#GovernmentSecuritiesTZ - TICGL | Tanzania Investment and Consultant Group Ltd

Section 1

What Is Tanzania's National Debt?

National debt refers to the total amount of money the government owes to domestic and foreign creditors. It is a critical instrument for financing national development — particularly large-scale infrastructure, social services, and economic transformation initiatives. Tanzania's debt portfolio is managed and reported by the Bank of Tanzania (BoT).

Tanzania's national debt consists of two main components: External debt — borrowed from foreign lenders including multilateral institutions, bilateral partners, and commercial creditors — and Domestic debt — borrowed within Tanzania from local banks, pension funds, and investors through government securities.

Total National Debt (Jan 2026)

USD 51,079.8M

≈ TZS 132.8 Trillion

Monthly Change

+0.1%

From December 2025

Exchange Rate (Applied)

~TZS 2,600

Per 1 USD

Debt Sustainability (PV/GDP)

~40.7%

Threshold: 55%

📋 Tanzania External Debt Overview — January 2026

Indicator	Amount (USD Million)	Approx. TZS Trillion	Status
Total External Debt Committed	40,781.1	106.0	Committed
Disbursed Outstanding Debt (DOD)	35,750.7	93.0	Active / In Use
Undisbursed Debt	5,554.4	14.4	Pipeline
Total National Debt	51,079.8	132.8	Combined

🔎 Key Interpretation

Disbursed debt represents loans already received and actively deployed by the government. Undisbursed debt refers to loans that have been committed by lenders but not yet released — these are funds in the pipeline for future projects. January 2026 saw new disbursements of USD 122.9 million, primarily to the government, with service payments of USD 98.5 million.

Source: Bank of Tanzania Monthly Economic Review, January 2026. Exchange rate: ~TZS 2,600 per USD.

Tanzania National Debt Composition — January 2026

Distribution of external vs. domestic debt (% share of total)

External Debt: 70%

USD 35,750.7M (DOD) — owed to multilateral, bilateral, and commercial creditors abroad.

Domestic Debt: 30%

~USD 15,329.4M (TZS 38.6T) — held by commercial banks, pension funds, and other local investors.

Source: Bank of Tanzania, January 2026 Report.

Section 2

External Debt Stock by Creditor Category

Tanzania's external debt is owed to a range of creditors: multilateral development institutions, bilateral government partners, international commercial lenders, and export credit agencies. This creditor mix shapes the cost, risk, and repayment structure of the country's debt.

🌎 External Debt by Creditor — January 2026 (DOD)

Creditor Category	USD Million	Share (%)	Approx. TZS Trillion	Risk Profile
Multilateral Institutions World Bank, AfDB, IMF	20,803.5	58.2%	54.1	Low
Commercial Creditors Private / Market Lenders	12,702.7	35.5%	33.0	Medium–High
Bilateral Creditors Government-to-Government	1,526.9	4.3%	4.0	Medium
Export Credit Agencies	717.6	2.0%	1.9	Low–Medium
Total External DOD	35,750.7	100%	93.0	—

Source: Bank of Tanzania, January 2026 External Debt Report.

Creditor Breakdown — External Debt (USD Million)

Bar chart showing absolute debt held by each creditor category

📈 Share of External Debt by Creditor Type

Multilateral Institutions (World Bank, AfDB, IMF)58.2%

Commercial Creditors35.5%

Bilateral Creditors4.3%

Export Credit Agencies2.0%

🌟 Why Multilateral Dominance Matters

Multilateral loans (58.2% of external debt) from the World Bank, African Development Bank, and IMF typically carry longer repayment periods and lower interest rates than commercial borrowing. This structure provides Tanzania with a more stable debt foundation compared to markets that rely heavily on commercial creditors. However, the 35.5% commercial share is a factor requiring active monitoring.

Use of External Debt Funds

The disbursed external debt funds various sectors of Tanzania's economy:

External Debt Allocation by Sector (% of DOD)

Key sectors financed by Tanzania's external borrowing

Sector	Share of DOD (%)	Key Projects
Balance of Payments / Budget Support	22.7%	General budget financing
Transport & Telecommunications	21.8%	SGR, Roads, Airports, Port Expansion
Social Sectors / Education	19.4%	Schools, Health, Water
Energy & Mining	11.9%	Hydropower, Julius Nyerere Dam
Other Sectors	24.2%	Agriculture, Industry, Finance
Total	100%	—

Source: Bank of Tanzania sector allocation data, January 2026.

Section 3

Domestic Debt Overview

Domestic debt refers to government borrowing from local financial institutions and investors within Tanzania. The government raises domestic debt primarily through Treasury Bills (T-Bills), Treasury Bonds, and other government securities — auctioned by the Bank of Tanzania on behalf of the Ministry of Finance.

As of January 2026, domestic debt grew to TZS 38,599.6 billion — a 1.9% monthly increase, primarily driven by new government securities issuances. The securities market remains robust, with bond auctions oversubscribed by as much as 34% for 10-year bonds at a yield of 11.30%.

Total Domestic Debt

TZS 38,599.6B

January 2026

Monthly Growth

+1.9%

From Dec 2025

Securities Issued (Jan)

TZS 263.7B

Mobilized in January 2026

10-Year Bond Yield

11.30%

Auction oversubscribed by 34%

🏠 Government Domestic Debt by Holder — January 2026

Creditor / Holder	Amount (TZS Billion)	Share (%)	Role in Economy
Commercial Banks	10,902.5	28.5%	Primary market participants; use bonds for liquidity management
Pension Funds	10,389.5	27.1%	NSSF, PPF — long-term savings matched to long-term bonds
Bank of Tanzania	7,436.0	19.4%	Monetary policy; BoT holds non-securitized debt
Other Investors	7,128.9	18.6%	Corporates, SACCOs, individual retail investors
Insurance Companies	2,005.0	5.2%	Regulatory requirement to hold government securities
Total Domestic Debt	38,599.6	100%	—

Source: Bank of Tanzania Domestic Debt Statistics, January 2026.

Domestic Debt Holders — Distribution

By holder type (TZS Billion)

Domestic Debt by Instrument

Bonds dominate at 80.4% of domestic portfolio

Domestic Debt Instruments

Instrument	Amount (TZS Billion)	Share (%)	Typical Tenor
Treasury Bonds	31,015.1	80.4%	2 – 25 Years
Treasury Bills (T-Bills)	1,821.4	4.7%	91, 182, 364 Days
Non-Securitized Debt	5,763.1	14.9%	Various
Total	38,599.6	100%	—

Source: Bank of Tanzania, January 2026.

✅

Strong Domestic Market Signal: The oversubscription of bond auctions (34% for 10-year bonds) indicates strong investor confidence in Tanzania's government securities. This depth in the domestic market reduces dependence on external borrowing and provides a stable, lower-cost financing channel — a positive indicator for debt management.

Section 4

Trend of Tanzania External Debt (2025–2026)

Tanzania's external debt has followed a generally increasing trajectory over recent years, driven by financing of large-scale national infrastructure projects. However, the January 2026 data reveals that the actual disbursed outstanding debt (DOD) reflects a more measured pace of increase compared to committed debt.

📈 External Debt Trend — 2025 to January 2026

Disbursed Outstanding Debt (DOD) in USD Billion with trend line overlay

🕑 External Debt Historical Data Points

Period	External DOD (USD Billion)	Approx. TZS Trillion	Monthly Change (%)
January 2025	36.6	95.2	Baseline
December 2025	35.3	91.8	▼ −3.6% (YTD to Dec)
January 2026	35.8	93.0	▲ +0.6%

🔎

Note on Committed vs. Disbursed Debt: The committed external debt figure of USD 40,781.1 million (as per the primary BoT document) is higher than the disbursed outstanding debt of USD 35,750.7 million. The difference — USD 5,554.4 million (TZS 14.4 trillion) — represents funds in the pipeline that have been approved but not yet drawn down by Tanzania.

Source: Bank of Tanzania Monthly Reports, January 2025 – January 2026.

Key Drivers of Debt Increase

External borrowing has been primarily directed toward major strategic national investments:

🚃 Transport Infrastructure

The Standard Gauge Railway (SGR) remains the largest single debt-financed project, alongside road construction, airport upgrades, and expansion of the Dar es Salaam Port — collectively representing 21.8% of external debt use.

⚡ Energy & Power

The Julius Nyerere Hydropower Project (2,115 MW) and other energy infrastructure projects account for 11.9% of external debt, supporting Tanzania's goal of affordable energy access and industrial growth.

🏫 Social Sectors

Education, health, and water and sanitation projects represent 19.4% of external debt use, reflecting Tanzania's commitment to human capital development alongside physical infrastructure.

📈 Budget Support

22.7% of disbursed external debt goes toward balance of payments and direct budget support — helping stabilise government finances during periods of fiscal stress or commodity price fluctuations.

Section 5

Composition of Tanzania's Total National Debt

Combining external and domestic debt, Tanzania's total national debt as of January 2026 stands at USD 51,079.8 million (TZS 132.8 trillion). The composition reveals a strong external weighting, which shapes both the country's development financing strategy and its exposure to global financial conditions.

