Government Domestic Debt in Tanzania 2025 | Complete Analysis & Data - TICGL
Government Domestic Debt in Tanzania
Comprehensive Analysis by Creditor Category | December 2025
📊TICGL Economic Research
📅Updated: February 2026
💰TZS 37.9 Trillion Analysis
Total Domestic Debt Stock
TZS 37.9T
December 2025 | ~USD 15.4 billion
Share of Total Public Debt
30.5%
TZS 124.4T total public debt
Dominant Instrument
81.6%
Treasury Bonds
Currency Risk
0%
100% TZS-denominated
Tanzania Economic Development Context: Focus on Government Domestic Debt
Tanzania's economy continued its robust trajectory in 2025, underscoring a commitment to sustainable development amid global uncertainties. Real GDP growth in mainland Tanzania accelerated to 6.4% in the third quarter of 2025, driven by investments in agriculture, mining, construction, and financial services.
Headline inflation remained contained at 3.6% in December 2025, within the 3-5% national target, supported by stable food supplies and declining global fuel prices. Monetary policy, with the Central Bank Rate at 5.75%, facilitated credit growth to the private sector at 23.5%, bolstering broad money supply (M3) expansion to 25.8%.
The external sector improved, with the current account deficit narrowing to USD 2,015.5 million, fueled by exports of gold and tourism services. Fiscal operations in October 2025 showed revenue at TZS 3,080.2 billion and expenditure at TZS 4,168.6 billion, emphasizing infrastructure and social spending.
6.4%
GDP Growth Q3 2025
3.6%
Inflation Rate
23.5%
Private Credit Growth
6.3%
2026 Growth (IMF Est.)
Overall, these dynamics position Tanzania for 6.3% growth in 2026, per IMF estimates, with debt management central to maintaining fiscal space for development priorities like the FYDP III (2021/22–2025/26).
1
Total Government Domestic Debt Stock
As of December 2025, Tanzania's government domestic debt stock stood at TZS 37,899.0 billion (approximately USD 15.4 billion at TZS 2,452.76 per USD), representing a 1.2% decline from November 2025 but a broader upward trend over the year. This accounts for 30.5% of total public debt (TZS 124.4 trillion overall), with the remainder external. The debt is fully denominated in Tanzanian shillings, eliminating direct foreign exchange risks and enhancing monetary policy effectiveness.
Indicator
Amount / Detail
Total Domestic Debt Stock
TZS 37,899.0 billion
Share of Total Public Debt
30.5%
Dominant Instrument
Treasury Bonds (81.6%)
Debt Currency
Tanzania Shilling (100% TZS)
Domestic Debt Composition by Instrument
Total Public Debt Structure (TZS 124.4 Trillion)
💡 Key Interpretation
The TZS denomination shields the economy from currency volatility, a critical advantage given Tanzania's import dependency and external debt exposure. However, the stock's size—equivalent to approximately 17% of GDP—requires vigilant management to avoid crowding out private investment.
Zero currency risk: 100% shilling-denominated eliminates forex exposure
Monetary policy flexibility: Enhances Bank of Tanzania's control over domestic liquidity
GDP ratio consideration: At 17% of GDP, sustainable but requires monitoring to prevent private sector displacement
2
Government Domestic Debt by Creditor Category
The creditor base is diversified yet institutionally concentrated, with domestic financial entities holding the majority. Commercial banks and pension funds dominate, reflecting strong linkages to the banking sector and long-term savings pools. This structure provides stability but also creates systemic dependencies that require careful monitoring.
Creditor Category
Amount (TZS Billion)
Share (%)
Commercial Banks
10,979.6
29.0%
Pension Funds
10,352.2
27.3%
Bank of Tanzania
6,695.2
17.7%
Insurance Companies
2,006.1
5.3%
Other Institutions & Individuals
7,128.0
18.8%
TOTAL
37,899.0
100.0%
Domestic Debt Distribution by Creditor Category
Creditor Holdings in TZS Billions
🎯 Key Insight: Institutional Concentration
Over 56% of domestic debt is held by commercial banks and pension funds, making them the core financiers of government operations within the domestic market. This concentration has important implications:
Crowding-out Risk: High bank exposure may limit credit availability to private sector
Long-term Stability: Pension fund participation provides stable, predictable demand for government securities
Market Depth: 18.8% retail and other participation indicates growing capital market sophistication
3
Interpretation by Creditor Group
Each creditor category plays a distinct role in the domestic debt ecosystem, with unique characteristics, motivations, and implications for fiscal and financial stability. Understanding these dynamics is crucial for effective debt management policy.
Creditor
Analytical Implication
Commercial Banks 29.0% | TZS 10,979.6B
Strong ties to government borrowing influence banking liquidity and private credit availability. High exposure creates potential for crowding out private sector lending, particularly during periods of increased government borrowing. Banks hold government securities as liquid, low-risk assets for regulatory compliance and liquidity management.
Pension Funds 27.3% | TZS 10,352.2B
Favor long-term Treasury bonds for asset-liability matching, providing stable funding for government operations. These institutional investors seek predictable returns with minimal risk, making government bonds ideal for matching long-term pension obligations. Their participation ensures consistent demand for longer-dated securities.
Bank of Tanzania 17.7% | TZS 6,695.2B
Supports liquidity management via overdrafts and special funds (1.9% share). Central bank holdings reflect monetary policy operations, including open market operations and temporary liquidity support to government. This category includes both policy-driven holdings and operational balances.
Insurance Companies 5.3% | TZS 2,006.1B
Focus on secure, long-term holdings for regulatory compliance and to match insurance policy obligations. Similar to pension funds, insurance companies prioritize capital preservation and stable returns, making government securities a core component of their investment portfolios.
Indicates growing retail participation, deepening capital markets and broadening the investor base. This category includes individual investors, non-bank financial institutions, corporates, and other entities. Rising participation signals increased financial market sophistication and investment diversification opportunities.
