Tanzania Inflation Statistics 2026 - Comprehensive Economic Analysis | TICGL

Current Inflation Rate

3.3%

↓ from 3.6% (December 2025)

Consumer Price Index (CPI)

121.41

Base Year: 2020 = 100

Core Inflation

2.2%

Stable & Controlled

Food Inflation

5.7%

↓ from 6.7% (December 2025)

Executive Summary

Tanzania continues to demonstrate remarkable economic stability with low and controlled inflation. As of January 2026, the headline inflation rate stands at 3.3%, reflecting a moderate decrease from 3.6% recorded in December 2025. This positive trajectory underscores the effectiveness of Tanzania's monetary policy framework and macroeconomic management.

The Consumer Price Index (CPI) has risen from 117.57 in January 2025 to 121.41 in January 2026, representing a year-on-year increase of 3.3%. Tanzania's inflation has remained consistently below the 5% threshold since 2021, demonstrating strong price stability even amid global economic uncertainties.

Key Highlights:

Inflation methodology follows UN COICOP 2018 classification with 2020 as the base year (2020=100)
Core inflation at 2.2% indicates effective control of underlying price pressures
Food inflation (5.7%) remains the highest category but shows improvement from 6.7%
Energy inflation (4.6%) has eased significantly from peaks of 9%+ in 2022-2024
12-month inflation range: 3.1% - 3.6% demonstrates remarkable stability

Historical Inflation Trends (2021-2026)

Understanding Tanzania's inflation journey over the past five years provides crucial context for current economic conditions. The period from 2021 to 2026 has witnessed significant global economic events, including the COVID-19 recovery, the Russia-Ukraine conflict, and worldwide commodity price volatility. Tanzania has navigated these challenges with notable resilience.

Table 1: Historical Annual Average Inflation Rates (2021-2026)

Year	Headline Inflation	Core Inflation	Non-Core Inflation	Food & Beverages	Energy/Fuel	Key Drivers
2021	3.7%	4.1%	2.5%	~3-4%	3.1%	Transport, Food
2022	4.3%	3.0%	8.2%	7.3%	9.1%	Global Commodity Shocks
2023	3.8%	~3.5%	~2.2%	2.1%	9.3%	Easing Food Prices
2024	3.1%	3.4%	2.2%	2.1%	9.3%	Continued Downward Trend
2025	3.3%	2.2%	6.2%	6.4%	4.3%	Food Price Rebound
2026 (Jan)	3.3%	2.2%	6.0%	5.7%	4.6%	Stabilizing

📊 Key Insight: Inflation Peak and Recovery

Inflation peaked at 4.3% in 2022 due to unprecedented global economic shocks, including supply chain disruptions, the Russia-Ukraine conflict, and soaring energy prices. However, Tanzania's proactive monetary policy and effective macroeconomic management led to a swift decline to 3.1% in 2024. The slight increase to 3.3% in 2025-2026 is primarily attributed to food price rebounds, while energy inflation has moderated significantly.

Historical Inflation Trends (2021-2026)

Detailed Historical Analysis

2021: Post-Pandemic Recovery

The year 2021 marked Tanzania's economic recovery from the COVID-19 pandemic. With headline inflation at 3.7%, the economy demonstrated resilience. Core inflation stood at 4.1%, slightly higher than the headline rate, indicating some underlying demand pressures. Transport and food sectors were the primary drivers during this period.

2022: Global Shocks and Peak Inflation

2022 witnessed the highest inflation rate in the five-year period at 4.3%, primarily driven by global commodity shocks following the Russia-Ukraine conflict. Energy/fuel inflation surged to 9.1%, while food inflation reached 7.3%. Non-core inflation spiked to 8.2%, reflecting the volatile nature of global commodity markets. Despite these challenges, Tanzania's inflation remained moderate compared to many global economies that experienced double-digit inflation.

2023-2024: Stabilization and Decline

The period from 2023 to 2024 marked a significant stabilization phase. Food inflation eased dramatically from 7.3% (2022) to just 2.1% (2023-2024), contributing to the overall decline in headline inflation to 3.1% by 2024. Core inflation remained stable around 3.4-3.5%, while energy/fuel inflation, though still elevated at 9.3%, represented a persistent challenge from global energy markets.

2025-2026: Food Price Rebound with Overall Stability

The most recent period shows food inflation rebounding to 6.4% (2025) and 5.7% (January 2026), likely due to weather patterns and agricultural production cycles. However, this has been offset by significant improvement in energy inflation (down to 4.3-4.6%) and exceptionally strong core inflation control at 2.2%, resulting in headline inflation remaining stable at 3.3%.

Core vs Non-Core Inflation Comparison (2021-2026)

💡 Policy Success Indicator

Core inflation at 2.2% is a critical indicator of effective monetary policy. Core inflation excludes volatile items like food and energy, measuring underlying price pressures in the economy. The current low core inflation demonstrates that the Bank of Tanzania's monetary policy has successfully controlled demand-driven inflation, even as certain categories like food experience temporary price increases.

Tanzania's Debt Burden: Comprehensive Analysis (2020-2025) | TICGL Economic Research

Tanzania's Debt Burden: Comprehensive Analysis (2020-2025)

Data-driven examination revealing critical fiscal sustainability challenges as national debt grows 1.74 times faster than GDP

📊 Published: February 2026

🔍 Research by TICGL Economic Team

📈 28 Data Tables • 15+ Charts

Executive Summary

Critical Findings on Tanzania's Fiscal Trajectory

This comprehensive report analyzes Tanzania's national debt crisis from 2020 to 2025, integrating multiple data sources to provide a complete picture of the country's fiscal trajectory. The analysis reveals a troubling trend: Tanzania's national debt has grown 65.8% over the period while GDP expanded by only 38.0%, resulting in a debt-to-GDP ratio increase from 41.27% to 49.59%.

🚨 Critical Alert

This represents debt accumulation at nearly 1.74 times the rate of economic growth, raising serious sustainability concerns despite official reassurances. Tanzania is approaching the IMF's 55% danger threshold, with just 5.4 percentage points of buffer remaining.

Key Finding

Over the five-year period, national debt increased by USD 17.21 billion while GDP grew by USD 24.07 billion. The debt-to-GDP ratio climbed 8.32 percentage points, from 41.27% to 49.59%. From 2021-2024, debt consistently grew faster than GDP every single year, with the differential ranging from 3.8 to 7.0 percentage points.

Debt Growth vs GDP Growth: A Widening Gap (2020-2025)

⚠️ Sustainability Threshold Alert

At 49.59%, Tanzania is just 5.4 percentage points below the IMF's 55% sustainability threshold for developing economies. The country is also approaching the critical 18% debt service-to-revenue threshold, currently at 14.5%.

Section 1

Macroeconomic Overview (2020-2025)

This section examines the fundamental economic indicators that frame Tanzania's debt sustainability challenge, including GDP growth, debt accumulation patterns, and the critical debt-to-GDP ratio trajectory.

Table 1: GDP, National Debt, and Debt-to-GDP Ratio (2020-2025)

Year	GDP (USD Billion)	National Debt (USD Billion)	Debt-to-GDP Ratio (%)	Debt Change (YoY)	GDP Change (YoY)
2020	$63.37	$26.15	41.27%	—	—
2021	$67.84	$29.85	44.00%	+14.2%	+7.1%
2022	$72.95	$33.92	46.50%	+13.6%	+7.5%
2023	$76.66	$37.29	48.64%	+9.9%	+5.1%
2024	$80.14	$39.61	49.43%	+6.2%	+4.5%
2025	$87.44	$43.36	49.59%	+8.5%	+9.1%
Total Change	+$24.07B (+38.0%)	+$17.21B (+65.8%)	+8.32 pp	—	—

Sources: Statista (2020-2023), SECO Economic Report (2023-2024), IMF (2025 projections)

Debt-to-GDP Ratio Trajectory: Approaching IMF Threshold

Critical Observation

From 2021-2024, debt consistently grew faster than GDP every single year, with the differential ranging from 3.8 to 7.0 percentage points. Only in 2025 did GDP growth (9.1%) marginally exceed debt growth (8.5%), potentially signaling a turning point—but this remains a projection subject to economic conditions.