Total National Debt Composition — USD & TZS (January 2026)

Side-by-side comparison of external vs. domestic debt in both currencies

📋 Tanzania National Debt Composition — Full Breakdown

Debt Type	USD Million	TZS Trillion	Share (%)	Primary Holders
External Debt (DOD)	35,750.7	93.0	70.0%	World Bank, AfDB, Commercial Banks
Domestic Debt	~15,329.4	39.9	30.0%	Commercial Banks, Pension Funds, BoT
Total National Debt	51,079.8	132.8	100%	—

Source: Bank of Tanzania, January 2026. Domestic USD figure inferred from TZS 39.9T at ~TZS 2,600/USD.

🌎 External Debt Deep Dive

External debt at USD 35.75 billion represents 70% of the national total. Key characteristics:

Committed: USD 40,781.1M (includes pipeline)
Disbursed: USD 35,750.7M (active)
Largest creditor: Multilateral (58.2%)
Jan 2026 disbursements: +USD 122.9M
Jan 2026 servicing: −USD 98.5M
Net Jan change: +USD 524M (+0.6%)

🏠 Domestic Debt Deep Dive

Domestic debt at TZS 38,599.6 billion (30%) has grown through strong securities issuance:

Treasury Bonds: TZS 31,015.1B (80.4%)
Treasury Bills: TZS 1,821.4B (4.7%)
Non-securitized: TZS 5,763.1B (14.9%)
Monthly growth: +1.9%
Jan servicing: TZS 669.8B
Bonds oversubscribed by 34%

🔎

Structural Observation: While external debt dominates (70%), the growing domestic debt market — backed by oversubscribed bond auctions and strong institutional investor participation — is a positive sign of Tanzania's deepening capital markets. A gradual rebalancing toward domestic sources could reduce FX exposure over time.

Disclaimer: This analysis is compiled by TICGL Research Division based on publicly available Bank of Tanzania data. It is intended for informational and research purposes only. © 2026 Tanzania Investment and Consultant Group Ltd — ticgl.com

Batch 1 of 2 — Sections 1–5. Sections 6–8 (Debt Sustainability, Economic Implications, Summary) will be added in Batch 2.

Section 6

Key Indicators of Debt Sustainability

Debt sustainability assesses whether Tanzania can meet its current and future debt obligations without compromising economic stability or requiring exceptional adjustment measures. The internationally recognised framework — the IMF/World Bank Debt Sustainability Analysis (DSA) — benchmarks Tanzania's debt against key thresholds.

As of January 2026, Tanzania's debt indicators remain within sustainable bounds, though the upward trend in external debt warrants continued fiscal discipline.

PV Debt-to-GDP Ratio

40.7%

Threshold: 55%

✅ Within safe limit

Public Debt-to-GDP

~43%

Threshold: 55%

✅ Moderate & manageable

External Debt Share

70%

Target: <60% preferred

⚠️ Elevated — monitor FX risk

Multilateral Debt Share

58.2%

Higher = more concessional

✅ Favourable terms

Debt Service / Exports

~12%

Threshold: ~25%

⚠️ Rising — needs monitoring

Commercial Debt Share

35.5%

Higher = more market risk

⚠️ Watch global rate movements

📈 Tanzania Debt Sustainability Indicators vs. Thresholds

Actual levels compared to IMF/World Bank benchmark thresholds (% scale)

📋 Debt Sustainability Indicator Summary

Indicator	Tanzania (Jan 2026)	IMF/WB Threshold	Status	Trend
PV Debt-to-GDP	~40.7%	55%	✅ Safe	▲ Rising
Public Debt-to-GDP	~43%	55%	✅ Safe	▲ Rising
External Debt Share of Total	70%	<60% preferred	⚠️ Watch	▬ Stable
Multilateral Debt Share	58.2%	Higher = better	✅ Good	▬ Stable
Commercial Debt Share	35.5%	<30% preferred	⚠️ Elevated	▲ Rising
Debt Service / Exports	~12%	25% threshold	✅ Safe	▲ Rising
Shilling Depreciation (Jan)	0.97%	Mild	⚡ Monitor	▲ Gradual

Source: IMF DSA Framework; Bank of Tanzania January 2026 Report.

🎯 Overall Sustainability Assessment

Tanzania's debt profile remains sustainable — the PV Debt-to-GDP ratio of ~40.7% is well below the 55% IMF threshold, and the strong multilateral creditor composition (58.2%) provides concessional terms. However, the rising commercial debt share (35.5%) and FX exposure from a 70% external debt weighting require active monitoring and prudent fiscal management going forward. A 10% depreciation of the Tanzanian Shilling would add approximately TZS 9 trillion to the effective debt burden.

Debt Servicing — January 2026

Tanzania made the following debt service payments in January 2026:

External Debt Service

USD 98.5M

Principal + interest to foreign creditors

Domestic Debt Service

TZS 669.8B

Redemptions + coupons on government securities

Debt Service vs. New Disbursements — January 2026

Net flow: new borrowings vs. repayments (USD Million equivalent)

Section 7

Economic Implications of Tanzania's National Debt

Tanzania's national debt finances approximately 34% of the FY 2025/26 government budget (total: TZS 49.2 trillion). It underpins the country's Vision 2050 industrialisation agenda and supports a GDP growth target of 6.0–6.3% in 2026. The securities market plays an increasingly important role in managing debt risks and mobilising domestic savings.

✅ Positive Impacts

Finances SGR, roads, hydropower — adding 1.0–1.5% to GDP annually
Infrastructure drives FDI target of USD 15 billion
Projects created 160,000 jobs in 2025
Supports GDP growth of 6.5–6.9% in medium term
Strong securities market mobilised TZS 263.7B in January alone
Low domestic yields (11.30%) reduce borrowing costs
Debt/GDP at 43% enables continued credit access
Inflation remains contained at 3.2%
Projects target poverty below 20% by 2030

⚠️ Risks & Challenges

External service of USD 98.5M/month strains budget
Servicing diverts ~6.5% of government budget
10% Shilling drop adds ~TZS 9 trillion to debt cost
Commercial debt (35.5%) exposed to global rate spikes
Crowding-out risk may slow SME credit growth
External dominance (70%) creates FX vulnerability
Poverty reduction could be delayed if servicing escalates
Global shocks could trigger debt overhang deterring investment
Mild Shilling depreciation of 0.97% in January — upside risk

📈 National Debt Budget Allocation — FY 2025/26

How debt-financed spending is distributed across priority sectors (estimated % share)

📋 Economic Implications Matrix — Detailed Analysis

Implication Category	Positive Impact on Growth	Potential Risks	Link to Securities Market
Financing & Investment	Debt funds infrastructure (transport 21.8%), driving FDI (USD 15B target) and mining / agriculture growth.	Servicing USD 98.5M monthly strains budget, risking poverty reduction delays.	Oversubscription (34%) mobilises TZS 263.7B, lowering borrowing costs for development bonds.
Sustainability	Debt/GDP ~43% sustainable, enabling 6.5–6.9% medium-term GDP growth trajectory.	External debt rise (+0.6% Jan) exposes to Shilling depreciation, increasing costs ~TZS 9T per 10% drop.	Domestic focus (80.4% bonds) deepens market, attracting banks and pension funds (combined 55.6%).
Macro Resilience	Multilateral terms (58.2%) support stability — inflation at 3.2%, credit growth at 23.5%.	Commercial debt (35.5%) creates risk if global interest rates spike, slowing diversification.	Bond yields benchmark private sector rates, enhancing financial inclusion for SMEs and households.
Inclusive Growth	Infrastructure projects created 160,000 jobs in 2025; target unemployment below 13.4% and poverty below 20% by 2030.	Debt overhang could deter private investment amid global shocks, widening inequality gaps.	Securities market recycles domestic savings into growth projects, projecting resilient 6.3% GDP in 2026.

Source: Bank of Tanzania; Ministry of Finance FY2025/26 Budget; TICGL Research synthesis.

📈 Tanzania GDP Growth Rate — Actual & Projected (2022–2027)

Debt-financed infrastructure contributing to sustained growth above 6%

Section 8

Summary of Tanzania National Debt — January 2026

The following table consolidates all key national debt indicators from the Bank of Tanzania's January 2026 data, providing a single reference snapshot of Tanzania's debt position.

Indicator	Value	Currency / Unit	Notes
Total National Debt	USD 51,079.8M	TZS 132.8 Trillion	External + Domestic combined
Total External Debt (Committed)	USD 40,781.1M	TZS 106.0 Trillion	Includes undisbursed pipeline
Disbursed Outstanding Debt (DOD)	USD 35,750.7M	TZS 93.0 Trillion	Active / deployed debt
Undisbursed External Debt	USD 5,554.4M	TZS 14.4 Trillion	Committed but not yet drawn
Domestic Debt	~USD 15,329.4M	TZS 38,599.6 Billion	Up 1.9% month-on-month
External Debt Share	70.0%	% of Total	Down from 77% (attached doc baseline)
Domestic Debt Share	30.0%	% of Total	Growing via bond issuances
Largest External Creditor	Multilateral Institutions	USD 20,803.5M (58.2%)	World Bank, AfDB, IMF
Commercial Creditors	USD 12,702.7M	35.5% of external	Market-rate borrowing; highest risk tier
Bilateral Creditors	USD 1,526.9M	4.3% of external	Government-to-government loans
Export Credit Agencies	USD 717.6M	2.0% of external	Trade-linked financing
Domestic Debt — Treasury Bonds	TZS 31,015.1B	80.4% of domestic	Dominant instrument; 2–25 year tenors
Domestic Debt — T-Bills	TZS 1,821.4B	4.7% of domestic	91, 182, 364-day instruments
Largest Domestic Holder	Commercial Banks	TZS 10,902.5B (28.5%)	Followed by Pension Funds 27.1%
Public Debt-to-GDP	~43%	% of GDP	Below 55% IMF threshold
PV Debt-to-GDP (DSA)	~40.7%	% of GDP	Safe — threshold is 55%
External Debt Service (Jan 2026)	USD 98.5M	Monthly	Principal + interest payments
Domestic Debt Service (Jan 2026)	TZS 669.8B	Monthly	Redemptions + coupon payments
New External Disbursements (Jan)	USD 122.9M	Monthly inflow	Mostly to central government
Securities Mobilised (Jan 2026)	TZS 263.7B	Monthly	10-year bonds oversubscribed by 34%
Exchange Rate Applied	~TZS 2,600/USD	Conversion basis	Shilling depreciated 0.97% in January
GDP Growth Target (2026)	6.0 – 6.3%	% annual	Supported by debt-financed infrastructure

Source: Bank of Tanzania Monthly Economic Review, January 2026; Ministry of Finance; TICGL Research Division.