Creditor Category Characteristics Matrix
Creditor
Primary Motivation
Typical Maturity Preference
Risk Tolerance
Market Impact
Commercial Banks
Liquidity + Returns
Short to Medium (1-5 years)
Low to Moderate
High - Affects credit supply
Pension Funds
Liability Matching
Long-term (7-15 years)
Very Low
Stabilizing - Predictable demand
Bank of Tanzania
Monetary Policy
Various (policy-driven)
N/A (Policy tool)
Moderate - Liquidity management
Insurance Companies
Capital Preservation
Medium to Long (5-10 years)
Very Low
Low - Stable holdings
Others & Retail
Returns + Diversification
Variable
Low to Moderate
Growing - Market deepening
⚠️ Critical Policy Consideration
The heavy concentration in banks and pension funds (56.3% combined) creates a dual-edged dynamic:
Positive: Provides reliable, institutional funding base with sophisticated risk management
Risk: Creates systemic linkage between sovereign fiscal health and financial sector stability
Crowding Effect: When government borrowing increases, banks may reduce private sector lending to maintain government security holdings
Mitigation: Diversifying the creditor base through retail bond programs and attracting non-traditional investors
4
Concentration and Financial Stability View
Concentration metrics reveal a balanced yet bank-heavy profile, with public institutions (Bank of Tanzania + pension funds) holding 45.0% of total domestic debt. While this diversification supports overall stability, the significant banking sector exposure warrants careful monitoring to prevent systemic risks and credit market distortions.
Indicator
Value (%)
Interpretation
Top Two Creditors' Share
56.3%
High concentration in banks and pension funds creates systemic interdependency
Public Sector Institutions' Share (BoT + Pension Funds)
45.0%
Nearly half held by government-linked entities, reducing market vulnerability
Growing retail base indicates capital market development and financial inclusion
Debt Concentration by Institutional Grouping
Market Concentration Analysis
Concentration Level
Moderate
Diversified but bank-heavy
Top 2 Creditors
56.3%
Banks + Pension Funds
Creditor Categories
5
Distinct investor types
📊 Concentration Analysis Interpretation
Diversification supports stability, but high bank exposure (29.0%) could crowd out private lending if borrowing escalates, as seen in past years where domestic debt rose from 11% to 17% of GDP since FY2019/20.
Historical Trend: Domestic debt has grown from 11% of GDP (FY2019/20) to 17% of GDP (current), indicating rising government reliance on domestic financing
Debt Servicing Burden: Domestic debt servicing reached TZS 488.0 billion in December 2025, consuming approximately 20-25% of revenue
Banking Sector Impact: Commercial banks' 29% exposure means that 1 in 3 shillings in government domestic debt is held by banks, creating potential credit constraints for private borrowers
Stability Buffer: Public sector institutions (45%) provide stable, non-volatile demand, reducing refinancing risk
Domestic Debt as % of GDP: Historical Trend (FY2019/20 - 2025)
5
Policy-Level Assessment
Domestic debt risks are low overall, with sustainability manageable under moderate growth scenarios. Tanzania's domestic debt framework demonstrates fiscal resilience through local currency financing while supporting national development objectives. However, strategic policy adjustments are necessary to optimize the debt structure and mitigate emerging risks.
Dimension
Assessment
Analysis & Implications
Currency Risk
Very Low
100% TZS denomination eliminates foreign exchange exposure. Government can service debt in local currency, reducing vulnerability to external shocks and currency depreciation. This is a critical strength given Tanzania's import dependency.
Refinancing Risk
Moderate
25% of debt in short-term instruments (Treasury Bills) requires regular rollover. While institutional demand is strong, concentrated refinancing periods could create liquidity pressures. Maturity profile management is essential.
Banking Sector Exposure
High
29% bank holdings create potential for crowding out private sector credit. Historical data shows domestic debt peaked at 33.1% bank holdings in FY23/24. Rising government borrowing may constrain private investment financing and economic growth.
Pension Fund Exposure
High but Stable
27.3% pension fund holdings provide stable, long-term financing base. These funds seek low-risk, long-duration assets matching their liability profiles. Provides predictable demand for Treasury bonds with 7-15 year maturities.
Inflation Transmission
Manageable
Inflation subdued at 3.6% (within 3-5% target). Domestic borrowing has not triggered inflationary pressures due to effective monetary policy coordination. Bank of Tanzania's 5.75% policy rate provides adequate control mechanisms.
Risk Assessment Matrix
Debt Service as % of Government Revenue (Projected Trend)
✅ Key Takeaway: Policy Perspective
Tanzania's domestic debt, at TZS 37.9 trillion, bolsters fiscal resilience through local financing and supports development via infrastructure bonds. However, reliance on banks (33.1% in FY23/24 data) risks private sector crowding, with debt service peaking at 34% of revenue in FY24/25 before stabilizing.
To enhance sustainability, policies should focus on:
Deeper capital markets: Launch retail bond programs to broaden investor base beyond institutions
Broader investor participation: Incentivize pension funds, insurance companies, and retail investors through tax advantages and improved market infrastructure
Balanced borrowing strategy: Gradually reduce reliance on banking sector while increasing external concessional financing for development projects
Maturity management: Extend average debt maturity to reduce refinancing risk and smooth debt service obligations
This will sustain 6%+ growth while keeping debt-to-GDP at ~46-50%, per 2025 projections, aligning with plans to increase domestic funding amid external debt concerns.
Strategic Policy Recommendations
📈
Capital Market Development
Establish retail Treasury bond programs with lower minimum investments (TZS 100,000-500,000) to attract individual investors. Improve secondary market liquidity through market-making mechanisms.
🏦
Banking Sector Balance
Monitor and manage banking sector exposure to prevent crowding out. Set prudential guidelines limiting individual bank holdings of government securities to maintain private sector credit flow.
⏱️
Maturity Extension
Increase issuance of longer-dated bonds (10-15 years) to reduce rollover frequency. Target average maturity of 7-8 years to stabilize refinancing risk and debt service profile.
🌍
Financing Mix Optimization
Balance domestic and external borrowing. Pursue concessional external financing for infrastructure while reserving domestic market for budget support and shorter-term needs.
💡
Investor Diversification
Incentivize participation from regional and international investors through regulatory reforms and tax incentives. Explore sukuk (Islamic bonds) to tap into alternative investor bases.
Total domestic debt stock represents 30.5% of total public debt and approximately 17% of GDP, fully denominated in TZS with zero currency risk.
56.3%
Concentration in top two creditors (commercial banks and pension funds) creates systemic linkages requiring careful monitoring to prevent credit market distortions.
Low-Moderate
Overall risk profile with very low currency risk, moderate refinancing risk, and manageable inflation transmission, supporting sustainable fiscal operations.