Table 2: Annual Growth Rates and Comparative Analysis (2020-2025)

Year	GDP Growth (%)	Debt Growth (%)	Growth Differential	Sustainability Trend
2020-2021	+7.1%	+14.2%	-7.1 pp	⚠️ Deteriorating
2021-2022	+7.5%	+13.6%	-6.1 pp	⚠️ Deteriorating
2022-2023	+5.1%	+9.9%	-4.8 pp	⚠️ Deteriorating
2023-2024	+4.5%	+6.2%	-1.7 pp	⚠️ Deteriorating
2024-2025	+9.1%	+8.5%	+0.6 pp	✓ Improving

Annual Growth Rate Differential: Debt vs GDP

Table 3: Reconciliation of Debt Figures (USD Billions)

Year	Calculated Debt (Debt-to-GDP Method)	Official Reported Debt (BoT/MoF)	Variance	Variance %
2020	$26.15	$31.50	-$5.35	-17.0%
2021	$29.85	$34.20	-$4.35	-12.7%
2022	$33.92	$36.80	-$2.88	-7.8%
2023	$37.29	$38.91	-$1.62	-4.2%
2024	$39.61	$42.57	-$2.96	-6.9%
2025 (Mid-year)	$43.36	$42.58	+$0.78	+1.8%
2025 (Dec - Latest)	$43.36	$50.85	-$7.49	-14.7%

🚨 Late 2025 Borrowing Surge Detected

The December 2025 figure of TZS 134.9 trillion (USD 50.85 billion) suggests substantial additional borrowing in the second half of 2025 that exceeds IMF projections. This represents a $7.49 billion variance from calculated debt levels, indicating potential acceleration in debt accumulation not captured in mid-year estimates.

Important Note: The variance between calculated debt (from debt-to-GDP ratios applied to GDP) and officially reported debt figures reflects different measurement methodologies, reporting periods (fiscal vs calendar year), exchange rate fluctuations, and the inclusion/exclusion of certain debt categories.

Section 2

Comprehensive Debt Stock Analysis

A detailed examination of Tanzania's total debt stock using multiple methodologies, including the critical breakdown between external and domestic debt components.

Table 4: Total National Debt Stock - Multiple Sources (2020-2025)

Year	Method A: Debt-to-GDP × GDP	Method B: Official Reports (BoT/MoF)	Method C: TZS Converted	Best Estimate (Weighted Avg)
2020	$26.15B	$31.50B	$29.80B	$29.15B
2021	$29.85B	$34.20B	$32.50B	$32.18B
2022	$33.92B	$36.80B	$35.90B	$35.54B
2023	$37.29B	$38.91B	$38.20B	$38.13B
2024	$39.61B	$42.57B	$41.80B	$41.33B
2025 (Mid-year)	$43.36B	$42.58B	$43.00B	$42.98B
2025 (December)	$43.36B	$50.85B	$50.85B	$48.35B

Methodology Notes:

Method A: Debt-to-GDP ratio × Nominal GDP (consistent with IMF/World Bank methodology)
Method B: Official government and Bank of Tanzania reports
Method C: TZS figures converted at prevailing exchange rates
Best Estimate: Weighted average favoring official reports when available

Total Debt Stock: Multiple Measurement Methods

Table 5: External vs Domestic Debt Breakdown (2020-2025)

Year	Total Debt (USD Billion)	External Debt (USD Billion)	External %	Domestic Debt (USD Billion)	Domestic %
2020	$31.50	$25.58	81.2%	$5.92	18.8%
2021	$34.20	$27.14	79.4%	$7.06	20.6%
2022	$36.80	$33.60	91.3%	$3.20	8.7%
2023	$38.91	$28.88	74.2%	$10.03	25.8%
2024	$42.57	$29.27	68.7%	$13.30	31.3%
2025 (Mid-year)	$42.58	$28.00	65.8%	$14.58	34.2%
2025 (December)	$50.85	$37.31	73.4%	$13.54	26.6%

Debt Composition: External vs Domestic (2020-2025)

Critical Trends Identified

External Debt Volatility: External debt peaked at 91.3% in 2022, then dropped to 65.8% by mid-2025, before surging back to 73.4% by year-end
Domestic Debt Expansion: Domestic debt more than doubled from USD 5.92B (2020) to USD 13.30B (2024), reflecting increased internal borrowing
Structural Shift (2022-2023): A major composition change occurred, with domestic debt jumping from 8.7% to 25.8% in one year
Late 2025 Borrowing Surge: The Q4 2025 external debt increase of USD 8.27 billion suggests significant new external borrowing

🚨 Q4 2025 External Debt Spike

External debt increased from $28.00B (mid-2025) to $37.31B (December 2025) — a massive $9.31 billion increase in just six months. This represents a 33.3% surge in external obligations, raising concerns about the sustainability of new borrowing commitments and their terms.

2020 Debt Composition

2025 Debt Composition

Section 3

Debt Service and Fiscal Pressure Analysis

This section examines the escalating burden of debt service obligations and their impact on Tanzania's fiscal capacity, revealing alarming trends in the proportion of government revenue consumed by debt repayment.

Table 6: Comprehensive Debt Service Obligations (2020-2025)

Year	Debt Service (TZS Trillion)	Debt Service (USD Billion)	YoY Growth (%)	As % of GDP	Per Capita (USD)
2020	TZS 2.30	$1.00	—	1.58%	$16.95
2021	TZS 3.15	$1.36	+37.0%	2.01%	$22.58
2022	TZS 4.20	$1.79	+33.3%	2.45%	$29.09
2023	TZS 5.80	$2.30	+38.1%	3.00%	$36.51
2024	TZS 7.20	$2.88	+24.1%	3.59%	$44.44
2025	TZS 8.30	$3.12	+15.3%	3.57%	$46.86
Total Growth	+TZS 6.0T (+259%)	+$2.12B (+212%)	—	+1.99 pp	+$29.91

Sources: Bank of Tanzania, Ministry of Finance Budget Documents, IMF Article IV Consultations

🚨 Alarming Escalation

Debt service has grown from TZS 2.3 trillion to TZS 8.3 trillion (259% increase) while GDP grew only 38%, meaning debt service is consuming an increasingly large share of economic output and government revenue. Per capita debt service burden has nearly tripled from $16.95 to $46.86.

Debt Service Escalation (2020-2025)

Table 7: Debt Service as Percentage of Government Revenue (2020-2025)

Year	Government Revenue (TZS Trillion)	Debt Service (TZS Trillion)	Debt Service / Revenue (%)	Revenue Growth (%)	Risk Level
2020	TZS 16.50	TZS 2.30	13.9%	—	🟡 Moderate
2021	TZS 19.80	TZS 3.15	15.9%	+20.0%	🟡 Moderate
2022	TZS 24.20	TZS 4.20	17.4%	+22.2%	🔴 Approaching Threshold
2023	TZS 31.20	TZS 5.80	18.6%	+28.9%	🔴 Exceeded Threshold
2024	TZS 39.50	TZS 7.20	18.2%	+26.6%	🔴 Exceeded Threshold
2025	TZS 57.20	TZS 8.30	14.5%	+44.8%	🟡 Below Threshold
Total Change	+TZS 40.7T (+246.7%)	+TZS 6.0T (+259%)	+0.6 pp	+164.7%	—

⚠️ Critical Threshold Alert

At 14.5% in 2025, Tanzania is approaching the 18% danger threshold established by the IMF and World Bank for debt service sustainability in low-income countries. The country exceeded this threshold in 2023 (18.6%) and 2024 (18.2%) before dropping below due to exceptional revenue growth. Beyond 18%, countries typically face significant fiscal stress and reduced capacity for essential service delivery.

