa karibu kikamilifu (asilimia 100.2), lakini matumizi ya maendeleo yalisuasua sana, yakifikia asilimia 52.5 tu ya lengo — hasa kutokana na miradi ya maendeleo inayofadhiliwa na wahisani wa nje kutolewa kwa kiwango cha asilimia 22.7 pekee ya lengo la mwezi huo.
Kwa mtazamo wa miezi kumi (Julai 2025 hadi Aprili 2026), mapato ya Serikali Kuu yalifikia Shilingi bilioni 33,294.80, yakizidi lengo la kipindi hicho, huku matumizi yakiwa Shilingi bilioni 38,792.07, chini kidogo ya lengo. Hali hii ilipunguza pengo la nakisi ya bajeti (kabla ya misaada) hadi Shilingi bilioni 4,143.71, ikilinganishwa na nakisi iliyokadiriwa ya Shilingi bilioni 7,598.43.
Kwa uchambuzi zaidi wa kina kuhusu changamoto za kisera zinazoathiri utekelezaji wa miradi ya maendeleo na malengo ya Dira 2050, soma makala kamili ya TICGL: What's Next for Tanzania's Economy?
Primary source: Bank of Tanzania, Monthly Economic Review, June 2026 (Table A2 — Central Government Operations, Cheques Issued, Tanzania Mainland), ISSN 0856-6844, www.bot.go.tz, using Ministry of Finance data. Analysis and commentary by TICGL Economic Research. All April 2026 and cumulative FY2025/26 actual figures are provisional and subject to revision. This page covers central government revenue and expenditure only; financing (foreign and domestic borrowing), grants, debt, inflation, monetary policy and external sector data are addressed in separate TICGL analyses.
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.
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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.