The Path Forward
Tanzania's domestic debt framework demonstrates strong fiscal resilience through local currency financing while supporting development via infrastructure bonds. To enhance sustainability and prevent crowding out of private sector credit, policymakers should prioritize capital market deepening, broader investor participation, and balanced borrowing strategies.
With projected 6.3% GDP growth in 2026 and debt-to-GDP maintained at 46-50%, Tanzania is well-positioned to achieve FYDP III objectives while managing fiscal risks effectively through prudent debt management and continued economic diversification.
This analysis is based on official government debt statistics as of December 2025, supplemented by macroeconomic indicators from the Bank of Tanzania, Ministry of Finance, and international financial institutions.
Primary Sources: Bank of Tanzania Monthly Economic Reviews, Ministry of Finance Budget Statements
Exchange Rate: TZS 2,452.76 per USD (December 2025)
GDP Estimates: Based on Tanzania National Bureau of Statistics projections
Analysis Framework: TICGL proprietary debt sustainability assessment model
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Published: February 2026 Author: TICGL Economic Research Team Category:TICGL Economic
Last Updated: February 07, 2026 Reading Time: 15 minutes Research ID: TICGL-DD-2025-001
The provided insights from the Bank of Tanzania's Monthly Economic Review (September 2025) on the Financial Markets—specifically the Government Securities Market and Interbank Cash Market (IBCM)—paint a picture of a stable and liquid financial system supporting broader economic expansion. When viewed alongside the broader context in the attached document (e.g., Q3 2025 GDP growth estimated above 6%, headline inflation at a low 3.4%, and 21% y-o-y growth in broad money supply M3), these developments signal positive momentum in Tanzania's economic development. They reflect effective monetary policy transmission, investor confidence, and fiscal resilience amid global headwinds like trade uncertainties and moderating commodity prices.
1. Government Securities Market
Treasury Bills (T-bills)
In August 2025, the Bank of Tanzania conducted two Treasury bill auctions with a total tender size of TZS 163.6 billion.
The auctions attracted bids worth TZS 409.7 billion, showing high demand.
Out of these, TZS 162.9 billion were successful bids.
The overall weighted average yield (WAY) declined to 6.83%, down from 8.13% in July 2025, reflecting adequate market liquidity.
Treasury Bonds (T-bonds)
Auctions for 15-year and 25-year bonds were also conducted:
15-year bond tender size: TZS 213.1 billion.
25-year bond tender size: TZS 293.7 billion.
These auctions were significantly oversubscribed, highlighting strong investor appetite.
Total bids submitted reached TZS 2,256.4 billion, but only TZS 867.7 billion were accepted.
Weighted average yields fell to:
13.91% (15-year bonds)
14.42% (25-year bonds).
Government Borrowing (Domestic Market)
In total, the Government borrowed TZS 1,644.1 billion from the domestic market in August 2025.
TZS 1,480.7 billion came from Government bonds.
TZS 163.5 billion from Treasury bills.
Domestic debt stood at TZS 37,129.8 billion at the end of August 2025, an increase of 5% from July, driven mainly by issuance of bonds.
2. Interbank Cash Market (IBCM)
The IBCM remained vital in redistributing liquidity among banks.
Turnover:
August 2025: TZS 2,374.5 billion
July 2025: TZS 3,746 billion (higher previous month).
About 60% of transactions were 7-day deals.
Interest Rates:
The average IBCM rate declined to 6.48% in August, down from 7.35% in July 2025, due to adequate liquidity and its alignment with the Central Bank Rate (CBR) of 5.75%.
By maturity category (August 2025):
Overnight: 6.15%
2–7 days: 6.52%
8–14 days: 6.71%
15–30 days: 6.87%
31–60 days: 6.90%
91–180 days: 7.00%
Financial Market Key Figures – Tanzania (August 2025)
Indicator
Figure
Treasury Bills
Tender Size
TZS 163.6 billion
Bids Submitted
TZS 409.7 billion
Successful Bids
TZS 162.9 billion
Weighted Average Yield
6.83%
Treasury Bonds
15-Year Bond Tender Size
TZS 213.1 billion
25-Year Bond Tender Size
TZS 293.7 billion
Total Bids Submitted (All Bonds)
TZS 2,256.4 billion
Accepted Bids
TZS 867.7 billion
15-Year Bond Yield
13.91%
25-Year Bond Yield
14.42%
Government Borrowing – Domestic
Total Borrowed
TZS 1,644.1 billion
– of which Bonds
TZS 1,480.7 billion
– of which Treasury Bills
TZS 163.5 billion
Domestic Debt Stock (End of Aug 2025)
TZS 37,129.8 billion
Interbank Cash Market (IBCM)
Turnover – July 2025
TZS 3,746.0 billion
Turnover – Aug 2025
TZS 2,374.5 billion
Average Interest Rate – July 2025
7.35%
Average Interest Rate – Aug 2025
6.48%
Implications for Tanzania's Economic Development
1. Government Securities Market: Signs of Fiscal Confidence and Lower Borrowing Costs
Key Observations Recap: Auctions for Treasury bills (T-bills) and bonds were oversubscribed (e.g., T-bill bids at TZS 409.7 billion vs. TZS 163.6 billion tender; bond bids at TZS 2,256.4 billion vs. TZS 506.8 billion tender), leading to declining weighted average yields (T-bills: 6.83% from 8.13%; 15-year bonds: 13.91%; 25-year bonds: 14.42%). Total domestic borrowing hit TZS 1,644.1 billion, pushing domestic debt to TZS 37,129.8 billion (up 5% m-o-m).
Implications for Economic Development:
Enhanced Fiscal Space and Infrastructure Investment: Lower yields indicate abundant liquidity and strong domestic investor appetite (e.g., from banks and pension funds), reducing the government's cost of funding. This aligns with the document's note on rising credit to construction (14.8% y-o-y growth) and mining (3.2%), enabling more public spending on infrastructure like the Standard Gauge Railway expansions or Bagamoyo Port upgrades. The World Bank’s 2025 Tanzania Economic Update emphasizes that cheaper domestic borrowing could free up 1-2% of GDP for capital projects, supporting the 6%+ growth trajectory.
Investor Confidence and Financial Deepening: Oversubscription (over 4x for bonds) signals trust in Tanzania's macroeconomic stability, bolstered by low inflation (within 3-5% target) and exchange rate steadiness. This could attract more foreign portfolio investment, as seen in recent inflows to East African bonds. However, the 5% debt stock rise warrants monitoring; IMF projections for 2025 peg public debt at ~45% of GDP (sustainable under 55% threshold), but sustained issuance could crowd out private credit if not balanced.