Debt Service Burden: Percentage of Government Revenue

Positive Development

Government revenue has grown exceptionally well, increasing by 246.7% from TZS 16.50 trillion to TZS 57.20 trillion. This impressive revenue mobilization effort has helped Tanzania stay below the critical 18% threshold in 2025, despite the massive increase in debt service obligations. However, the sustainability of this revenue growth rate is uncertain.

Revenue Mobilization vs Debt Service Growth

Section 4

Currency Composition and Exchange Rate Risk

This section analyzes Tanzania's exposure to foreign exchange risk, examining the currency composition of external debt and quantifying the impact of shilling depreciation on debt sustainability.

Table 8: Detailed Currency Composition of External Debt (2025)

Currency	Amount (USD Billion)	Percentage of External Debt	Typical Interest Rate Range	Primary Creditors
USD	$25.29	67.8%	2.5% - 7.0%	World Bank, IMF, Commercial Banks
CNY (Chinese Yuan)	$7.09	19.0%	2.0% - 3.5%	China Exim Bank, ICBC
EUR (Euro)	$2.61	7.0%	1.5% - 3.0%	EIB, AfDB, EU Institutions
SDR (Special Drawing Rights)	$1.49	4.0%	0.5% - 1.5%	IMF
JPY (Japanese Yen)	$0.75	2.0%	0.5% - 2.0%	JICA, Japanese Banks
Other Currencies	$0.08	0.2%	Varies	Various bilateral creditors
Total External Debt	$37.31	100.0%	—	—

Sources: Bank of Tanzania Foreign Exchange Reports, IMF Currency Composition Database

🚨 Dangerous Currency Concentration

With 67.8% of external debt denominated in USD, Tanzania faces severe exchange rate vulnerability. Any depreciation of the Tanzanian Shilling against the dollar directly increases the local currency cost of debt service, creating a vicious cycle where currency weakness exacerbates fiscal pressure.

External Debt Currency Composition (2025)

Table 9: Exchange Rate Impact Analysis (2020-2025)

Year	TZS/USD Exchange Rate	Annual Depreciation (%)	External Debt (USD Billion)	Cost Increase (TZS Trillion)	Cost Increase (USD Equivalent)
2020	2,300	—	$25.58	—	—
2021	2,315	-0.7%	$27.14	TZS 0.41	$0.18
2022	2,330	-0.6%	$33.60	TZS 0.50	$0.22
2023	2,520	-8.2%	$28.88	TZS 5.49	$2.18
2024	2,500	+0.8%	$29.27	TZS -0.59	$-0.24
2025	2,653	-6.1%	$37.31	TZS 5.71	$2.15
Total Impact	—	-15.3%	—	TZS 11.52T	$4.34B

Critical Insight

The 8.2% shilling depreciation in 2023 alone increased the local currency cost of servicing USD-denominated debt by TZS 5.49 trillion, equivalent to approximately USD 2.18 billion. The 2025 depreciation of 6.1% added another TZS 5.71 trillion in costs. This demonstrates how currency risk compounds debt sustainability challenges and can rapidly erode fiscal gains.

TZS/USD Exchange Rate and Depreciation Impact

Table 10: Currency Risk Stress Test Scenarios (2025)

Scenario	TZS Depreciation vs USD (%)	New Debt Value (TZS Trillion)	Implied Debt-to-GDP Ratio (%)	Risk Assessment
Current (Baseline)	0%	TZS 134.9	49.59%	🟢 Current State
Mild Shock	-5%	TZS 141.6	52.06%	🟡 Manageable
Moderate Shock	-10%	TZS 148.4	54.54%	🟡 Approaching Limit
Severe Shock	-15%	TZS 155.1	57.01%	🔴 Exceeded IMF Threshold
Crisis Shock	-20%	TZS 161.9	59.49%	🔴 High Distress Risk
Extreme Crisis	-30%	TZS 175.4	64.45%	🔴 Debt Crisis

🚨 Stress Test Warning

Under a severe 20% depreciation scenario (not unprecedented given historical volatility), Tanzania's debt-to-GDP ratio would spike from 49.59% to approximately 59.5%, exceeding the 55% IMF sustainability threshold for developing economies. A 15% depreciation would push the ratio to 57.01%, still above the critical threshold.

Currency Risk Stress Test: Impact on Debt-to-GDP Ratio

Section 5

Sectoral Debt Allocation and Project Analysis

This section examines how Tanzania's borrowed funds have been allocated across different economic sectors and evaluates the return on investment for major debt-financed infrastructure projects.

Table 11: External Debt by Sector with ROI Analysis (2025)

Sector	Debt Amount (USD Billion)	Percentage (%)	Expected ROI Timeline (Years)	Revenue Generation
Transport & Infrastructure	$14.92	40.0%	15-25	🟡 Long-term
Energy & Power	$5.60	15.0%	10-15	✓ Revenue-generating
Budget Support	$4.85	13.0%	—	✗ Non-productive
Water & Sanitation	$3.36	9.0%	8-12	🟡 Indirect benefits
Agriculture	$2.99	8.0%	5-10	✓ Productive
Education & Health	$2.61	7.0%	—	🟡 Social returns
ICT & Technology	$1.49	4.0%	5-8	✓ High potential
Tourism & Natural Resources	$0.75	2.0%	3-7	✓ Revenue-generating
Other Sectors	$0.74	2.0%	Varies	Mixed
Total External Debt	$37.31	100.0%	—	—

⚠️ Concerning Pattern

Over 40% of external debt (Transport + Education/Health + Budget Support) is allocated to sectors with either very long ROI timelines or no direct revenue generation. Budget Support alone accounts for 13% ($4.85B) of external debt, representing pure consumption spending that doesn't contribute to economic growth or debt repayment capacity.

External Debt Allocation by Sector (2025)

Table 12: Major Infrastructure Project Debt Performance (2020-2025)

Project	Total Debt (USD Billion)	Annual Debt Service (USD M)	Actual Revenue (USD M/year)	Revenue vs Target (%)	Performance
Standard Gauge Railway (SGR)	$11.20	$780	$390	50%	🔴 Major Underperformance
Julius Nyerere Hydropower	$2.90	$210	$245	117%	✓ Exceeding Target
Dar es Salaam BRT	$0.68	$52	$38	73%	🟡 Below Target
Bagamoyo Port (Suspended)	$0.45	$35	$0	0%	🔴 No Revenue
National Fiber Optic Backbone	$0.42	$32	$41	128%	✓ Exceeding Target
Kinyerezi Gas Power Plant	$1.20	$95	$102	107%	✓ Meeting Target
Airport Modernization Program	$0.85	$68	$55	81%	🟡 Below Target
Total Major Projects	$17.70	$1,272	$871	68.5%	—

🚨 Critical Issue - SGR Project

The flagship Standard Gauge Railway has consumed over USD 11 billion in debt but is operating at only 50% of revenue projections. With annual debt service of $780 million but generating only $390 million in revenue, the SGR creates a $390 million annual fiscal drain. This raises serious questions about the project's ability to generate sufficient returns to service its associated debt.

Major Infrastructure Projects: Revenue vs Target Performance

Mixed Performance

While some projects like the Julius Nyerere Hydropower (+17%) and National Fiber Optic Backbone (+28%) exceed revenue targets, the overall portfolio performs at only 68.5% of projections. The SGR's massive underperformance creates a $401 million annual shortfall ($780M debt service - $390M revenue) that must be covered by general tax revenue.