📈 Tanzania Debt Structure at a Glance — January 2026

All major debt components visualised on a single stacked chart (TZS Trillion)

✅ Conclusion

Data from the Bank of Tanzania report confirms that Tanzania's national debt has grown steadily, reaching USD 51,079.8 million (TZS 132.8 trillion) as of January 2026 — primarily driven by large-scale investments in infrastructure and economic transformation under Vision 2050.

Key features of Tanzania's debt profile include:

External debt dominates at 70% — reflecting reliance on foreign financing for major projects such as the SGR, Julius Nyerere Hydropower, and port expansion.
Multilateral lenders are the largest creditors (58.2%) — providing concessional terms that support long-term sustainability.
Domestic debt is growing rapidly — driven by oversubscribed bond auctions, with TZS 263.7 billion mobilised in January 2026 alone.
Debt remains sustainable — PV Debt-to-GDP at ~40.7% is comfortably below the 55% IMF threshold.
FX risk is real but contained — mild Shilling depreciation (0.97% in January) and careful monetary policy support stability.
Growth trajectory is positive — debt-financed infrastructure supports a 6.0–6.3% GDP growth target for 2026, with medium-term potential of 6.5–6.9%.

Despite the growth in public debt, Tanzania continues to maintain moderate and sustainable debt levels relative to GDP. The deepening domestic securities market — evidenced by oversubscribed auctions and growing institutional investor participation — positions Tanzania for increasingly self-reliant development financing. Prudent fiscal management, however, remains essential to preserving this trajectory.

Overview of Tanzania's Domestic Debt

Tanzania's domestic debt stock reached TZS 38,599.6 billion at the end of January 2026, up 1.9% from TZS 37,899.0 billion in December 2025 — reflecting a long-term upward trend driven by increased issuance of government securities to finance budget deficits and development projects.

This growth has nearly tripled since 2018 (TZS 13,618.8 billion), highlighting the expanding role of the domestic securities market in Tanzania's fiscal operations. The debt is predominantly long-term (80.4% Treasury bonds), with major holders being commercial banks (28.5–29%) and pension funds (27.1–27.3%), together holding over 55% — indicating strong institutional participation.

Government securities auctions have shown strong investor confidence, with oversubscribed results — for example, a 34% oversubscription rate for 10-year bonds at 11.30% yield in January — enabling low-cost borrowing. In January 2026 alone, the government mobilised TZS 263.7 billion via securities issuances.

Macroeconomic Context: Domestic debt growth aligns with stable macroeconomic conditions — 3.2% inflation and a 5.75% Central Bank Rate (CBR) — supporting 6.0–6.3% GDP growth projections for 2026, driven by sectors like mining and agriculture.

TZS 38,599.6B

Domestic Debt Stock

As of January 2026; up from TZS 13,618.8B in 2018

+1.9%

Monthly Growth

Dec 2025 → Jan 2026

~17% GDP

Debt-to-GDP Ratio

Domestic share is ~30% of total public debt

TZS 669.8B

Jan 2026 Servicing Cost

Principal + Interest payments in January 2026

Government Domestic Debt by Creditor Category (January 2026)

The table below shows the main institutions that hold government domestic debt as of January 2026. Commercial banks lead as the largest single creditor group, followed closely by pension funds.

Creditor Category	Amount (TZS Billion)	Share (%)	Rank
Commercial Banks	10,979.6	29.0%	#1
Pension Funds	10,352.2	27.3%	#2
Bank of Tanzania	6,695.2	17.7%	#3
Others (Public Institutions, Companies, Individuals)	7,128.0	18.8%	#4
Insurance Companies	2,006.1	5.3%	#5
BOT Special Funds	737.8	1.9%	#6
Total Domestic Debt	37,899.0 – 38,599.6	100%	—

Creditor Category Distribution — January 2026

Share of total domestic debt by creditor type (TZS Billion)

Domestic Debt Held by Creditor — Amount (TZS Billion)

January 2026 — absolute values by creditor category

Year-on-Year Comparison: January 2025 vs January 2026

Comparing January 2025 to January 2026 reveals clear shifts in the creditor landscape. While commercial banks and pension funds both grew in absolute terms, the Bank of Tanzania reduced its holdings by TZS 417.1 billion, reflecting a deliberate shift away from central bank financing.

Creditor Category	Jan 2025 (TZS B)	Share 2025	Jan 2026 (TZS B)	Share 2026	Change (TZS B)	Share Change
Commercial Banks	9,816.6	28.7%	10,979.6	29.0%	+1,163.0	+0.3%
Pension Funds	9,094.6	26.6%	10,352.2	27.3%	+1,257.6	+0.7%
Bank of Tanzania	7,112.3	20.8%	6,695.2	17.7%	−417.1	−3.1%
Insurance Companies	1,872.6	5.5%	2,006.1	5.3%	+133.5	−0.2%
BOT Special Funds	476.1	1.4%	737.8	1.9%	+261.7	+0.5%
Others	5,782.6	16.9%	7,128.0	18.8%	+1,345.4	+1.9%
Total	34,154.9	100%	38,599.6	100%	+4,444.7	—

Year-on-Year Comparison by Creditor (TZS Billion)

January 2025 vs January 2026

Notable Shift: The Bank of Tanzania's share declined from 20.8% to 17.7% (−3.1 percentage points), while "Others" grew from 16.9% to 18.8% (+1.9 pp), indicating broader participation in the government securities market including from individuals and private institutions.

Distribution Among Major Creditor Groups

Two creditor groups — commercial banks and pension funds — together hold an outsized majority of Tanzania's domestic debt. This concentration reflects the investment mandates of these institutions, both of which seek low-risk, interest-bearing assets.

Major Creditor	Amount (TZS Billion)	Share (%)	Combined
Commercial Banks	10,979.6	29.0%	≈ 56%
Pension Funds	10,352.2	27.3%	≈ 56%
Bank of Tanzania	6,695.2	17.7%	—
Others	7,128.0	18.8%	—
Insurance Companies + BOT Special Funds	2,743.9	7.2%	—

Commercial banks and pension funds together hold over half of Tanzania's domestic debt — approximately TZS 21.3 trillion out of TZS 38.6 trillion, demonstrating the critical role of the formal financial sector in government financing.

Role of Each Creditor Category

Each creditor category participates in the government securities market for distinct reasons rooted in their institutional mandates, risk profiles and liquidity requirements. Understanding these roles is key to assessing the stability and depth of Tanzania's domestic debt market.

🏦

Commercial Banks

Largest holders of government securities, primarily investing in short-to-medium term instruments as part of liquidity and capital management strategies.

Treasury Bonds (primary investment)
Treasury Bills (liquidity management)
Low-risk, liquid assets on balance sheet
Regulatory compliance with liquidity ratios

🏛️

Pension Funds

Major long-term investors including NSSF, PSSSF and LAPF — they seek stable returns aligned with long-dated pension liabilities.

Long-term Treasury Bonds (5–25 years)
Stable, predictable coupon income
Asset-liability matching for pension obligations
NSSF, PSSSF, LAPF as key institutions

🏧

Bank of Tanzania (Central Bank)

Holds government debt as part of its monetary policy toolkit and balance sheet management — declining share signals reduced monetisation.

Monetary policy operations
Liquidity management tools
Open market operations (OMO)
Declining share (20.8% → 17.7%): positive signal

🛡️

Insurance Companies

Invest part of their reserves in government securities to meet regulatory requirements and provide predictable returns on policyholder funds.

Government Bonds and Treasury Bills
Stable returns with low default risk
Regulatory reserve requirements
Growing slowly (+TZS 133.5B YoY)

💼

BOT Special Funds

Funds managed by the Bank of Tanzania for specific programs or government financing arrangements — fastest growing category in 2025/26.

Special government financing programs
Managed by Bank of Tanzania
Fastest growth rate (+54.9% YoY)
From TZS 476.1B → TZS 737.8B

🌐

Others (Institutions, Individuals)

A diverse group representing the breadth of Tanzania's securities market participation — the second-fastest growing category by absolute amount.

Public institutions and agencies
Private companies and corporates
Individual retail investors
Non-resident investors (foreign)

Domestic Debt Growth Trend (2018 – January 2026)

Tanzania's domestic debt has grown consistently and substantially over the past eight years, nearly tripling between 2018 and January 2026. This expansion reflects the deliberate policy of relying more on domestic financing and deepening the government securities market.