Risks: If global oil prices (noted as moderating in the document) rebound, energy import costs could pressure fiscal balances, potentially reversing yield declines.
Indicator
August 2025 Value
Implication for Development
T-bill Oversubscription Ratio
~2.5x (bids/tender)
High liquidity supports private sector lending (16.2% credit growth).
Bond Yield Decline
-1.3 to -1.5 ppts m-o-m
Lowers govt. interest payments by ~TZS 200-300 bn annually, aiding deficit financing at 4.5% of GDP.
Domestic Debt Stock
TZS 37,129.8 bn (+5%)
Enables growth funding but risks higher debt service (projected at 20% of revenues).
Key Observations Recap: Turnover dipped to TZS 2,374.5 billion (from TZS 3,746 billion in July), but average rates fell to 6.48% (from 7.35%), aligning closely with the CBR of 5.75%. Shorter maturities (e.g., overnight at 6.15%) show efficient redistribution, with 60% of deals at 7 days.
Implications for Economic Development:
Monetary Policy Effectiveness and Credit Expansion: The rate convergence to the CBR (lowered in July per the document) demonstrates smooth policy easing, injecting liquidity via reverse repos and full allotments. This fueled 21% M3 growth and 16.2% private credit expansion, particularly in high-growth sectors like agriculture (30.1% credit rise) and trade (29.2%). As per the African Development Bank's 2025 outlook, such liquidity supports SME financing, critical for Tanzania's 7 million+ micro-enterprises contributing 30% to GDP.
Banking Sector Stability and Financial Inclusion: Lower IBCM rates reduce interbank borrowing costs, encouraging banks to lend more to underserved areas (e.g., rural agriculture). Turnover decline isn't alarming—it's typical post-injection stabilization—and reflects ample reserves (reserve money M0 up 24.5% y-o-y). This ties into the document's emphasis on personal loans (36% of credit) for MSMEs, fostering inclusive growth amid 5.5% unemployment.
Broader Economic Resilience: In a global context of elevated policy uncertainty (Chart 1.1a), Tanzania's liquid IBCM buffers shocks like food price volatility (unprocessed food drove 0.2 ppt inflation rise). Recent Reuters reports (October 2025) note this liquidity helped absorb El Niño impacts on harvests, maintaining food stocks at NFRA.
Maturity
August 2025 Rate
Implication for Development
Overnight
6.15%
Quick liquidity access aids daily trade flows, supporting 29.2% credit growth in commerce.
7-Day (60% of deals)
6.52%
Aligns with CBR, enabling sustained investment in mining/tourism exports (up per document).
These financial market dynamics imply a virtuous cycle for Tanzania's development: ample liquidity lowers costs, boosts credit and investment, and sustains 6%+ growth while keeping inflation anchored. The document's projections (stable inflation, moderate oil prices) reinforce this, with fiscal borrowing financing pro-growth spending without derailing stability. Compared to EAC peers (e.g., Kenya's higher 7-8% yields amid debt concerns), Tanzania's metrics highlight relative strength.
However, watchpoints include managing debt buildup (aim for <50% GDP) and external risks like fertilizer price spikes (elevated per Chart 1.5), which could hit agriculture (28% of GDP). The IMF's October 2025 Regional Economic Outlook praises Tanzania's policy mix but urges digital financial reforms to deepen IBCM participation. If trends hold, expect Q4 2025 growth to exceed estimates, potentially hitting 6.8% annually.
The July 2025 government budgetary operations from the Bank of Tanzania's Monthly Economic Review (September 2025) reveal a robust fiscal start to the fiscal year, with revenues surpassing targets by 3% amid controlled expenditures. This performance—revenues at TZS 2,911.6 billion (103% of target) and expenditures at TZS 4,006.2 billion—results in a monthly deficit of approximately TZS 1,094.6 billion (about 38% of revenues), but aligns with the annual budget's emphasis on growth-oriented spending. In the broader context of the attached document, this supports Q3 2025 GDP growth estimates above 6%, low inflation (3.4%), and export-driven stability (e.g., gold and tourism inflows). As of October 2025, Tanzania's FY 2024/25 closed with 5.6% GDP growth and a narrowing current account deficit to 2.5% of GDP, per IMF assessments, positioning the country for 6% growth in FY 2025/26 through enhanced domestic revenue mobilization and public investments. These trends imply fiscal resilience, enabling infrastructure and social spending to drive inclusive development, though high recurrent costs (59% of outlays) highlight needs for efficiency to sustain debt sustainability (domestic debt at ~35% of GDP).
Drawing from recent analyses, such as the World Bank's emphasis on Vision 2050 for upper-middle-income status by 2050 and the African Development Bank's projection of 6% growth fueled by agriculture and tourism, the data signals a pro-growth fiscal stance. However, global risks like elevated fertilizer prices (Chart 1.5) could pressure import taxes if unmitigated.
1. Central Government Revenue
Total revenue (including LGAs):TZS 2,911.6 billion (103% of target).
Central government revenue:TZS 2,592.7 billion
Tax revenue:TZS 2,345.8 billion
Taxes on imports: TZS 958.8 billion
Income taxes: TZS 795.9 billion
VAT & excise on local goods/services: TZS 446.1 billion
Other taxes: TZS 347.3 billion
Non-tax revenue:TZS 246.8 billion
Local Government Authorities (LGA) own sources:TZS 133.9 billion
Other goods, services & transfers: TZS 607.7 billion
Development expenditure:TZS 1,634.4 billion
Domestically financed: TZS 1,261.2 billion
Foreign financed: TZS 373.2 billion.