Project Sustainability: Annual Debt Service vs Revenue Generation

Creditor Type	Amount (USD Billion)	Percentage (%)	Avg. Interest Rate (%)	Avg. Maturity (Years)	Terms
Multilateral (Concessional)	$15.68	42.0%	1.2%	25-30	✓ Favorable
Bilateral (Concessional)	$9.70	26.0%	2.5%	15-20	✓ Favorable
Commercial (Banks & Bonds)	$11.94	32.0%	6.8%	5-10	⚠️ Expensive
Total External Debt	$37.31	100.0%	3.5%	13-18	—
Concessional Total	$25.38	68.0%	1.7%	20-25	✓ Sustainable

Year	Concessional (USD Billion)	Concessional (%)	Commercial (USD Billion)	Commercial (%)	Weighted Avg. Interest Rate
2020	$21.49	84.0%	$4.09	16.0%	2.1%
2021	$22.13	81.5%	$5.02	18.5%	2.3%
2022	$25.20	75.0%	$8.40	25.0%	3.1%
2023	$21.44	74.2%	$7.44	25.8%	3.2%
2024	$21.49	73.4%	$7.78	26.6%	3.3%
2025	$25.38	68.0%	$11.94	32.0%	3.5%
Change (2020-2025)	+$3.89B (+18.1%)	-16.0 pp	+$7.85B (+192%)	+16.0 pp	+1.4 pp

Indicator	2020	2023	2025	IMF Threshold	Risk Status
Debt-to-GDP Ratio (%)	41.3%	48.6%	49.6%	55%	🟡 Moderate
Debt-to-Revenue Ratio (%)	191%	125%	84%	200%	🟢 Low
Debt Service-to-Revenue (%)	13.9%	18.6%	14.5%	18%	🟡 Moderate
Debt Service-to-Exports (%)	14.2%	19.8%	21.5%	15%	🔴 High
Debt Service-to-GDP (%)	1.58%	3.00%	4.10%	3.5%	🟡 Moderate
External Debt-to-GDP (%)	40.4%	37.7%	42.7%	40%	🟡 Moderate
Reserves-to-Debt Service (Months)	7.2	5.8	5.0	4.0	🟢 Low
Short-term Debt (%)	8.5%	12.3%	15.8%	20%	🟢 Low

Year	IMF Risk Rating	Probability of Debt Distress	Composite Risk Score	Assessment
2020	Moderate	15-20%	3.2 / 10	🟢 Low Risk
2021	Moderate	18-23%	3.8 / 10	🟢 Low Risk
2022	Moderate	22-28%	4.5 / 10	🟡 Moderate Risk
2023	Moderate-High	28-35%	5.3 / 10	🟡 Moderate Risk
2024	Moderate-High	30-38%	5.7 / 10	🟡 Moderate-High Risk
2025	Moderate	25-32%	5.1 / 10	🟡 Moderate Risk

Purpose Category	New Debt (USD Billion)	% of Total New Debt	Expected ROI Timeline	Economic Impact
Infrastructure (Roads, Rail, Ports)	$8.95	52.0%	15-25 years	🟡 Long-term
Budget Support & Deficit Financing	$3.75	21.8%	None	✗ Non-productive
Energy & Power Generation	$1.72	10.0%	10-15 years	✓ Revenue-generating
Social Services (Health, Education)	$1.03	6.0%	20+ years	🟡 Indirect benefits
Agriculture & Rural Development	$0.86	5.0%	5-10 years	✓ Productive
Water & Sanitation	$0.52	3.0%	8-12 years	🟡 Indirect benefits
ICT & Digital Infrastructure	$0.34	2.0%	5-8 years	✓ High potential
Other	$0.04	0.2%	Varies	Mixed
Total New Debt (2020-2025)	$17.21	100.0%	—	—

Metric	2020 Value	2025 Value	Absolute Change	% Growth	Sustainability
National Debt (Best Estimate)	$29.15B	$48.35B	+$19.20B	+65.9%	⚠️ Rapid
GDP (Nominal)	$63.37B	$87.44B	+$24.07B	+38.0%	✓ Moderate
Government Revenue	TZS 16.50T	TZS 57.20T	+TZS 40.7T	+246.7%	✓ Excellent
Tax Revenue (% of GDP)	11.1%	21.2%	+10.1 pp	+91.0%	✓ Strong
Debt Service Payments	$1.00B	$3.12B	+$2.12B	+212.0%	⚠️ Alarming
Exports (Goods & Services)	$7.04B	$10.85B	+$3.81B	+54.1%	✓ Good
Foreign Reserves (Months of Imports)	5.4	5.0	-0.4	-7.4%	✓ Adequate
FDI Inflows	$1.08B	$1.45B	+$0.37B	+34.3%	🟡 Moderate

Country	Debt-to-GDP Ratio (%)	External Debt (USD Billion)	Debt Service / Revenue (%)	5-Year Debt Growth (%)	Risk Level
Burundi	72.8%	$2.45	24.5%	+89.3%	🔴 High Distress
Kenya	68.4%	$42.80	31.2%	+78.5%	🔴 High Risk
Rwanda	73.1%	$5.85	22.8%	+95.2%	🔴 High Risk
South Sudan	45.2%	$1.92	8.5%	+12.4%	🟡 Moderate
Tanzania	49.6%	$37.31	14.5%	+65.9%	🟡 Moderate Risk
Uganda	52.3%	$18.40	19.6%	+71.8%	🟡 Moderate-High
EAC Average	61.5%	—	20.2%	+68.8%	🟡 Moderate-High

Country/Region	Debt-to-GDP Ratio (%)	Debt Service / Exports (%)	Annual Debt Growth (2020-25)	IMF Classification
Ghana	88.7%	42.3%	+15.2%	🔴 In Distress
Zambia	123.4%	38.9%	+8.5%	🔴 In Default
Ethiopia	51.8%	28.4%	+9.8%	🔴 High Risk
Kenya	68.4%	27.8%	+12.6%	🔴 High Risk
Tanzania	49.6%	21.5%	+10.6%	🟡 Moderate Risk
Senegal	71.2%	25.4%	+11.8%	🔴 High Risk
Nigeria	37.3%	18.2%	+7.2%	🟢 Low Risk
Botswana	21.5%	4.8%	+3.1%	🟢 Low Risk
SSA Average (Excl. South Africa)	58.9%	23.4%	+9.8%	🟡 Moderate-High

Sector	2020 Share of GDP (%)	2025 Share of GDP (%)	Avg. Annual Growth (%)	Contribution to Total Growth	Debt Relationship
Agriculture	27.8%	24.5%	4.2%	18.5%	✓ Minimal debt
Services	42.1%	45.3%	6.8%	42.3%	✓ Self-sustaining
Industry & Manufacturing	22.5%	21.8%	5.1%	19.8%	🟡 Moderate debt
Transport & Logistics	3.8%	4.2%	7.2%	6.5%	⚠️ Heavy debt (SGR)
Construction	3.8%	4.2%	8.5%	6.8%	🟡 Debt-driven
Other	—	—	4.8%	6.1%	Mixed

Component	2020 Value (% of GDP)	2025 Value (% of GDP)	Change (pp)	Contribution to GDP Growth (%)
Private Consumption	68.5%	65.2%	-3.3 pp	38.5%
Government Spending	15.8%	18.4%	+2.6 pp	22.8%
Public Investment	8.2%	10.5%	+2.3 pp	17.2%
Private Investment	18.5%	19.8%	+1.3 pp	15.4%
Net Exports	-11.0%	-13.9%	-2.9 pp	6.1%

Scenario	2026 Debt-to-GDP	2028 Debt-to-GDP	2030 Debt-to-GDP	Probability
Optimistic Scenario 6.5% GDP growth, fiscal consolidation, concessional borrowing only	48.2%	45.8%	43.5%	20%
Baseline/IMF Scenario 5.5-6% GDP growth, gradual fiscal consolidation, mixed borrowing	50.1%	51.2%	50.8%	45%
Pessimistic Scenario 4.5% GDP growth, limited reforms, continued commercial borrowing	52.8%	56.4%	59.2%	25%
Crisis Scenario 3% GDP growth, major TZS depreciation, refinancing difficulties	55.2%	62.8%	68.5%	10%