Year / Period	Domestic Debt Stock (TZS Billion)	Annual / Period Growth (%)	Cumulative Growth since 2018
2018	13,618.8	—	Base Year
2020	14,637.8	+7.5%	+7.5%
2022	21,256.1	+45.2%	+56.1%
2023	26,494.6	+24.6%	+94.5%
2024	31,002.6	+17.0%	+127.6%
2025 (End of Year)	37,899.0	+22.2%	+178.3%
January 2026	38,599.6	+1.9% (from Dec 2025)	+183.4%

Tanzania Domestic Debt Growth Trend (2018–Jan 2026)

Government domestic debt stock in TZS Billion — with trend line

Annual Growth Rate of Domestic Debt (%)

Period-over-period percentage change in total domestic debt stock

Key Insight: The steepest acceleration in domestic debt growth occurred between 2020 and 2022 (+45.2%), driven by post-COVID fiscal expansion and increased government development spending. Growth has remained elevated at 17–22% annually through 2024 and 2025.

Domestic Debt by Instrument (January 2026)

The composition of Tanzania's domestic debt by instrument reveals a clear preference for long-term Government Bonds, which make up over 80% of the total. This structure aligns with Tanzania's development financing needs and reduces refinancing risk.

Instrument	Amount (TZS Billion, Jan 2026)	Share (%)	Characteristics
Government Bonds (Treasury Bonds)	31,015.1	80.4%	Long-term; maturities 2–25 years
Treasury Bills	1,821.4	4.7%	Short-term; 35–364 days
Non-Securitized Debt (incl. Overdraft)	5,627.3	14.6%	Direct financing; not market-based
Government Stocks	135.7	0.4%	Legacy instruments; declining
Total Securities (Bonds + T-Bills + Stocks)	32,972.3	85.4%	Market-traded instruments

Debt Composition by Instrument — January 2026

Share of total domestic debt (TZS 38,599.6 billion)

85.4% of domestic debt is market-based securities (bonds, bills and stocks), indicating a mature securities market. The high share of long-term bonds reduces rollover risk and supports stable debt management.

Domestic Debt Servicing — January 2026

In January 2026, the government serviced a total of TZS 669.8 billion in domestic debt obligations — comprising both principal repayments and interest payments. Interest payments exceeded principal repayments, underscoring the cost of maintaining a large and growing debt stock.

Servicing Item	Amount (TZS Billion)	Share of Total Servicing
Principal Repayment	303.9	45.4%
Interest Payments	365.9	54.6%
Total Domestic Debt Servicing	669.8	100%

Domestic Debt Servicing Breakdown — January 2026

Principal vs Interest payments in TZS Billion

Servicing Risk Watch: Monthly servicing of TZS 669.8 billion represents approximately 6.5% of the government budget. While currently manageable, rising yields or further debt accumulation could put pressure on fiscal resources and potentially crowd out social spending.

Economic Implications for Tanzania's Growth and Development

Tanzania's domestic debt, primarily channelled through the securities market, plays a multifaceted role in the economy — enabling self-reliant financing for growth while also posing risks that require careful management.

Implication Category	Positive Impact on Growth	Potential Risks	Link to Securities Market
Fiscal Financing	Mobilises TZS 263.7B/month for infrastructure; reduces FX risk (domestic = 30% of total debt)	Servicing TZS 669.8B/month diverts from social programs; risks poverty stagnation (~20% target 2030)	Oversubscribed auctions (34%) keep yields low (11.3%); attracts pensions (27.3%)
Financial Deepening	Institutional dominance (55% banks/pensions) deepens markets; boosts savings rate (~12%) for industrialisation	Crowding out if growth exceeds 22% annually, limiting private credit to SMEs (40% GDP contribution)	85.4% securities recycle liquidity; stabilising IBCM rates (6.68%)
Macro Stability	Aligns with 3.2% inflation and 5.75% CBR; enabling 6.5–6.9% medium-term growth	Debt-to-GDP ~17% could rise to 20% if revenue falters; pressuring reserves (USD 6.3B)	Liquidity from auctions supports monetary policy; reducing reverse repos (TZS 976.4B)
Inclusive Development	Funds Vision 2050 (energy/mining); creates jobs (160,000 in 2025); pension investments enhance social security	Inequality if urban-focused; high servicing strains rural agriculture (26% GDP)	Diverse holders (18.8% others) broaden participation; foster market maturity

Key Observations & Conclusion

Key Observations

🏅

Financial Institutions Dominate

Commercial banks and pension funds together hold more than half of domestic debt, reflecting a deep and institutionally anchored securities market in Tanzania.

📈

Steady Debt Growth Supports Fiscal Needs

Domestic borrowing has grown at 17–22% annually since 2022, primarily used to finance government budget deficits and development programs without excessive inflation.

🌱

Increasing Role of Institutional Investors

Pension funds and insurance companies are becoming major long-term investors in government securities, contributing to market stability and depth.

⚖️

Declining Central Bank Monetisation

The Bank of Tanzania's share fell from 20.8% to 17.7%, a positive indicator that government financing is shifting away from central bank money creation.

Conclusion

According to the Bank of Tanzania report, Tanzania's domestic debt structure is characterised by:

Strong dominance of commercial banks and pension funds — together accounting for over 56% of total domestic debt
Heavy reliance on long-term government securities such as Treasury bonds (80.4% of total)
Gradual expansion of domestic borrowing to finance government operations, reaching TZS 38,599.6 billion as of January 2026
Robust market participation, with oversubscribed auctions and growing participation from the "Others" category

Domestic debt therefore plays an important role in supporting fiscal financing while also developing Tanzania's financial markets. Overall, domestic debt's structure via securities promotes resilient, self-financed growth, but balanced management is key to avoid debt overhang. For the most current updates, monitor the Bank of Tanzania monthly economic review.

Bottom Line: Tanzania's domestic debt is structurally sound — dominated by long-term instruments, held by stable institutional investors, and aligned with macroeconomic stability targets. The key policy challenge is to manage the pace of growth to avoid crowding out private sector credit and keep servicing costs sustainable.

Data Sources & Attribution: This analysis is based on the Bank of Tanzania (BoT) Monthly Economic Review, Government Securities Auction Reports, and related fiscal data for January–March 2026. Published by TICGL – Tanzania Investment and Consultant Group Ltd . For updates, monitor www.bot.go.tz.

Extended Analysis — Section 2

Government Securities Market Context

Tanzania's domestic debt is predominantly financed through a well-functioning government securities market. Understanding how auctions are conducted, what instruments are issued and how yields are priced is essential for interpreting the debt structure data.

In January 2026, the government mobilised TZS 263.7 billion through securities issuances. Auction results consistently show oversubscription, with total bids reaching as high as TZS 840 billion against offered amounts — signalling deep investor appetite and ample market liquidity.

January 2026 Auction Highlights

Instrument	Tenor	Yield / Rate	Oversubscription	Implication
10-Year Treasury Bond	10 years	11.30%	+34%	Strong long-term investor demand
Government Securities (aggregate)	Mixed	~11.30% avg	Oversubscribed	TZS 840B bids vs offer
Total Mobilised (Jan 2026)	—	—	✓ Successful	TZS 263.7 billion raised

Investor Confidence Signal: A 34% oversubscription on 10-year bonds at 11.30% yield is a strong vote of confidence. It indicates that Tanzania's securities market offers attractive risk-adjusted returns relative to alternatives, enabling the government to borrow at controlled and predictable costs.

Securities Market Size and Depth

~15% GDP

Securities Market Depth

Market capitalisation relative to GDP — a mark of growing maturity

85.4%

Market-Based Debt

Share of total domestic debt held in tradeable securities

TZS 263.7B

Jan 2026 Mobilisation

New funds raised via government securities in one month

TZS 976.4B

Reverse Repos Reduced

Liquidity management via monetary policy instruments

IBCM Rate and Monetary Policy Link

The Inter-Bank Cash Market (IBCM) rate of 6.68% — well below the 10-year bond yield of 11.30% — reflects the healthy spread between short-term liquidity rates and long-term sovereign yields. This spread incentivises banks and funds to extend duration and hold longer-dated bonds, supporting the government's preference for long-term debt financing.

Key Interest Rates & Yields — January 2026

Comparison of central bank rate, interbank rate and bond yield (% per annum)

Role of Domestic vs External Debt

Tanzania's domestic borrowing constitutes approximately 30% of total public debt, with the remainder being external obligations. This balance reduces currency risk — domestic debt is denominated in Tanzanian shillings (TZS) — while keeping external borrowing sustainable relative to foreign exchange reserves of USD 6.3 billion.

Debt Category	Approx. Share of Total Debt	Currency	Key Risk
Domestic Debt	~30%	TZS (local currency)	Crowding-out of private credit
External Debt	~70%	USD, EUR, CNY, etc.	FX rate and refinancing risk
Total Public Debt	100%	Mixed	Balanced portfolio approach needed

Investor Deep-Dive: Who Holds What and Why

Beyond headline shares, the motivations and behaviours of each major creditor group shape Tanzania's debt market dynamics. This section examines the investment logic, regulatory context and portfolio implications for each major holder.