Table: Central Government Revenue and Expenditure – July 2025 (TZS Billion)
Category
Amount (TZS Bn)
Revenue (including LGAs)
2,911.6
Central Government Revenue
2,592.7
– Tax Revenue
2,345.8
—— Taxes on Imports
958.8
—— Income Taxes
795.9
—— VAT & Excise (Local Goods/Services)
446.1
—— Other Taxes
347.3
– Non-tax Revenue
246.8
LGA Own Sources
133.9
Expenditure (Total)
4,006.2
Recurrent Expenditure
2,371.8
– Wages & Salaries
900.8
– Interest Payments
378.4
—— Domestic
277.7
—— Foreign
100.8
– Other Goods, Services & Transfers
607.7
Development Expenditure
1,634.4
– Domestic Financing
1,261.2
– Foreign Financing
373.2
Implications for Tanzania's Economic Development
1. Central Government Revenue: Strong Collections Signal Economic Momentum and Tax Efficiency
Key Observations Recap: Total revenues (including LGAs) reached TZS 2,911.6 billion (103% target), driven by tax revenue (TZS 2,345.8 billion, or 90% of central total), with imports (TZS 958.8 billion) and income taxes (TZS 795.9 billion) leading. Non-tax added TZS 246.8 billion, and LGA own sources TZS 133.9 billion.
Implications for Economic Development:
Boost to Fiscal Capacity and Growth Financing: Exceeding targets reflects vibrant trade activity, amplified by TZS appreciation (6.6% in August) and export surges (e.g., gold up 35.5% y-o-y to USD 4.32 billion). This provides buffers for the FY 2025/26 budget's TZS 51.1 trillion target, focusing on agriculture (30% of GDP) and industry to achieve 6% growth. The KPMG Budget Brief notes increased domestic revenue (aiming for 16.5% of GDP) will fund inclusive measures like low-income support, potentially lifting 1-2 million from poverty.
Enhanced Tax Base and Private Sector Vitality: High import and income taxes indicate formalization gains from 16.2% private credit growth (document), supporting MSMEs (36% of credit). IMF's 2025 Article IV praises this for narrowing deficits, fostering FDI in mining and services.
Risks: Reliance on imports (41% of tax revenue) exposes to global shocks; diversification via non-tax (e.g., tourism) is key, as per Deloitte's East Africa Outlook.
Reflects job creation in trade/agriculture, supporting 6% GDP target.
Total Tax Revenue
2,345.8
90%
Builds reserves (USD 6.2 bn), per AfDB, for infrastructure resilience.
2. Central Government Expenditure: Balanced Allocation Prioritizes Development Amid Recurrent Pressures
Key Observations Recap: Total outlays TZS 4,006.2 billion, with recurrent at TZS 2,371.8 billion (59%, including TZS 900.8 billion wages and TZS 378.4 billion interest) and development at TZS 1,634.4 billion (41%, 77% domestically financed).
Implications for Economic Development:
Investment-Led Growth Acceleration: Significant development spending (TZS 1,634.4 billion) aligns with the document's construction credit rise (14.8%), funding projects like hydropower and ports to sustain 6%+ expansion. Domestic financing dominance (TZS 1,261.2 billion) reduces external vulnerability, as highlighted in SECO's 2025 Economic Report, which credits public investments for 5.6% FY 2024/25 growth.
Social Stability and Debt Management: Recurrent focus on wages (23% of total) supports public sector employment (amid 5.5% unemployment), while interest payments (9.4%, 73% domestic) remain sustainable at ~20% of revenues. The Taylor & Francis study on fiscal policy notes this mix drives structural transformation, with transfers (TZS 607.7 billion) aiding vulnerable groups.
Risks: Recurrent dominance risks crowding out (e.g., vs. private credit), per World Bank; foreign financing (TZS 373.2 billion) ties to aid flows, vulnerable to global tightening.
Expenditure Category
July 2025 Amount (TZS Bn)
% of Total
Implication for Development
Wages & Salaries
900.8
22%
Bolsters consumption, contributing to 4.9% goods inflation stability.
Development (Domestic)
1,261.2
31%
Fuels infrastructure, targeting 6% growth per KPMG.
Interest Payments
378.4
9%
Sustainable at 35% GDP debt, enabling fiscal space for reforms.
Overall Summary and Forward Outlook
July's budgetary outcomes imply a fiscally prudent yet expansionary path for Tanzania's development: over-target revenues fund balanced spending, reinforcing 6% growth projections while anchoring inflation. This builds on FY 2024/25's 5.6% performance and supports Vision 2050 goals, with domestic focus mitigating external risks. Compared to EAC peers (e.g., Kenya's wider deficits), Tanzania's metrics highlight strength. Into Q4 2025, sustained export inflows could trim the annual deficit to 4% of GDP (IMF estimate), but reforms for recurrent efficiency—e.g., digital tax systems—will be crucial to unlock 7% medium-term potential.
Tanzania's engagement with the International Monetary Fund (IMF) has grown significantly in 2025, reflecting its strategic reliance on IMF financing. As of July 25, 2025, Tanzania's IMF credit outstanding reached TZS 3.65 trillion (USD 1,335,730,000), a 18.98% increase from TZS 3.07 trillion (USD 1,122,630,000) on June 30, 2025, based on an exchange rate of approximately TZS 2,735 per USD (sourced from recent web data on Tanzania shilling rates). This growth, driven by TZS 0.58 trillion in disbursements with no repayments, positions Tanzania as a key player in East Africa, holding 22.07% of the region's TZS 16.55 trillion in IMF credit. Across Africa, Tanzania ranks 11th out of 54 countries, contributing 1.30% to the continent's TZS 280.87 trillion total IMF credit outstanding. This analysis examines Tanzania’s position relative to East African peers and all African countries, highlighting its financial dynamics and regional significance.
Tanzania's IMF credit outstanding as of June 30, 2025, and July 25, 2025, in Tanzania Shillings (TZS), comparing its position among East African and all African countries. Tanzania’s credit growth reflects active IMF program participation, ranking it 2nd in East Africa and 11th across Africa. Significant disbursements and zero repayments underscore its reliance on IMF support, contributing notably to regional financing dynamics.