Risk Factor	Likelihood (1-10)	Impact (1-10)	Overall Risk Score	Mitigation Status
SGR Revenue Underperformance	9	9	9.8	🔴 Critical
TZS Depreciation (>10% annually)	7	9	9.2	🔴 High
Commercial Debt Refinancing Risk	6	8	8.5	🟡 Moderate
Global Interest Rate Spike	5	7	7.8	🟡 Limited
Commodity Price Shock (Gold/Tourism)	6	7	7.5	🟡 Partial
Contingent Liabilities Materialization	4	8	7.2	🟡 Limited
Revenue Mobilization Stalling	5	7	6.8	✓ Good
Political Instability/Governance	3	8	6.2	✓ Strong
Climate Shocks (Drought/Floods)	6	5	5.5	🟡 Emerging
Regional Conflict/Security Issues	4	6	5.0	✓ Stable

Category	Estimated Value (USD Billion)	Materialization Probability	Expected Value (USD Billion)	Status
State-Owned Enterprises (SOE) Guarantees	$4.2 - $6.5	30-40%	$1.5 - $2.6	🟡 Monitoring
Public-Private Partnership (PPP) Obligations	$2.8 - $4.2	20-30%	$0.6 - $1.3	✓ Low risk
Pension Liabilities (Unfunded)	$1.5 - $2.0	50-60%	$0.8 - $1.2	🟡 Emerging
Legal Claims & Arbitration	$0.8 - $1.2	40-50%	$0.3 - $0.6	🟡 Active cases
Off-Budget Infrastructure Commitments	$0.5 - $1.0	60-70%	$0.3 - $0.7	🟡 Probable
Total Contingent Liabilities	$9.8 - $14.9	—	$3.5 - $6.4	—
Potential Debt-to-GDP Impact	+11.2% - 17.0%	—	+4.0% - 7.3%	⚠️ Significant

Reform Area	Key Actions Taken	Implementation Status (%)	Impact on Sustainability	Effectiveness
Revenue Mobilization	Tax digitalization, base broadening, TRA reforms	85%	High (+)	✓ Excellent
Expenditure Control	Budget ceilings, spending reviews, IFMIS	60%	Medium (+)	🟡 Moderate
Debt Management Strategy	Medium-term debt strategy, borrowing limits	55%	Medium (+)	🟡 Improving
SOE Restructuring	Commercialization plans, governance reforms	40%	Low (+)	🟡 Limited
Project Appraisal	Cost-benefit analysis requirements	45%	Medium (+)	🟡 Partial
Domestic Resource Mobilization	Bond market development, retail instruments	50%	Low (+)	🟡 Emerging

Conditionality	Target	2025 Actual	Compliance
Fiscal Deficit (% of GDP)	≤ 3.0%	2.8%	✓ Met
Tax Revenue (% of GDP)	≥ 18.0%	21.2%	✓ Exceeded
Non-Concessional Borrowing (USD Billion)	≤ $2.5B	$3.8B	✗ Exceeded
Foreign Reserves (Months of Imports)	≥ 4.5	5.0	✓ Met
Domestic Arrears Clearance	100%	72%	🟡 Partial
SOE Transparency (Quarterly Reports)	100%	75%	🟡 Partial

Section 13

Synthesis and Conclusions

Table 28: Summary of Key Findings

Category	Key Finding	Quantitative Measure	Assessment
Debt Accumulation Rate	Debt growing 1.74x faster than GDP	+65.8% vs +38.0%	🔴 Unsustainable
Debt-to-GDP Ratio	Approaching IMF threshold	49.59% (55% threshold)	🟡 Concerning
Debt Service Burden	Near critical threshold	14.5% of revenue (18% limit)	🟡 Manageable
Commercial Debt Share	Doubled in 5 years	32% (+192% growth)	🔴 Dangerous
Currency Concentration	Heavy USD exposure	67.8% in USD	🔴 High Risk
SGR Performance	Major underperformance	50% of revenue targets	🔴 Critical
Revenue Mobilization	Exceptional improvement	21.2% of GDP (+10.1 pp)	✓ Excellent
Foreign Reserves	Adequate coverage	5.0 months of imports	✓ Healthy
Regional Comparison	Better than EAC average	49.6% vs 61.5%	✓ Competitive
Debt Distress Risk	Increased but moderate	25-32% probability	🟡 Moderate

CORE CONCLUSION

YES, Tanzania's national debt has grown significantly faster than its economy from 2020 to 2025:

Debt increased by 65.8% (from USD 26.15B to USD 43.36B using GDP-based calculations) or by 52.8% (from USD 31.50B to USD 48.12B using official reports)
GDP grew by 38.0% (from USD 63.37B to USD 87.44B)
The gap: Debt grew at 1.74 times the rate of GDP expansion using the conservative estimate, or 1.39 times using official figures
Debt-to-GDP ratio increased from 41.27% to 49.59%, an 8.32 percentage point rise
Annual pattern: Debt outpaced GDP growth in every year from 2021-2024, with 2025 showing the first reversal (GDP +9.1% vs Debt +8.5%)

CRITICAL SUSTAINABILITY CONCERNS

🔴 HIGH RISK FACTORS

Rapid Accumulation Under Current Administration: Debt growth accelerated to $6.25 billion annually under President Samia, nearly three times the pace under President Magufuli
Dangerous Currency Concentration: 67.8% of external debt is in USD, creating severe exchange rate vulnerability
Commercial Debt Explosion: Commercial borrowing doubled from 16% to 32% of external debt, with interest rates 2-3x higher than concessional loans
Major Project Underperformance: The SGR, consuming USD 11+ billion in debt, operates at only 50% of revenue targets
Escalating Debt Service: Payments increased 212% (from USD 1.0B to USD 3.12B) while GDP grew only 38%
Exchange Rate Shocks: The 8% 2023 depreciation alone added TZS 4.34 trillion in costs; 2024's 10% decline added TZS 7.15 trillion more

🟡 MODERATE RISK FACTORS

Approaching IMF Threshold: At 49.59%, Tanzania is just 5.4 percentage points below the 55% danger zone
Debt Service Pressure: At 14.5% of revenue, approaching the 18% critical threshold
Contingent Liabilities: USD 9-14 billion in off-balance-sheet obligations could add 10-15 percentage points to debt ratio
Limited Export Base: Debt service now consumes 21.5% of exports (vs 15% threshold), constraining foreign exchange

🟢 POSITIVE MITIGATING FACTORS

Strong Revenue Growth: Tax revenue surged from 11.1% to 21.2% of GDP, among the best in Africa
Adequate Reserves: 5.0 months of import cover exceeds the 4-month minimum
GDP Growth Recovery: 2025's 9.1% growth (if sustained) could stabilize the ratio
Predominantly Concessional: 68% of debt remains at favorable terms, though declining
Regional Comparison: Tanzania's 49.59% ratio is better than Kenya (68.4%), Rwanda (73.1%), and the EAC average (61.5%)

FORWARD OUTLOOK: THREE SCENARIOS

Scenario 1: Sustainable Path

Probability: 35%

Requires: 6%+ annual GDP growth, fiscal deficit <2.5%, shift back to concessional loans, SGR revenue improvement

Outcome: Debt-to-GDP stabilizes at 48-50% by 2030

Actions needed: Strict borrowing discipline, revenue reforms continue, export diversification

Scenario 2: Continued Deterioration

Probability: 45% (MOST LIKELY)

Current trajectory: 5% GDP growth, 3% deficit, continued commercial borrowing

Outcome: Debt-to-GDP reaches 55-58% by 2028, crossing threshold

Risk: Debt distress, aid restrictions, refinancing difficulties

Scenario 3: Crisis

Probability: 20%

Triggers: Major TZS depreciation (>20%), SGR collapse, global recession, refinancing failure

Outcome: Debt-to-GDP exceeds 65%, debt restructuring required

Consequence: Economic disruption, austerity, potential IMF bailout

FINAL ASSESSMENT

Tanzania's debt situation as of 2025 can be characterized as "sustainable but deteriorating rapidly". While current indicators remain within acceptable bounds, the trajectory is deeply concerning:

✅ STRENGTHS

Current ratio (49.59%) is below the 55% threshold — but the margin is shrinking
Foreign reserves are adequate at 5.0 months of imports
Revenue mobilization is improving dramatically

❌ WEAKNESSES

Debt is growing 1.74x faster than GDP — unsustainable pace
Heavy USD exposure (67.8%) creates severe currency risk
Debt service burden rising to dangerous levels (21.5% of exports)
Major infrastructure projects underperforming — cannot service their debt
Shift to expensive commercial debt undermining sustainability

The critical question is not whether Tanzania's debt is currently unsustainable, but whether the country can reverse course before crossing the point of no return. The 2025 slowdown in debt growth (first time GDP outpaced debt) offers a narrow window of opportunity for corrective action.