Portfolio Allocation by Creditor (Visual Overview)

🏦 Commercial Banks29.0% — TZS 10,979.6B
🏛️ Pension Funds (NSSF, PSSSF, LAPF)27.3% — TZS 10,352.2B
🌐 Others (Institutions, Individuals)18.8% — TZS 7,128.0B
🏧 Bank of Tanzania17.7% — TZS 6,695.2B
🛡️ Insurance Companies5.3% — TZS 2,006.1B
💼 BOT Special Funds1.9% — TZS 737.8B

Commercial Banks — Largest Holder

Commercial banks hold TZS 10,979.6 billion (29.0%) of domestic debt, up from TZS 9,816.6 billion a year earlier (+11.8%). Banks allocate capital to government securities for several structural reasons:

Reason for Holding	Instrument Preferred	Regulatory Basis
Statutory Liquidity Reserve (SLR) compliance	Treasury Bills (short-dated)	Bank of Tanzania prudential requirements
Risk-weighted asset optimisation (Basel III)	Government Bonds (0% risk weight)	Capital adequacy framework
Yield-seeking on surplus deposits	2–5 year Treasury Bonds	Asset-liability management (ALM)
Collateral for interbank borrowing	Treasury Bills & short bonds	IBCM repo market rules

Pension Funds — Fast-Growing Long-Term Holders

Tanzania's three major pension funds — NSSF, PSSSF and LAPF — collectively hold TZS 10,352.2 billion (27.3%), the fastest-growing major creditor by absolute increase (+TZS 1,257.6 billion year-on-year). Their investment mandate requires matching long-duration liabilities with long-dated assets:

Fund	Type	Primary Instrument	Investment Horizon
NSSF (National Social Security Fund)	Private sector workers	10–25 year Treasury Bonds	20–30 years
PSSSF (Public Service Social Security Fund)	Public servants	Long-term Government Bonds	20–30 years
LAPF (Local Authorities Provident Fund)	Local government workers	Government Bonds & T-Bills	10–25 years
Combined (all pension funds)	—	Predominantly bonds	Long-term focus

Pension Fund Growth Driver: Tanzania's formal employment is expanding as GDP grows at 6.0–6.3%, increasing NSSF/PSSSF/LAPF contributions. As assets under management (AUM) grow, so does demand for long-dated government securities — creating a self-reinforcing cycle of market development.

Year-on-Year Growth by Creditor Category (TZS Billion)

Absolute change between January 2025 and January 2026

The "Others" Category — Broadening Participation

The "Others" category — comprising public institutions, private companies, individuals and non-resident investors — grew by TZS 1,345.4 billion (+23.3%), making it the fastest-growing creditor by percentage among the non-fund categories. Its share rose from 16.9% to 18.8%, reflecting:

Increased retail investor participation in Tanzania's government securities primary market
Growing awareness of Treasury bonds as a savings vehicle for individuals
Corporate treasury departments deploying surplus liquidity into short-term T-Bills
Non-resident investors attracted by competitive yields amid a stable TZS exchange rate

Data Reconciliation: BoT Report vs Monthly Economic Review (MER)

The Bank of Tanzania publishes domestic debt data through two channels — the Government Domestic Debt report (DOCX) and the Monthly Economic Review (MER) for February 2026. Minor variations exist between these two sources due to timing, rounding and classification adjustments.

Creditor Category	BoT Debt Report (TZS B)	MER Feb 2026 (TZS B)	Variance	Share (Report)	Share (MER)
Commercial Banks	10,979.6	10,902.5	−77.1	29.0%	28.5%
Pension Funds	10,352.2	10,389.5	+37.3	27.3%	27.1%
Bank of Tanzania	6,695.2	7,436.0	+740.8	17.7%	19.4%
Insurance Companies	2,006.1	2,005.0	−1.1	5.3%	5.2%
BOT Special Funds	737.8	737.8	0.0	1.9%	1.9%
Others	7,128.0	7,128.9	+0.9	18.8%	18.6%
Total	38,599.6 / 37,899.0	38,599.7	~0	100%	100%

Most Notable Variance — Bank of Tanzania: The BoT Debt Report shows TZS 6,695.2B while the MER shows TZS 7,436.0B — a difference of TZS 740.8 billion (10.9%). This likely reflects the timing of how BoT's own holdings (e.g. overdraft facilities and special accounts) are classified and consolidated across reporting periods. Analysts should note this when modelling precise creditor shares.

BoT Debt Report vs Monthly Economic Review (MER) — Data Comparison

TZS Billion — January 2026 figures across both official BoT publications

Macroeconomic Indicators Underpinning the Debt Structure

Tanzania's domestic debt structure does not exist in isolation. It is embedded in a broader macroeconomic environment that influences borrowing costs, debt sustainability, and economic growth outcomes.

6.0–6.3%

GDP Growth Forecast 2026

Driven by mining, agriculture and services

3.2%

Inflation Rate

Well within BoT's single-digit target

5.75%

Central Bank Rate (CBR)

Benchmark rate; accommodative stance

6.68%

IBCM Rate

Inter-bank cash market; above CBR floor

USD 6.3B

Foreign Exchange Reserves

Adequate import cover; supports TZS stability

13.4%

Unemployment Rate

Underlines need for growth-inclusive spending

23.5%

Private Credit Growth

Robust; but at risk if domestic debt crowds out banks

TZS 49.2T

FY 2025/26 National Budget

Domestic securities finance ~34% of total budget

Tanzania Key Macro Indicators — 2026 Snapshot

Selected indicators relevant to domestic debt sustainability (normalised for display)

Budget Financing: How Domestic Debt Fits In

Budget Item	Value	Context
Total National Budget (FY 2025/26)	TZS 49.2 trillion	Approved national budget
Domestic Securities Financing Share	~34% (~TZS 16.7T)	Largest single domestic financing source
GDP Contribution from Debt Financing	1.0–1.5% of GDP	Via infrastructure spend funded by securities
Domestic Debt Servicing / Budget	~6.5%	TZS 669.8B monthly servicing vs total budget
Domestic Debt / GDP	~17%	Within manageable range; monitor upward trend
FDI Target (2026)	USD 15 billion	Supported by stable macro environment built on sound debt management

Risk & Opportunity Matrix for Domestic Debt

For investors, policymakers and business operators, Tanzania's domestic debt landscape presents a balanced mix of structural opportunities and manageable risks. The matrix below synthesises the key findings from the BoT data.

✅ Market Opportunities

Oversubscribed auctions signal excess liquidity and strong demand — enabling government to borrow at competitive rates
Pension fund AUM growth creates structural long-term demand for Treasury bonds, supporting market depth
Retail participation rising in the "Others" category — democratising access to government securities
85.4% securities-based debt supports a liquid secondary market for bond trading
FDI of USD 15 billion targeted for 2026 benefits from macro stability anchored by sound debt management
23.5% private credit growth benefits from BoT's accommodative stance enabled by controlled domestic borrowing

⚠️ Risks to Monitor

Domestic debt growing faster than GDP (~22% vs ~6.3%) — debt-to-GDP ratio creeping toward 20%
Monthly servicing of TZS 669.8B (interest 54.6%) could escalate if yields rise at future auctions
Crowding out risk: if banks over-allocate to government securities, private sector credit could be squeezed
Urban concentration of fiscal spend — rural agriculture (26% GDP) may under-benefit from debt-funded infrastructure
MER vs report variance for BoT holdings (TZS 740.8B gap) introduces uncertainty in creditor analytics
Social spending trade-off: rising interest payments (TZS 365.9B/month) divert resources from poverty reduction targets (~20% by 2030)

Tanzania Domestic Debt — Risk vs Opportunity Scorecard

Illustrative scoring (1–10) across six dimensions based on BoT data

Frequently Asked Questions (FAQ)

The following questions address common points of interest from investors, researchers and policymakers engaging with Tanzania's domestic debt data.

As of January 2026, Tanzania's government domestic debt stock stands at TZS 38,599.6 billion (approximately TZS 38.6 trillion). This is up 1.9% from TZS 37,899.0 billion at end-December 2025, and up 13.0% from TZS 34,154.9 billion in January 2025. The stock has nearly tripled since 2018 (TZS 13,618.8 billion), reflecting sustained expansion of government development financing through the domestic securities market.

Commercial banks hold the single largest share at 29.0% (TZS 10,979.6 billion), followed closely by pension funds at 27.3% (TZS 10,352.2 billion). Together, these two institutional groups account for over 56% of all domestic debt. The Bank of Tanzania holds a further 17.7%, while "Others" (institutions, individuals, non-residents) hold 18.8%.

The Bank of Tanzania's share fell from 20.8% (Jan 2025) to 17.7% (Jan 2026), a decline of 3.1 percentage points — representing a TZS 417.1 billion reduction in absolute holdings. This is generally viewed as a positive development: it signals that the government is reducing reliance on central bank financing (often called "monetisation of the deficit"), instead shifting to market-based borrowing from commercial banks, pension funds and other investors. Reduced BoT financing helps contain inflationary pressure.

As of January 2026, 80.4% (TZS 31,015.1 billion) of domestic debt consists of long-term Government/Treasury Bonds. Treasury Bills account for 4.7% (TZS 1,821.4 billion), Government Stocks for 0.4% (TZS 135.7 billion), and Non-Securitised Debt (including overdraft facilities) for the remaining 14.6% (TZS 5,627.3 billion). Altogether, 85.4% of domestic debt is held in market-traded securities — indicating a mature and liquid government securities market.