East African Countries Analysis
The following East African countries are included in the IMF credit dataset (converted to TZS using TZS 2,735 per USD):
Tanzania: TZS 3.07 trillion → TZS 3.65 trillion
Kenya: TZS 8.27 trillion → TZS 8.27 trillion
Uganda: TZS 2.71 trillion → TZS 2.71 trillion
Rwanda: TZS 1.66 trillion → TZS 1.65 trillion
Burundi: TZS 0.27 trillion → TZS 0.27 trillion
East Africa Totals
Total as of 06/30/2025: TZS 15.98 trillion
Total Disbursements: TZS 0.58 trillion
Total Repayments: TZS 0.01 trillion
Total as of 07/25/2025: TZS 16.55 trillion
Tanzania's East African Position
Metric
Tanzania Amount
East Africa Total
Tanzania's %
Outstanding 06/30/2025
TZS 3.07 trillion
TZS 15.98 trillion
19.21%
Total Disbursements
TZS 0.58 trillion
TZS 0.58 trillion
100.00%
Total Repayments
TZS 0
TZS 0.01 trillion
0.00%
Outstanding 07/25/2025
TZS 3.65 trillion
TZS 16.55 trillion
22.07%
East African Ranking (by 07/25/2025 Outstanding)
Kenya: TZS 8.27 trillion (49.90%)
Tanzania: TZS 3.65 trillion (22.07%)
Uganda: TZS 2.71 trillion (16.40%)
Rwanda: TZS 1.65 trillion (9.96%)
Burundi: TZS 0.27 trillion (1.65%)
All African Countries Analysis
African Countries Total
Total as of 06/30/2025: TZS 278.22 trillion
Total Disbursements: TZS 3.46 trillion
Total Repayments: TZS 0.86 trillion
Total as of 07/25/2025: TZS 280.87 trillion
Tanzania's African Position
Metric
Tanzania Amount
Africa Total
Tanzania's %
Outstanding 06/30/2025
TZS 3.07 trillion
TZS 278.22 trillion
1.10%
Total Disbursements
TZS 0.58 trillion
TZS 3.46 trillion
16.86%
Total Repayments
TZS 0
TZS 0.86 trillion
0.00%
Outstanding 07/25/2025
TZS 3.65 trillion
TZS 280.87 trillion
1.30%
Top 10 African Countries by IMF Credit Outstanding
Argentina: TZS 110.11 trillion (39.18%)
Egypt: TZS 20.30 trillion (7.22%)
Ecuador: TZS 18.19 trillion (6.47%)
Pakistan: TZS 18.28 trillion (6.51%)
Cote d'Ivoire: TZS 8.49 trillion (3.02%)
Kenya: TZS 8.27 trillion (2.94%)
Bangladesh: TZS 7.99 trillion (2.84%)
Angola: TZS 7.44 trillion (2.65%)
Ghana: TZS 7.40 trillion (2.63%)
Congo, DRC: TZS 5.34 trillion (1.90%)
Tanzania ranks 11th with TZS 3.65 trillion (1.30%).
Implications for Tanzania’s Economic Development
Tanzania’s significant increase in IMF credit outstanding, from TZS 3.07 trillion to TZS 3.65 trillion between June 30 and July 25, 2025, signals a robust commitment to leveraging IMF financing to support economic development. The TZS 0.58 trillion in disbursements, representing 100% of East Africa’s IMF inflows during this period, suggests Tanzania is actively channeling these funds into priority areas. According to recent IMF reviews, Tanzania’s Extended Credit Facility (ECF) arrangements focus on fiscal consolidation, infrastructure development, and social programs to enhance economic resilience and reduce poverty. The absence of repayments indicates a strategy to maximize liquidity for ongoing projects, potentially in sectors like energy, transport, and agriculture, which are critical for Tanzania’s Vision 2025 development goals. However, this reliance on IMF credit, while boosting short-term growth, raises concerns about long-term debt sustainability, especially given Tanzania’s modest 1.30% share of Africa’s total IMF credit. Balancing these funds with domestic revenue mobilization and prudent fiscal management will be crucial to ensure sustainable economic progress.
Key Insights
Tanzania's Position
East Africa: Tanzania holds the 2nd position among 5 East African nations, trailing Kenya.
Africa: Tanzania ranks 11th out of 54 African countries, reflecting a modest continental presence.
Growth: A 18.98% increase in outstanding credit (TZS 0.58 trillion) from June 30 to July 25, 2025, highlights active IMF engagement.
Notable Points
Disbursements: Tanzania absorbed the entire TZS 0.58 trillion of East Africa’s IMF disbursements, emphasizing its reliance on new funding.
Repayments: Tanzania made no repayments, unlike Rwanda, which reduced its credit slightly.
Regional vs. Continental Share: Tanzania’s 16.86% share of African disbursements significantly exceeds its 1.30% share of total African credit.
Kenya’s Regional Leadership: Kenya dominates East Africa with TZS 8.27 trillion, nearly 50% of the region’s IMF credit.
Argentina’s Continental Dominance: Argentina’s TZS 110.11 trillion accounts for 39.18% of Africa’s total IMF credit, far surpassing other nations.
Regional Context
East Africa’s Contribution: The region represents 5.89% of Africa’s total IMF credit outstanding (TZS 280.87 trillion) as of July 25, 2025.
Tanzania’s Role: Tanzania’s 22.07% share of East African credit (TZS 16.55 trillion) contrasts with its 1.30% share of African credit, reflecting regional significance.
IMF Program Activity: Tanzania’s credit growth aligns with its Extended Credit Facility (ECF) arrangements, as noted in recent IMF reviews, signaling efforts to address fiscal or developmental challenges.
Conclusion
Tanzania’s IMF credit outstanding grew by 18.98% from TZS 3.07 trillion to TZS 3.65 trillion between June 30 and July 25, 2025, driven by TZS 0.58 trillion in disbursements and no repayments. Ranking 2nd in East Africa and 11th in Africa, Tanzania plays a pivotal regional role while maintaining a modest continental footprint. Its 100% share of East African disbursements underscores active IMF engagement, likely tied to economic stabilization or development goals. Continued monitoring of Tanzania’s IMF activities will be crucial for understanding its fiscal trajectory in East Africa and beyond.