Without immediate policy intervention, Tanzania is on track to join Kenya, Rwanda, and Ghana in the ranks of African countries facing debt distress by 2027-2028. With decisive reforms, the country can stabilize its debt burden and continue its development trajectory.

The choice is clear, and the time to act is now.

DATA SOURCES AND METHODOLOGY

Primary Sources:

International Monetary Fund (IMF): World Economic Outlook, Article IV Consultations, Debt Sustainability Analyses
World Bank: International Debt Statistics (IDS), World Development Indicators
Bank of Tanzania: Monthly Economic Reviews, Foreign Exchange Reports, Statistical Bulletins
Tanzania Investment Centre and Consulting Group Limited (TICGL): Economic Research Reports
Ministry of Finance and Planning: Budget Speeches, Debt Management Reports
Statista: Economic indicators and forecasts
SECO Economic Reports: Swiss State Secretariat for Economic Affairs country analyses
African Development Bank: African Economic Outlook

Methodology:

GDP figures: Calendar year nominal GDP in current USD from Statista (2020-2022), SECO (2023-2024), IMF (2025 projection)
Debt calculations: Method A uses (Debt-to-GDP ratio ÷ 100) × GDP; Method B uses official government reports
Exchange rates: Annual average TZS/USD from Bank of Tanzania
Growth rates: Year-on-year percentage change calculated as ((Current/Previous)-1)×100
Projections: Based on IMF baseline scenario with adjustments for latest available data

Report Compiled: February 2026 (using data through December 2025)
This analysis represents the most comprehensive data-driven assessment of Tanzania's debt burden available, integrating multiple authoritative sources to provide a complete picture of the country's fiscal trajectory from 2020 to 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

2. Interbank Cash Market (IBCM)

The interbank cash market continued to play a critical role in short-term liquidity redistribution among banks, closely aligned with the Central Bank Rate (CBR). The IBCM serves as a vital mechanism for banks to manage their daily liquidity positions, facilitating the efficient allocation of surplus funds from cash-rich institutions to those experiencing temporary shortfalls.

In December 2025, the IBCM witnessed extraordinary growth and deepening, reflecting enhanced banking sector confidence, improved liquidity circulation, and the effectiveness of the Bank of Tanzania's monetary policy framework. The market's performance demonstrated the financial system's maturity and the strengthening of interbank relationships.

Interbank Cash Market Activity

Market turnover in the IBCM experienced remarkable expansion during December 2025, surging to unprecedented levels that signaled robust liquidity conditions and active trading among financial institutions.

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%	—	—

Key Insight: Interbank Market Turnover

The sharp increase in turnover indicates improved liquidity circulation and stronger interbank confidence. The near-doubling of month-on-month activity (95.5% increase) and more than doubling year-on-year (115.3% increase) reflects several positive developments: enhanced trust among financial institutions, effective reverse repo operations by the Bank of Tanzania (TZS 1,419.3 billion), robust private sector credit growth (23.5%), and overall banking sector health. This exceptional growth demonstrates the IBCM's increasing importance as a liquidity management tool for Tanzania's financial institutions.

Interbank Cash Market Turnover Growth (TZS Billions)

1,616.8

Dec 2024

1,781.0

Nov 2025

3,481.9

Dec 2025

IBCM Growth Rates

Month-on-Month

+95.5%

Nearly Doubled

Year-on-Year

+115.3%

More Than Doubled

Composition of Interbank Transactions

The tenor structure of interbank transactions reveals important insights about liquidity management preferences and monetary policy alignment. The distribution of transaction tenors demonstrates how banks strategically manage their short-term funding needs in alignment with the Bank of Tanzania's policy framework.

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

Key Insight: Transaction Tenor Structure

The dominance of 7-day transactions (39.9% of total) shows alignment with the Bank of Tanzania's liquidity management framework and policy signalling horizon. This concentration reflects strategic planning by financial institutions, matching the BoT's typical open market operations cycle and the CBR signaling period. The preference for 7-day tenors over overnight funding indicates confidence in near-term liquidity positions and reduces the operational burden of daily refinancing. This maturity profile supports more stable and predictable liquidity management across the banking sector.

Interbank Transaction Tenor Distribution

Interbank Interest Rates

Interest rates in the interbank cash market remained remarkably stable and closely aligned with the Central Bank Rate (CBR), confirming effective monetary policy transmission and adequate liquidity conditions throughout December 2025.

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

Key Insight: Monetary Policy Transmission

Interbank rates remained close to the CBR, confirming effective monetary policy transmission and adequate liquidity conditions. The IBCM rate of 6.29% staying within the policy corridor of ±2 percentage points around the 5.75% CBR demonstrates that the Bank of Tanzania's monetary policy signals are effectively transmitted to the interbank market. This close alignment indicates: (1) adequate systemic liquidity without excess or scarcity, (2) successful open market operations by the BoT, (3) market confidence in the policy framework, and (4) efficient price discovery in the interbank market. The stability of rates supports predictable borrowing costs for banks and contributes to overall financial system stability.

Interbank Rate vs. Central Bank Rate

5.75%

Central Bank Rate
(Policy Anchor)

6.29%

Overall IBCM Rate
(Market Rate)

Spread: 54 basis points (within ±2pp policy corridor)

Monetary Policy Transmission Corridor

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

Can Tanzania Sustain a 10% Budget Expansion in 2026/27?

Comprehensive Analysis of Tanzania's TZS 61.9 Trillion Budget Framework

📅 Published: February 3, 2026

🏢 TICGL Economic Research

⏱️ 15 min read

🎯 Key Findings at a Glance

TZS 61.93T
Proposed 2026/27 Budget
+9.6%
Budget Increase
75.4%
Domestic Revenue Share
40.6%
Debt-to-GDP Ratio
6.3%
Projected GDP Growth 2026
✓ FEASIBLE
Overall Assessment

Tanzania's proposed TZS 61.9–61.93 trillion national budget for FY 2026/27 marks the largest fiscal framework in the country's history and represents a 9.6% increase from the TZS 56.49 trillion approved for FY 2025/26—effectively mirroring the government's stated objective of a "10% budget increase." This expansion, while substantial, is not unprecedented: it follows a 12.3% increase in 2025/26 and reflects Tanzania's consistent growth-oriented fiscal policy.

The expansion comes at a time when Tanzania's economic fundamentals show notable resilience. In 2025, Mainland GDP grew by 5.9%, exceeding earlier projections and supported by strong sectoral performance across mining (+19%), tourism (+21–22%), and construction. Inflation remained controlled at 3.5%, well within the Bank of Tanzania's 3–5% target band, while nominal GDP reached approximately USD 87.44 billion (TZS 235 trillion), reflecting robust nominal growth of 10.3% year-over-year.

A defining feature of the 2026/27 budget is its financing structure, which signals a strategic shift toward domestic resource mobilization rather than debt accumulation. Domestic revenue is projected to rise by 20% to TZS 46.69 trillion, increasing its share of total budget funding from 71.6% to 75.4%—the highest level in recent years. Meanwhile, borrowing levels remain stable at approximately TZS 15–15.5 trillion, representing only a marginal 1.6% increase from the previous year. This revenue-led growth is further supported by tax revenue expanding 26.5% to TZS 36.9 trillion, driven by improved tax administration and formalization efforts by the Tanzania Revenue Authority (TRA).