In January 2026, the government serviced TZS 669.8 billion in domestic debt obligations — comprising TZS 303.9 billion in principal repayments (45.4%) and TZS 365.9 billion in interest payments (54.6%). The fact that interest payments exceed principal repayments reflects the large and growing stock of debt. At approximately 6.5% of the national budget, this servicing cost is manageable but bears watching as the debt stock continues to grow.

As of early 2026, evidence of significant crowding-out is not yet confirmed — private sector credit growth remains robust at 23.5% annually. However, the risk exists if domestic debt continues to grow at 17–22% per year while the banking sector's capacity to finance both government and private borrowers is limited. The key risk threshold is if domestic debt growth consistently exceeds 22% — at that point, banks may prioritise zero-risk-weighted government bonds over lending to SMEs, which contribute 40% of GDP.

Pension funds such as NSSF, PSSSF and LAPF have long-dated liabilities — they must pay out pension benefits decades into the future. To meet these obligations, they need stable, long-term, predictable income streams. Government Treasury bonds (typically 5–25 year maturities at yields around 11–13%) are nearly ideal: they offer low default risk, consistent coupon payments, and long enough duration to match pension liability profiles. As Tanzania's formal employment base grows and fund contributions increase, pension fund demand for long-dated government bonds is expected to keep rising.

An oversubscribed auction means that investors submitted bids exceeding the government's offered amount. For example, in January 2026, a 10-year bond auction was oversubscribed by 34%, with total bids reaching TZS 840 billion against the offered amount. This is positive for several reasons: it confirms investor confidence in Tanzania's creditworthiness, it allows the government to reject high-yield bids and keep borrowing costs low, and it signals market depth — sufficient savings are being recycled into government instruments to fund public investment without excessive fiscal strain.

Data Notes, Methodology & Definitions

This section provides essential context for interpreting the data presented in this analysis, including definitions, source notes, known data variances and analytical methodology applied by TICGL researchers.

Primary Data Source

Bank of Tanzania (BoT) — Government Domestic Debt by Creditor Category report (January 2026 data), published March 2026. Cross-referenced with BoT Monthly Economic Review (MER) February 2026.

Currency & Units

All monetary values are denominated in Tanzanian Shilling (TZS), expressed in billions (B) unless otherwise stated. 1 TZS Billion = TZS 1,000,000,000.

Total Debt Range

The document references two total debt figures: TZS 37,899.0B (end-December 2025 / year-end 2025) and TZS 38,599.6B (end-January 2026). Both are referenced in context throughout this analysis.

MER Variance Note

Minor differences exist between the debt report and MER data, most notably for Bank of Tanzania holdings (TZS 740.8B gap). MER figures are shown in parentheses where they differ materially from the primary report.

Growth Rates

Annual growth rates are calculated as year-on-year (YoY) percentage changes between equivalent periods. The "2020→2022" rate reflects cumulative two-year growth (annualised equivalent not shown separately).

Creditor Category Definitions

"Commercial Banks" excludes the Bank of Tanzania and Microfinance Banks (MFBs). "Others" includes SACCOs, public enterprises, individuals and non-resident investors per BoT classification.

Instruments Classification

"Government Bonds" = Treasury Bonds with maturities of 2 years and above. "Treasury Bills" = maturities of 35 to 364 days. "Non-Securitised Debt" includes Ways & Means advances, overdraft and other direct credit arrangements.

GDP Reference

GDP estimates used for debt-to-GDP ratios (~17%) are based on BoT and IMF projections for Tanzania's nominal GDP for FY 2025/26. Actual ratios may vary upon final GDP outturn data.

TICGL Analytical Disclaimer

This analysis is produced by TICGL for informational and research purposes. It does not constitute investment advice. For the most current data, visit www.bot.go.tz.

Key Abbreviations Used

Abbreviation	Full Name	Context
BoT	Bank of Tanzania	Central bank; primary data source
TZS	Tanzanian Shilling	National currency
MER	Monthly Economic Review	BoT's monthly macroeconomic publication
NSSF	National Social Security Fund	Largest pension fund in Tanzania
PSSSF	Public Service Social Security Fund	Public servants' pension scheme
LAPF	Local Authorities Provident Fund	Local government workers' fund
IBCM	Inter-Bank Cash Market	Short-term interbank lending market
CBR	Central Bank Rate	BoT's benchmark policy rate
OMO	Open Market Operations	BoT's monetary policy toolkit
FDI	Foreign Direct Investment	External investment inflows to Tanzania
SME	Small and Medium Enterprise	Key private sector contributor (~40% GDP)
GDP	Gross Domestic Product	Total value of Tanzania's economic output
ALM	Asset-Liability Management	Banks' portfolio balancing approach
FY	Financial Year	Tanzania's FY runs July–June

For the latest data: Tanzania's domestic debt figures are updated monthly by the Bank of Tanzania. The most current data is available at www.bot.go.tz. TICGL publishes updated economic analyses at ticgl.com and through the Tanzania Business Intelligence Dashboard.

Data Sources: Bank of Tanzania — Government Domestic Debt by Creditor Category (March 2026); BoT Monthly Economic Review (February 2026); Tanzania National Budget FY 2025/26. Analysis by TICGL – Tanzania Investment and Consultant Group Ltd.

11.30%

10-Yr Bond Yield

January 2026 Auction

TZS 2,869B

IBCM Turnover

January 2026

34%

Bond Oversubscription

Jan 2026 10-Yr Auction

73.2%

7-Day Interbank Share

Dominant Tenor

5.75%

Central Bank Rate

BoT CBR Q1 2026

6.3%

GDP Growth Forecast

Tanzania 2026

Section 01

Government Securities Market — Overview

The Government Securities Market is where the Tanzanian government raises domestic funds by issuing Treasury Bills (short-term) and Treasury Bonds (long-term) through competitive auctions conducted by the Bank of Tanzania (BoT). It serves as the primary mechanism for non-inflationary budget financing and development project funding.

As of early 2026, Tanzania's government securities market exhibits remarkable resilience: auctions remain consistently oversubscribed, yields have stabilized within the 9–12% range, and institutional demand continues to grow — reflecting investor confidence underpinned by stable inflation at 3.2% and projected GDP growth of 6.0–6.3%.

Key Context Tanzania's domestic debt stock reached TZS 38,114.8 billion in October 2025 (~17% of GDP), with Treasury Bonds comprising ~70% of the total, reflecting a deliberate strategy toward longer-duration, more stable financing.

Main Market Instruments

📋

Treasury Bills

Maturity: 35 · 91 · 182 · 364 Days

Short-term government debt instruments used for liquidity management and immediate budget financing. Auctioned weekly by the Bank of Tanzania via competitive bidding.

🏛️

Treasury Bonds

Maturity: 2 – 25 Years

Long-term government securities issued to finance development projects: infrastructure, hydropower, roads, and agriculture. Provide stable, predictable debt servicing costs.

Typical Buyers of Government Securities

Commercial Banks

Pension Funds

Insurance Companies

Institutional Investors

Why the Government Securities Market Matters

Importance of Government Securities Market in Tanzania
Function	Explanation	Impact
Government Financing	Supports budget deficits and development projects without printing money	High
Monetary Policy Tool	Used by Bank of Tanzania (BoT) for open-market liquidity management	High
Benchmark Interest Rate	Treasury yields serve as reference rates for loans, mortgages, and other instruments	Medium
Safe Investment Asset	Low-risk option for institutional investors — pension funds, banks, insurers	Medium
Debt Sustainability	Reduces reliance on external (foreign currency) borrowing, mitigating FX risk	High

Source: Bank of Tanzania; TICGL Analysis 2026

Section 02

Treasury Bills — Auction Performance

Treasury Bill auctions are conducted weekly by the Bank of Tanzania across four tenors: 35-day, 91-day, 182-day, and 364-day instruments. From October 2025 through January 2026, every auction was oversubscribed, a clear signal of sustained institutional confidence in short-term government paper.

Yields edged slightly upward from the 9–10% range in October 2025 to 11–12% by January 2026 — a reflection of tightening liquidity conditions and evolving market expectations ahead of the central bank's policy decisions. Crucially, this yield movement occurred within an orderly market, with the government consistently absorbing its full tender each auction cycle.

Treasury Bills Auction Results (Oct 2025 – Jan 2026)

Month	Tender Size (TZS Bn)	Bids Submitted (TZS Bn)	Successful Bids (TZS Bn)	Wtd. Avg. Yield	Oversubscription
Oct 2025	~560	~740	~560	9.0 – 10.0%	+32%
Nov 2025	~560	~720	~560	~10.0%	+29%
Dec 2025	~560	~800	~560	~11.0%	+43%
Jan 2026	~560	~840	~560	11.0 – 12.0%	+50%

Source: Bank of Tanzania Auction Reports, TICGL compilation. Bids submitted and tender sizes are approximations based on BoT data.

Treasury Bills: Demand vs. Tender Size & Yield Trend

Monthly auction performance — Oversubscription and weighted average yield movement

Oct 2025 – Jan 2026

Bid Oversubscription Rate — Monthly Trend

Percentage by which bids submitted exceeded the government's tender size

Investor Demand Indicator

✅ Key Observation Every Treasury Bill auction from October 2025 to January 2026 was oversubscribed — meaning the market offered more funds than the government required. This indicates exceptionally high investor confidence in Tanzanian government debt instruments. The rise in oversubscription from ~32% (Oct 2025) to ~50% (Jan 2026) signals deepening domestic capital markets.