Member
Total IMF Credit Outstanding as of 06/30/2025
Total Disbursements
Total Repayments
Total IMF Credit Outstanding as of 07/25/2025
Afghanistan, Islamic Republic of
366,158,000
0
0
366,158,000
Albania
40,657,506
0
0
40,657,506
Angola
2,750,091,673
0
28,208,333
2,721,883,340
Argentina
40,260,000,000
0
0
40,260,000,000
Armenia, Republic of
89,873,183
0
0
89,873,183
Bangladesh
2,922,634,500
0
0
2,922,634,500
Barbados
491,550,010
0
0
491,550,010
Benin
765,823,950
0
3,183,400
762,640,550
Bosnia and Herzegovina
47,559,375
0
0
47,559,375
Burkina Faso
342,002,000
0
2,253,000
339,749,000
Burundi
100,100,000
0
0
100,100,000
Cabo Verde
72,116,000
4,510,000
0
76,626,000
Cameroon
1,168,860,000
0
23,460,000
1,145,400,000
Central African Republic
236,885,500
0
6,931,600
229,953,900
Chad
454,915,000
0
6,309,000
448,606,000
Colombia
937,500,000
0
0
937,500,000
Comoros
23,447,940
0
0
23,447,940
Congo, Democratic Republic of
1,762,450,000
190,400,000
0
1,952,850,000
Congo, Republic of
353,160,000
0
3,240,000
349,920,000
Costa Rica
1,837,765,000
0
0
1,837,765,000
Cote d'Ivoire
3,104,687,108
0
0
3,104,687,108
Djibouti
31,800,000
0
0
31,800,000
Dominica
10,895,000
0
0
10,895,000
Ecuador
6,211,675,007
438,400,000
0
6,650,075,007
Egypt
7,497,485,852
0
74,623,333
7,422,862,519
El Salvador
172,320,000
0
0
172,320,000
Equatorial Guinea
51,496,501
0
0
51,496,501
Eswatini, The Kingdom of
9,812,500
0
0
9,812,500
Ethiopia
1,415,347,500
191,700,000
13,364,000
1,593,683,500
Gabon
414,512,500
0
0
414,512,500
Gambia, The
129,241,250
0
1,166,250
128,075,000
Georgia
370,416,667
0
0
370,416,667
Ghana
2,448,001,000
267,500,000
8,302,500
2,707,198,500
Grenada
18,600,000
0
200,000
18,400,000
Guinea
323,213,900
0
1,721,300
321,492,600
Guinea-Bissau
51,174,400
4,730,000
587,000
55,317,400
Haiti
173,013,750
0
0
173,013,750
Honduras
511,299,319
0
0
511,299,319
Jamaica
595,590,000
0
0
595,590,000
Jordan
1,530,513,418
0
0
1,530,513,418
Kenya
3,022,009,900
0
0
3,022,009,900
Kosovo
142,072,000
0
0
142,072,000
Kyrgyz Republic
74,422,400
0
0
74,422,400
Lesotho
11,660,000
0
0
11,660,000
Liberia
174,503,200
0
0
174,503,200
Madagascar
695,577,600
77,392,000
9,340,600
763,629,000
Malawi
296,056,000
0
0
296,056,000
Maldives
21,200,000
0
0
21,200,000
Mali
403,827,600
0
5,165,000
398,662,600
Mauritania
296,660,000
36,160,000
0
332,820,000
Moldova, Republic of
733,876,260
0
800,000
733,076,260
Mongolia
71,488,115
0
0
71,488,115
Morocco
937,500,000
0
0
937,500,000
Mozambique
545,280,000
0
0
545,280,000
Myanmar
258,395,000
0
21,533,750
236,861,250
Namibia
95,550,000
0
23,887,500
71,662,500
Nepal
380,165,000
0
0
380,165,000
Nicaragua
64,997,500
0
0
64,997,500
Niger
411,896,500
30,268,000
6,028,000
436,136,500
North Macedonia, Republic of
203,440,000
0
0
203,440,000
Pakistan
6,745,250,006
0
59,666,666
6,685,583,340
Papua New Guinea
725,130,000
0
0
725,130,000
Paraguay
0
146,000,000
0
146,000,000
Rwanda
606,757,500
0
4,005,000
602,752,500
St. Lucia
21,400,000
0
0
21,400,000
St. Vincent and the Grenadines
19,872,450
0
0
19,872,450
Samoa
16,200,000
0
0
16,200,000
Sao Tome & Principe
27,158,013
0
63,433
27,094,580
Senegal
1,003,723,612
0
10,787,500
992,936,112
Serbia, Republic of
949,460,000
0
0
949,460,000
Seychelles
106,579,000
0
272,500
106,306,500
Sierra Leone
325,840,900
0
3,999,500
321,841,400
Solomon Islands
6,989,433
0
0
6,989,433
Somalia
87,000,000
7,500,000
0
94,500,000
South Africa
381,400,000
0
0
381,400,000
South Sudan
246,000,000
0
0
246,000,000
Sri Lanka
1,446,746,184
254,000,000
9,991,166
1,690,755,018
Sudan
991,551,000
0
0
991,551,000
Suriname
430,700,000
0
0
430,700,000
Tajikistan, Republic of
139,200,000
0
0
139,200,000
Tanzania
1,122,630,000
213,100,000
0
1,335,730,000
Togo
292,730,000
44,040,000
2,517,000
334,253,000
Tonga
13,800,000
0
0
13,800,000
Tunisia
526,138,180
0
14,731,866
511,406,314
Uganda
992,750,000
0
0
992,750,000
Ukraine
10,800,391,676
0
0
10,800,391,676
Uzbekistan, Republic of
92,050,000
0
0
92,050,000
Zambia
992,860,000
0
0
992,860,000
Total
118,045,530,338
1,905,700,000
346,339,197
119,604,891,141
Tanzania’s significant reliance on International Monetary Fund (IMF) financing, evidenced by its 16.86% share of African disbursements (TZS 0.58 trillion out of TZS 3.46 trillion) between June 30 and July 25, 2025, underscores its strategic use of IMF resources to support economic development. With IMF credit outstanding rising by 18.98% from TZS 3.07 trillion to TZS 3.65 trillion during this period (based on an exchange rate of approximately TZS 2,735 per USD, sourced from recent web data), Tanzania leverages programs like the Extended Credit Facility (ECF) and Resilience and Sustainability Facility (RSF) to address fiscal and developmental challenges. This analysis explores how this reliance shapes Tanzania’s fiscal policy and economic resilience, drawing on IMF data and broader economic insights.