Debt sustainability indicators further reinforce the feasibility of the expansion. Tanzania's public debt-to-GDP ratio stands at 40.6%, well below the commonly used 55% risk threshold for developing economies and the 60% threshold for emerging markets. Moreover, this ratio is on a declining trajectory, aided by strong nominal GDP growth (10–12% annually) and a strategic prioritization of concessional borrowing over commercial debt—factors that help keep debt servicing costs manageable even as the budget expands.

Looking ahead, medium-term growth projections strengthen the case for sustainability. GDP growth is forecast to reach 6.3% in 2026 and average nearly 6.9% between 2026 and 2029, driven by large-scale infrastructure projects including the Julius Nyerere Hydropower Project (JNHP), Standard Gauge Railway (SGR) expansion, and accelerating LNG exploration. These investments, combined with sectoral diversification and a focus on industrialization under Tanzania's Fifth Development Plan (FYDP IV), position the economy for sustained expansion.

However, sustainability is not guaranteed and depends on effective risk management. Declining development partner grants (down 44.8% to TZS 563.1 billion), climate-related shocks affecting agriculture (which contributes 26% of GDP and employs 65% of the workforce), and post-election political tensions following the disputed 2025 elections pose potential headwinds. Global commodity price volatility and external economic conditions also add layers of uncertainty.

In sum, the proposed 10% budget expansion is occurring in a context of solid growth, rising domestic revenue capacity, controlled inflation, and manageable debt levels. The central issue, therefore, is not whether Tanzania can afford the expansion, but whether the government can maintain this growth trajectory while managing external risks and ensuring that fiscal resources are deployed efficiently toward productive investments that drive long-term economic transformation.

Introduction

✓ VERDICT: FEASIBLE AND SUSTAINABLE

Tanzania has proposed a record TZS 61.9–61.93 trillion budget for FY 2026/27, representing a 9.6% increase from TZS 56.49 trillion in 2025/26—effectively matching the government's stated 10% expansion target. This analysis evaluates whether this budget increase is realistic, sustainable, and aligned with Tanzania's economic performance and medium-term fiscal capacity.

5.9%

2025 GDP Growth

↑ Exceeded Target

3.5%

Inflation Rate

↓ Within Target Band

+26.5%

Tax Revenue Growth

↑ Strong Performance

55%

Debt Risk Threshold

↓ Below Limit (40.6%)

1. Budget Evolution and 10% Increase Assessment

📊 Key Insight

The proposed 2026/27 budget at TZS 61.9–61.93T is essentially a 10% increase, differing by only TZS 170-200 billion from the hypothetical TZS 62.14T target (10% above 2025/26's TZS 56.49T). This precision suggests the budget aligns closely with official fiscal guidelines.

Fiscal Year	Budget (TZS Trillion)	% Change	GDP Growth	Key Notes
2024/2025	50.29	—	5.5%	Baseline pre-election
2025/2026	56.49	+12.3%	6.0–6.1%	Infrastructure focus, elections
2026/2027 (Proposed)	61.9–61.93	+9.6%	6.3% (Projected)	Record high, largest budget ever
10% Increase Target	~62.14	+10.0%	—	Almost identical to proposal

Tanzania Budget Evolution (2024/25 - 2026/27)

Three-year budget trajectory showing consistent expansion aligned with economic growth

Budget Growth Rate Comparison

Annual percentage changes demonstrating controlled fiscal expansion

The budget trajectory reflects Tanzania's commitment to maintaining an expansionary fiscal stance while adapting to economic realities. The 2025/26 budget saw a sharp 12.3% increase to accommodate election-related expenditures and accelerated infrastructure development. The 2026/27 proposal moderates this growth to 9.6%, a rate that is more sustainable and closely aligned with projected economic expansion.

This near-perfect alignment with the 10% target is not coincidental. It demonstrates the Ministry of Finance's adherence to medium-term fiscal planning frameworks that balance growth ambitions with macroeconomic stability. The consistency also signals predictability to investors and development partners, reducing uncertainty in Tanzania's fiscal policy direction.

Revenue Source	2025/2026	2026/2027	Change
Domestic Revenue	TZS 38.9T (71.6% share)	TZS 46.69T (75.4% share)	+20.0%
↳ Tax Revenue (TRA)	TZS 29.17 trillion	TZS 36.9 trillion	+26.5%
↳ Other Revenues	TZS 9.73 trillion	TZS 9.24 trillion	-5.0%
Grants from Partners	TZS 1.02 trillion	TZS 563.1 billion	-44.8%
Total Borrowing	TZS 15.0 trillion	TZS 15.24 trillion (24.6% share)	+1.6%
↳ Development Projects	—	TZS 7.4 trillion	—
↳ Debt Repayment	—	TZS 7.8 trillion	—

Economic Indicator	2025 Performance	Context/Notes
Real GDP Growth (Mainland)	5.9%	Exceeded 5.5–6.0% target range
Nominal GDP	USD 87.44B (~TZS 235T)	+10.3% YoY nominal growth
Inflation Rate	3.5% average	Within 3–5% target band
Mining Sector Growth	+19%	Driven by gold, graphite, gemstones
Tourism Sector Growth	+21–22%	1.8M arrivals, USD 3.8B receipts
Forex Reserves	>USD 6.3 billion	4.9 months of import cover
Private Credit Growth	+20.3%	Strong business expansion signal
Fiscal Balance (estimated)	Revenue TZS 25.8T (15.2% GDP)	Deficit 5.2% of GDP; sustainable

4. Medium-Term Growth Trajectory (2026-2029)

🚀 Assessment: Growth Exceeds Budget Expansion

Nominal GDP growth (~10–12% including inflation) substantially exceeds the ~10% budget increase, ensuring fiscal sustainability. Budget-to-GDP ratio remains stable or improves, demonstrating that the fiscal expansion is well-aligned with economic capacity.

Period/Year	GDP Growth Rate	Key Growth Drivers
2025 (Actual)	5.9%	Mining, tourism, construction, agriculture
2026 (Projection)	6.3%	LNG exploration, SGR expansion, JNHP impact
2026–2029 Average	~6.9%	LNG, industrialization, Vision 2050 alignment

GDP Growth Projections (2025-2029)

Accelerating growth trajectory driven by major infrastructure and industrial investments

Nominal vs Real GDP Growth Comparison

Nominal GDP growth (10-12%) comfortably exceeds budget growth (~10%), ensuring fiscal sustainability

Budget-to-GDP Ratio Projection (2024-2027)

Stable or declining ratio demonstrates fiscal prudence despite budget expansion

Tanzania's medium-term growth outlook is anchored by several transformational mega-projects that are expected to significantly expand productive capacity and economic output. The Julius Nyerere Hydropower Project (JNHP), upon completion, will add 2,115 MW of electricity generation capacity—nearly doubling Tanzania's current installed capacity. This reliable and affordable power supply will unlock industrial expansion, reduce energy costs, and attract energy-intensive manufacturing investments.

The Standard Gauge Railway (SGR) expansion is progressively connecting Tanzania's economic centers with regional neighbors and ports, dramatically reducing transportation costs and transit times. Current phases link Dar es Salaam to Morogoro and are extending to Dodoma and beyond. Upon full completion, the SGR network will facilitate more efficient movement of goods (particularly agricultural products and minerals), reduce logistics costs by an estimated 40-60%, and integrate Tanzania more deeply into regional value chains.

Perhaps most transformational is Liquefied Natural Gas (LNG) development. Tanzania possesses over 57 trillion cubic feet of proven natural gas reserves, primarily offshore in the Indian Ocean. Major energy companies including Shell, Equinor, and ExxonMobil have exploration licenses and are advancing feasibility studies for LNG export facilities. If investments materialize as projected, LNG operations could begin generating substantial revenues by 2028-2029, fundamentally transforming Tanzania's fiscal landscape and export profile.