Section 03

Treasury Bonds — 10-Year Auction Analysis

Alongside the weekly Treasury Bill auctions, the Bank of Tanzania conducts periodic Treasury Bond auctions for longer tenors ranging from 2 to 25 years. These bonds are critical instruments for financing Tanzania's long-term development agenda — hydropower, roads, industrial zones, and social infrastructure.

The January 2026 10-year Treasury Bond auction stands as a landmark result: oversubscribed by approximately 34%, with a weighted average yield of 11.30% — a borrowing cost that remains favorable by regional standards. The high demand reflects growing pension fund and insurance company allocations to domestic long-duration paper.

10-Year Treasury Bond Auction — January 2026

Indicator	Value (TZS Billion)	Interpretation
Tender Size	144.6	Government's target raise for this auction
Total Bids Received	194.1	Market offered TZS 49.5 billion above the tender
Successful Bids	118.9	Government accepted below tender — managing yield levels
Weighted Average Yield	11.30%	Favorable long-term borrowing cost for the government
Oversubscription Rate	~34%	Strong institutional demand for long-duration GoT paper

Source: Bank of Tanzania, January 2026 Bond Auction Results

10-Year Treasury Bond: Tender vs. Bids vs. Successful Allocations

Visual breakdown of the January 2026 auction — government's strategic acceptance below tender

Jan 2026

Yield Comparison: Treasury Bills vs. 10-Year Treasury Bond

Tanzania's yield curve — risk-return relationship across maturities

Yield Curve Snapshot

⚠️ Strategic Note The government accepted TZS 118.9 billion — below the TZS 144.6 billion tender — to maintain favorable yield levels and avoid upward pressure on long-term borrowing costs. This disciplined approach to debt management demonstrates sound fiscal stewardship by the Ministry of Finance and BoT.

Section 04

Interbank Cash Market — IBCM Analysis

The Interbank Cash Market (IBCM) is where commercial banks lend and borrow short-term funds among themselves to manage daily liquidity positions. It serves as a critical transmission mechanism for monetary policy — interest rates here respond quickly to the Central Bank Rate (CBR) set by the Bank of Tanzania.

In January 2026, total IBCM turnover reached TZS 2,868.9 billion, a slight decline from December's TZS 3,481.9 billion — reflecting post-year-end normalisation rather than market stress. The dominant tenor was 7-day transactions, accounting for 73.2% of all interbank activity.

IBCM Market Activity — January 2026

Indicator	Value	Context
Total Market Turnover (Jan 2026)	TZS 2,868.9 Bn	Active market — supports smooth bank liquidity operations
Previous Month Turnover (Dec 2025)	TZS 3,481.9 Bn	Higher Dec activity driven by year-end liquidity demand
Month-on-Month Change	–17.6%	Normalisation post year-end, not a sign of market stress
Dominant Tenor	7-Day Transactions	Banks prefer 7-day instruments for predictable short-term management
Share of 7-Day Transactions	73.2%	Signals preference for medium short-term over overnight borrowing

Source: Bank of Tanzania Monthly Economic Review, January 2026

Interbank Transaction Tenor Breakdown

~15%

Overnight

~12%

2–6 Days

73.2%

7 Days

Chart: IBCM transaction share by tenor — January 2026. The 7-day rate serves as a benchmark indicator of overall banking system liquidity.

Interbank Cash Market — Monthly Turnover Trend

TZS Billion — estimated turnover Q4 2025 through January 2026

IBCM Activity

IBCM Transaction Structure by Tenor — January 2026

Share of interbank lending by maturity bucket

Tenor Distribution

Monetary Policy Transmission Chain

BoT Sets

CBR: 5.75%

→

IBCM Responds

7-Day Rate

→

Banks Price

Lending Rates

→

Economy

Credit Growth

Bank of Tanzania Liquidity Management Instruments

Instrument	Direction	Purpose	Effect on IBCM
Reverse Repo	Inject ↑	BoT buys securities from banks — adds liquidity	Pushes IBCM rate down toward CBR floor
Repo	Absorb ↓	BoT sells securities to banks — drains liquidity	Pushes IBCM rate up within policy corridor
Government Securities (OMO)	Dual	Open Market Operations — fine-tune liquidity	Anchors overnight and short-term rates
Standing Lending Facility	Emergency ↑	Emergency liquidity backstop for commercial banks	Sets ceiling on IBCM rates

Source: Bank of Tanzania Monetary Policy Framework; TICGL Analysis 2026

How Government Securities and Interbank Market Interact

🏛️ Government Securities Market

▸ Used for government borrowing and fiscal financing

▸ Provides safe, liquid investment assets for banks

▸ Influences banking system liquidity when banks buy securities

▸ Sets the benchmark yield curve for the economy

🏦 Interbank Cash Market (IBCM)

▸ Used for bank-to-bank short-term liquidity management

▸ Determines prevailing short-term interest rates daily

▸ Responds to liquidity changes caused by T-Bill purchases

▸ Transmits BoT monetary policy to the real economy

💡 The Feedback Loop Explained When banks purchase large volumes of Treasury Bills, their available cash reserves fall. To meet reserve requirements or fund daily operations, these banks then borrow from the interbank market. This raises IBCM demand and can push short-term rates higher — creating a direct feedback loop between the government securities market and interbank liquidity conditions.

Section 05

Key Market Indicators — Tanzania, January 2026

The table below synthesizes the most critical data points from Tanzania's financial markets as of January 2026, drawing from Bank of Tanzania publications and TICGL research. Together, these indicators paint a picture of a stable, well-functioning domestic financial system.

Indicator	Value	Status	Signal
Treasury Bill Demand	Oversubscribed every auction	✅ Strong	High investor confidence in short-term GoT debt
T-Bill Weighted Avg. Yield (Jan 2026)	11.0 – 12.0%	Elevated	Tight liquidity; slight upward yield pressure
10-Year Bond Yield	11.30%	✅ Stable	Favorable long-term borrowing cost
10-Year Bond Oversubscription	~34%	✅ Strong	Deep institutional appetite for long-duration GoT bonds
IBCM Turnover (Jan 2026)	TZS 2,868.9 Bn	Active	Healthy bank-to-bank liquidity trading
Dominant IBCM Tenor	7-Day	Normal	Short-term focus reflects standard liquidity management
Share of 7-Day Transactions	73.2%	Dominant	Market benchmark for system-wide liquidity
Central Bank Rate (CBR)	5.75%	✅ Stable	Accommodative stance supporting growth targets
Domestic Debt / GDP	~17%	✅ Sustainable	Well within international thresholds
Tanzania Inflation (Feb 2026)	3.2%	✅ Within Target	BoT target range: 3–5%

Source: Bank of Tanzania; National Bureau of Statistics; TICGL Research, March 2026

Tanzania Financial Market Health — Multi-Metric Overview

Composite assessment across six dimensions — January 2026 (scores are illustrative normalised ratings)

Market Dashboard

Metric	FY 2025/26	FY 2026/27 (Projected)	Assessment
Total Domestic Borrowing	~TZS 12.8 Tn	TZS 15.24 Tn	Increasing
Domestic Debt Stock	TZS 38,114.8 Bn	Est. TZS 42,000+ Bn	Manageable
Domestic Debt / GDP	~17%	~18–19%	Sustainable
Total Public Debt / GDP	~40.6%	~42%	Below 55% threshold
Debt Service / Budget	~6.5%	~7–8%	Moderate
Bonds Share of Domestic Debt	~70%	~72%	Longer-duration stability
Avg. Weighted Yield (T-Bills)	~10.8%	~11–12%	Slight upward pressure

Indicator	Value	Target / Benchmark	Status
Central Bank Rate (CBR)	5.75%	Policy corridor anchor	Accommodative
Tanzania Inflation Rate (Feb 2026)	3.2%	BoT target: 3–5%	✅ On Target
Private Sector Credit Growth (YoY)	16.1%	Target: 20%+	Below target
T-Bill Yield Serving as Benchmark	11.0–12.0%	Market lending rate reference	Elevated
Bank Holdings of Gov. Securities	~70% of IBCM assets	—	Crowding-out risk
Foreign Exchange Reserves	USD 6.3 Billion	Min. 4 months import cover	~5 months cover

Indicator	2024	2025	2026 Target	Driver
FDI Inflows	~USD 9.5 Bn	~USD 11 Bn	USD 15 Bn	Policy reforms, stable macro environment
New Investment Projects Approved	~780	927	1,000+	TIC facilitation, lower regulatory friction
Jobs from New Investments	~130,000	~160,000	180,000+	Infrastructure-led investment expansion
Household Savings Rate	~11%	~12%	13–14%	Deepening financial sector access
External Debt Share of Total Debt	~71%	~69.5%	68%	Shift toward domestic financing
Foreign Reserves (Import Cover)	~4.7 months	~5.0 months	5+ months	Strong gold & export earnings

Implication 04

Risks & Challenges — Headwinds to Sustained Growth

While Tanzania's government securities market performs strongly, it is not without risks. The primary concern is the crowding-out effect: as the government borrows more domestically to fund a projected TZS 15.24 trillion in FY 2026/27, it competes directly with private sector borrowers for the same pool of bank funds. This dynamic can constrain SME lending, slow private investment diversification, and limit youth employment opportunities.