Key Figures
The table below summarizes Tanzania’s key IMF financing metrics as of July 25, 2025, highlighting its position and economic indicators:
Metric
Value
Notes
IMF Credit Outstanding (07/25/2025)
TZS 3.65 trillion
Increased 18.98% from TZS 3.07 trillion on 06/30/2025
Disbursements (June-July 2025)
TZS 0.58 trillion
16.86% of Africa’s TZS 3.46 trillion; 100% of East Africa’s disbursements
Repayments (June-July 2025)
TZS 0
No repayments made, unlike regional peers like Rwanda
Share of East African Credit
22.07%
TZS 3.65 trillion of region’s TZS 16.55 trillion
Share of African Credit
1.30%
TZS 3.65 trillion of continent’s TZS 280.87 trillion
Real GDP Growth (2025 Projection)
6%
Supported by IMF financing and structural reforms
Inflation Rate (March 2025)
3.3%
Below Bank of Tanzania’s 5% target, aided by IMF-supported stability
Foreign Exchange Reserves
USD 5.7 billion (TZS 15.58 trillion)
Covers 3.8 months of imports as of March 2025
Public Debt (2024)
~50% of GDP
Moderate risk of debt distress, per IMF and World Bank assessments
Tax Revenue (2024)
13% of GDP
Low compared to regional peers, necessitating revenue reforms
Fiscal Policy Impacts
Increased Fiscal Space for Priority Spending
Tanzania’s TZS 0.58 trillion in IMF disbursements provides significant fiscal space to fund priority sectors such as health, education, and infrastructure. The ECF program, with total disbursements reaching approximately TZS 3.42 trillion (USD 1.25 billion) by July 2025, supports social spending while pursuing fiscal consolidation. Recent IMF reviews highlight Tanzania’s efforts to increase funding for health workers, teachers, and social programs, aligning with Vision 2025 goals for poverty reduction and human capital development. For example, a supplementary budget in FY24/25 increased public spending by 0.4% of GDP to clear domestic arrears and enhance education and health initiatives. This financing allows Tanzania to address immediate developmental needs without drastic expenditure cuts or immediate tax hikes.
However, this reliance risks delaying structural fiscal reforms. The temporary pause in fiscal consolidation in FY24/25, as noted by the IMF, reflects a trade-off between short-term spending needs and long-term fiscal discipline. Without sustained efforts to boost domestic revenue (currently at 13% of GDP), Tanzania may face challenges sustaining this level of expenditure once IMF support tapers.
Pressure to Enhance Domestic Revenue Mobilization
Tanzania’s heavy reliance on IMF financing underscores the urgency of strengthening domestic revenue collection to reduce external dependency. The IMF and World Bank note that Tanzania’s tax-to-GDP ratio of 13% in 2024 is below the Sub-Saharan African average of 16%, limiting fiscal autonomy. The ECF includes reforms to expand the tax base, streamline tax policies, and improve revenue administration. For instance, Tanzania is implementing digital tax systems and reducing bureaucratic inefficiencies to boost compliance. The TZS 0.58 trillion disbursement, while critical, may reduce short-term pressure to accelerate these reforms, potentially delaying fiscal self-sufficiency. Strengthening domestic revenue is essential to sustain development gains and reduce reliance on external financing.
Debt Sustainability Concerns
The absence of repayments in July 2025 and the increase in IMF credit to TZS 3.65 trillion raise concerns about long-term debt sustainability. Tanzania’s public debt, at approximately 50% of GDP in 2024, is considered sustainable with a moderate risk of distress, per IMF and World Bank assessments. However, continued reliance on external financing, even if concessional, adds to the debt burden. The IMF’s 2025 Article IV consultation emphasizes resuming fiscal consolidation in FY25/26 to maintain debt sustainability. Risks such as global economic slowdown, commodity price volatility, or reduced donor support could strain Tanzania’s repayment capacity, necessitating prudent fiscal management to balance IMF financing with sustainable debt levels.
Economic Resilience Impacts
1. Support for Macroeconomic Stability
Tanzania’s IMF financing enhances economic resilience by supporting macroeconomic stability. The TZS 0.58 trillion disbursement in July 2025 supports balance of payments stability, easing foreign exchange market pressures and maintaining adequate reserves (USD 5.7 billion, or TZS 15.58 trillion, covering 3.8 months of imports in March 2025). Low inflation (3.3% in March 2025, below the Bank of Tanzania’s 5% target) and projected 6% real GDP growth in 2025 reflect the stabilizing role of IMF funds. These conditions foster investor confidence and support private sector growth, critical for economic resilience.
2. Climate Resilience and Structural Reforms
The RSF, part of Tanzania’s IMF financing, bolsters resilience against climate-related risks, which threaten agriculture and tourism—key economic sectors. The RSF’s USD 55.9 million (TZS 0.15 trillion) disbursed in December 2024 supports reforms for disaster risk management, climate-integrated budgeting, and financial sector supervision for climate risks. Given Tanzania’s vulnerability to floods and droughts, these measures are vital for long-term resilience. Additionally, ECF-supported structural reforms, such as improving the business environment and reducing regulatory barriers, aim to diversify the economy and boost private sector-led growth, further enhancing resilience.
3. Risks from External and Domestic Vulnerabilities
Tanzania’s reliance on IMF financing, with a 16.86% share of African disbursements, exposes it to external and domestic risks. The IMF highlights global risks, including economic slowdown and geoeconomic fragmentation, which could disrupt financing flows. Domestically, the 2025 national elections may delay reforms, as noted in a 2024 IMF working paper, potentially impacting industrial production and increasing borrowing costs. Over-reliance on IMF funds could also strain economic resilience if domestic revenue diversification lags, leaving Tanzania vulnerable to external shocks. Balancing IMF support with domestic reforms is critical to mitigate these risks.
Key Considerations for Tanzania
Strategic Allocation of Funds: The TZS 0.58 trillion disbursement should prioritize high-impact investments in infrastructure, health, and education to maximize economic returns and align with Vision 2025.
Governance and Transparency: ECF reforms emphasize improving public financial management and anti-corruption measures to ensure efficient use of IMF funds and build investor confidence.
Economic Diversification: Reducing reliance on agriculture and tourism through private sector development and ECF-supported regulatory reforms is essential for resilience.
Climate Adaptation: Continued RSF support is crucial to address climate vulnerabilities, protecting key sectors and sustaining economic growth.
Conclusion
Tanzania’s reliance on IMF financing, with a 16.86% share of African disbursements (TZS 0.58 trillion), significantly influences its fiscal policy and economic resilience. The funds provide fiscal space for critical spending, supporting macroeconomic stability and 6% GDP growth in 2025. However, low domestic revenue (13% of GDP) and rising debt (50% of GDP) highlight the need for stronger revenue mobilization and prudent debt management. The ECF and RSF programs enhance resilience through structural and climate-focused reforms, but risks from global uncertainties and domestic policy delays persist. By strategically leveraging IMF financing, advancing governance, and diversifying its economy, Tanzania can strengthen its fiscal policy and build sustainable economic resilience.