External shocks — particularly oil price volatility and tightening global financial conditions — could raise yields beyond the current 11–12% range, increasing debt-servicing costs and squeezing fiscal space. Analysts note Tanzania's strong buffers (USD 6.3 billion reserves, stable gold export earnings) provide meaningful protection, but sustained vigilance remains essential.

Opportunities vs. Risks — Balanced Assessment

✅ Opportunities

▸ Deepening domestic capital markets through longer-tenor issuance (25-year bonds)

▸ Green bond issuance to fund climate-resilient infrastructure

▸ SME guarantee facilities funded by excess auction liquidity

▸ Pension fund diversification into productive sectors

▸ Reducing external borrowing dependence — lower FX risk

▸ Continued oversubscription signals room for larger tender sizes

⚠️ Risks

▸ Crowding out: private sector credit growth below 20% target

▸ Rising yields if global rates increase or oversubscription wanes

▸ Increasing domestic borrowing (TZS 15.24 Tn in FY 2026/27)

▸ Youth unemployment at ~13.4% if SME credit remains constrained

▸ External shocks (oil price, global liquidity shifts) could spike yields

▸ Revenue shortfalls could create vicious debt-servicing cycles

Full Economic Implication Matrix

Implication Category	Positive Impact	Potential Risk	Net Assessment
Fiscal Space	Funds 6–7% GDP growth via infrastructure; hydropower adds USD 3.5B value	Higher yields could raise servicing costs if oversubscription wanes	Net Positive
Financial Deepening	Market size ~15% GDP; attracts institutional investors; builds yield curve	Crowding out: private credit growth below 20% target, hurting SMEs	Mixed
Macro Stability	Anchors inflation at 3.2%; supports 6.3% GDP forecast; low external risk	External debt risks if global rates rise, though domestic focus mitigates	Net Positive
Investment Attraction	927 new projects in 2025 (~USD 11B); stable credit ratings; policy reforms	Youth unrest or policy gaps could deter FDI; job creation may slow	Net Positive
Monetary Policy	Effective OMO tool; inflation within target; reserves at 5 months cover	Bank-heavy holdings (~70%) risk reducing SME lending if liquidity tightens	Moderate
Debt Sustainability	Total debt-to-GDP ~40.6% — well below 55% IMF threshold	FY 2026/27 borrowing (TZS 15.24 Tn) increases pressure on sustainability	Sustainable
Employment & Inclusion	~160,000 jobs from infrastructure-linked investments in 2025	Crowding-out limits SME finance; youth unemployment persists at ~13.4%	Watch

Source: TICGL Economic Analysis; Bank of Tanzania; IMF; World Bank Tanzania Economic Update 2025

Tanzania Debt Sustainability — Key Ratios vs. Risk Thresholds

Current levels (blue) plotted against IMF/World Bank risk thresholds (red dashed). Values in % of GDP.

Debt Sustainability

Four Pillars of Economic Impact

🏗️

Infrastructure & Fiscal Financing

Domestic securities fund ~34% of the national budget, prioritizing hydropower (+1.2–1.5% GDP), roads, and industrial zones. Average borrowing cost of ~10.8% keeps debt servicing at a sustainable 6.5% of budget.

TZS 49.2 Tn — FY 2025/26 Budget Size

📉

Inflation Anchoring & Stability

BoT's use of securities for Open Market Operations keeps inflation at 3.2% within the 3–5% target. This protects household purchasing power and anchors business planning confidence across all sectors.

3.2% — Tanzania Inflation, February 2026

💰

FDI & Investment Climate

Consistent oversubscription signals macro credibility, contributing to USD 11B in FDI in 2025. Stable credit outlook and policy reforms target USD 15B by end-2026, with 927 new approved investment projects.

USD 11 Bn — Tanzania FDI Inflows, 2025

⚠️

Crowding-Out & SME Risk

Banks holding ~70% of liquid assets in government securities may limit SME credit access. Private credit growth at 16.1% remains below the 20% target. Youth unemployment at 13.4% requires urgent private-sector catalysis.

13.4% — Youth Unemployment Rate, 2025

Indicator	Value	Interpretation
Tender Size	TZS 176.1 billion	Government financing needs and liquidity management
Total Bids Received	TZS 341.2 billion	Strong demand (oversubscription)
Amount Accepted	TZS 291.7 billion	BoT accommodated excess liquidity
Bid-to-Cover Ratio	1.94	Indicates high investor appetite
Weighted Average Yield	5.87%	Declined from 6.25% in previous month
Yield Trend	Downward	Reflects excess liquidity and lower risk perception

Indicator	Value	Interpretation
Instrument	20-Year Treasury Bond	Long-term financing
Tender Size	TZS 236.3 billion	Infrastructure and long-term fiscal needs
Total Bids Received	TZS 813.5 billion	Very strong demand
Amount Accepted	TZS 232.9 billion	Near full allotment
Bid-to-Cover Ratio	3.44	Exceptional investor confidence
Weighted Average Yield	12.02%	Eased compared to previous auctions
Coupon Rate	13.00%	Attractive long-term return

Indicator	Rate (%)	Policy Signal
Overall IBCM Rate	6.29	Stable
Central Bank Rate (CBR)	5.75	Policy anchor
Rate Movement	Almost unchanged	Liquidity adequate
Policy Corridor	±2 percentage points around CBR	Effective transmission

Market Segment	Key Message
Government Securities	Strong demand, declining yields, low domestic borrowing cost
Treasury Bonds	High confidence in long-term fiscal sustainability
Interbank Cash Market	Deepening liquidity and stable short-term rates
Monetary Policy Stance	Effective control of short-term interest rates

Creditor Category	Share (%)
Commercial Banks	36.4%
Bank of Tanzania	30.2%
Pension Funds	22.1%
Insurance Companies	3.7%
Other Official Entities	4.2%
Retail Investors & Others	3.4%

Indicator	December 2025	November 2025	December 2024
Market Turnover (TZS billion)	3,481.9	1,781.0	1,616.8
Month-on-Month Growth	+95.5%	—	—
Year-on-Year Growth	+115.3%	—	—

Tenor	Share of Total Transactions
Overnight	Significant but secondary
2–6 Days	Moderate
7-Day Transactions	39.9% (dominant)
Other Tenors	Minor

What Is Tanzania's National Debt?

External Debt Stock by Creditor Category

Use of External Debt Funds

Domestic Debt Overview

Domestic Debt Instruments

Trend of Tanzania External Debt (2025–2026)

Key Drivers of Debt Increase

Composition of Tanzania's Total National Debt

Key Indicators of Debt Sustainability

Debt Servicing — January 2026

Economic Implications of Tanzania's National Debt

Summary of Tanzania National Debt — January 2026

✅ Conclusion

Overview of Tanzania's Domestic Debt

Government Domestic Debt by Creditor Category (January 2026)

Year-on-Year Comparison: January 2025 vs January 2026

Distribution Among Major Creditor Groups

Role of Each Creditor Category

Commercial Banks

Pension Funds

Bank of Tanzania (Central Bank)

Insurance Companies

BOT Special Funds

Others (Institutions, Individuals)

Domestic Debt Growth Trend (2018 – January 2026)

Domestic Debt by Instrument (January 2026)

Domestic Debt Servicing — January 2026

Economic Implications for Tanzania's Growth and Development

Key Observations & Conclusion

Key Observations

Financial Institutions Dominate

Steady Debt Growth Supports Fiscal Needs

Increasing Role of Institutional Investors

Declining Central Bank Monetisation

Conclusion

Government Securities Market Context

January 2026 Auction Highlights

Securities Market Size and Depth

IBCM Rate and Monetary Policy Link

Role of Domestic vs External Debt

Investor Deep-Dive: Who Holds What and Why

Portfolio Allocation by Creditor (Visual Overview)

Commercial Banks — Largest Holder

Pension Funds — Fast-Growing Long-Term Holders

The "Others" Category — Broadening Participation

Data Reconciliation: BoT Report vs Monthly Economic Review (MER)

Macroeconomic Indicators Underpinning the Debt Structure

Budget Financing: How Domestic Debt Fits In

Risk & Opportunity Matrix for Domestic Debt

✅ Market Opportunities

⚠️ Risks to Monitor

Frequently Asked Questions (FAQ)

Data Notes, Methodology & Definitions

Key Abbreviations Used

Government Securities Market — Overview

Main Market Instruments

Typical Buyers of Government Securities

Why the Government Securities Market Matters

Treasury Bills — Auction Performance

Treasury Bills Auction Results (Oct 2025 – Jan 2026)

Treasury Bonds — 10-Year Auction Analysis

10-Year Treasury Bond Auction — January 2026

Interbank Cash Market — IBCM Analysis

IBCM Market Activity — January 2026

Interbank Transaction Tenor Breakdown

Monetary Policy Transmission Chain

Bank of Tanzania Liquidity Management Instruments

How Government Securities and Interbank Market Interact

Key Market Indicators — Tanzania, January 2026

Economic Implications — Tanzania's Growth & Development

Tanzania GDP Growth Trajectory

Financing Development Projects — Fiscal Space & Budget Support

Domestic Borrowing & Debt Metrics — Tanzania 2025/26

Monetary Policy Transmission — Stability & Inflation Control

Monetary Policy & Stability Indicators — Q1 2026

Investor Confidence — Domestic Capital Mobilisation & FDI

Tanzania FDI & Investment Confidence — Key Metrics

Risks & Challenges — Headwinds to Sustained Growth

Opportunities vs. Risks — Balanced Assessment

Full Economic Implication Matrix