The government's Fifth Development Plan (FYDP IV), aligned with Vision 2050, emphasizes industrialization, value addition, and economic diversification. Targets include increasing manufacturing's share of GDP from ~7% to 15% by 2030, expanding agro-processing to reduce raw export dependency, and developing special economic zones (SEZs) focused on textiles, leather, pharmaceuticals, and electronics assembly. These initiatives, supported by improved infrastructure and business environment reforms, are designed to create higher-value economic activities and employment.

Critically, the 6.3% real GDP growth projection for 2026, rising to an average of 6.9% for 2026-2029, translates to approximately 10-12% nominal GDP growth when inflation (projected at 3-5%) is included. This nominal growth rate exceeds the 10% budget increase, meaning the budget-to-GDP ratio remains stable or even declines. This is the fundamental reason the fiscal expansion is sustainable: the economy is growing faster than government spending, preventing unsustainable fiscal imbalances.

🔑 Key Growth Drivers (2026-2029)

⚡ Energy Infrastructure

JNHP adding 2,115 MW capacity

🚄 Transport Connectivity

SGR expansion reducing logistics costs

⛽ LNG Development

57 TCF reserves, exports by 2028-29

🏭 Industrialization

Manufacturing target: 7% → 15% of GDP

🌾 Agro-Processing

Value addition to agricultural exports

🌍 Regional Integration

EAC and AfCFTA market access

6.9%

Avg Growth 2026-29

↑ Above Historical

10-12%

Nominal GDP Growth

↑ Exceeds Budget Growth

2,115 MW

JNHP Capacity

↑ Doubles Supply

57 TCF

Gas Reserves

↑ LNG Export Ready

Debt Indicator	Current Status	Sustainability Assessment
Public Debt-to-GDP Ratio	40.6% (2025)	✓ Well below 55% threshold; declining
Annual Borrowing Level	TZS 15–15.5T (medium-term avg)	✓ Stable; not escalating
Shift to Domestic Revenue	71.6% → 75.4% of budget	✓ Reduces external risk
Concessional Borrowing Focus	Prioritized in medium-term plan	✓ Lower debt servicing costs
Deficit Target (recent years)	~3% of GDP (targeted)	✓ Fiscally prudent; manageable

Assessment Criteria	Verdict
Economic Alignment	✓ REALISTIC: Nominal GDP growth (~10–12%) exceeds budget growth (~10%), ensuring sustainable fiscal ratios.
Financing Strategy	✓ PRUDENT: Increase funded primarily through domestic revenue mobilization (TZS 46.69T, +20%), not higher borrowing (+1.6%).
Debt Sustainability	✓ SUSTAINABLE: Debt-to-GDP ratio at 40.6%, well below 55% threshold, with declining trajectory. Borrowing stable at TZS 15–15.5T.
Economic Performance	✓ GROWTH-SUPPORTIVE: Strong 2025 baseline (5.9% growth, 3.5% inflation) supports accelerated 6.3% target for 2026, averaging 6.9% through 2029.
Policy Framework	✓ ALIGNED: Budget matches official medium-term framework (avg ~TZS 68T/year, 2026/27–2028/29) and Vision 2025/2050 goals.
Risk Outlook	⚠ MONITORED: Political tensions, aid reductions, climate/commodity volatility require vigilance, but mitigation strategies in place.

GDP Growth Rate

6.0%

↑ Projected 2025

FDI Growth

28.3%

↑ Highest in East Africa

Market Cap Growth

34%

↑ DSE 2025 Surge

Inflation Rate

3.4%

✓ Below 5% Target

Executive Summary

Tanzania's economic trajectory over the past decade raises a critical question for policymakers, investors, and development partners: Is Tanzania an emerging market, or does it still belong firmly in the frontier category?

A data-driven assessment of growth performance, macroeconomic stability, investment flows, financial market development, and infrastructure expansion suggests that Tanzania is transitioning decisively toward emerging market status, even if full recognition across all global indices has not yet been achieved.

Key Finding

Tanzania exhibits strong characteristics of an emerging market based on multiple economic indicators. The country has achieved mixed classification status: FTSE Russell classifies it as a Secondary Emerging Market (as of October 2025), while MSCI and S&P maintain Frontier Market classification.

Official Market Classifications (2025)

FTSE Russell

Secondary Emerging Market

✓ October 2025

MSCI

Frontier Market

Current

S&P

Frontier Market

Current

IMF

Emerging Market & Developing Economy

✓ EMDE

World Bank

Lower-Middle-Income Economy

Since 2020

Index Provider	Classification	Index Inclusion	Status Date
FTSE Russell	Secondary Emerging Market	FTSE Equity Country Classification	October 2025
MSCI	Frontier Market	MSCI Frontier Markets Index, MSCI Frontier Markets Africa Index	Current
S&P	Frontier Market	S&P Frontier BMI (Broad Market Index)	Current
IMF	Emerging Market & Developing Economy	-	Current
World Bank	Lower-Middle-Income Economy	-	Since 2020

Economic Growth Performance (2015-2025)

Year	GDP Growth Rate	GDP (Current USD)	GDP per Capita (USD)
2015	6.2%	-	$929
2016	6.9%	-	$966
2017	6.8%	-	$1,001
2018	7.0%	-	$1,051
2019	7.0%	-	$1,105
2020	4.5%	-	$1,077
2021	4.8%	-	$1,099
2022	4.7%	$77.55 billion	$1,208
2023	5.2%	$76.81 billion	$1,224
2024	5.6%	$75.94 billion	$1,120
2025 (Projected)	6.0%	$88-95 billion	$1,380

Key Economic FindingsTanzania averaged approximately 6% annual GDP growth from 2010-2019
Growth projected at 5.7-6.0% in 2024-2025, driven by agriculture, manufacturing, and tourism
Projections for 2025-2027 average 5.9-6.4%, outpacing most developed economies
Per capita income rose from $929 (2015) to projected $1,380 (2025) - a 49% increase

Sectoral Composition (2024-2025)

Sector	Share of GDP	Key Performance
Services	40%	Expanding with tourism and finance
Agriculture	25-28.7%	4.3% growth (Q3 2024)
Industry	28%	Manufacturing and mining leading
Mining	5%	16.6% growth (Q1 2025)
Manufacturing	6%	Moderate growth

Inflation & Macroeconomic Stability

Year	Inflation Rate (%)	Assessment
2015	5.6%	Moderate
2016	5.2%	Well-managed
2017	5.3%	Stable
2018	3.5%	Excellent control
2019	3.4%	Below target
2020	3.3%	Strong stability
2021	3.7%	Controlled
2022	4.4%	Moderate
2023	3.8%	Good control
2024	3.3%	Excellent
2025 (Projected)	3.4%	Stable outlook

Analysis: Inflation consistently below 5% target demonstrates strong monetary policy management and macroeconomic stability - a key emerging market characteristic.

Additional Stability Indicators (2024-2025)

Indicator	2024	2025 (Projected)
Fiscal Deficit (% of GDP)	2.5%	2.5%
Current Account Deficit (% of GDP)	2.6%	4.2%
Public Debt (% of GDP)	~50%	~50%
Foreign Reserves	4+ months of imports	4+ months
Central Bank Rate	5.75%	5.75%

Foreign Direct Investment (FDI) Performance

Year	FDI Inflows (USD Billion)	As % of GDP	Growth Rate
2015	$1.5	3.3%	-
2016	$1.4	2.8%	-6.7%
2017	$1.2	2.3%	-14.3%
2018	$1.1	1.9%	-8.3%
2019	$1.1	1.8%	0%
2020	$0.9	1.4%	-18.2% (COVID)
2021	$1.0	1.5%	+11.1%
2022	$1.4	1.9%	+40%
2023	$1.6	2.1%	+14.3%
2024	$1.72	2.2%	+28.3% ⭐
2025 (Projected)	$1.8	2.0%	+5.9%

Critical FDI AchievementTanzania attracted $1.72 billion in FDI in 2024, posting a 28.3% increase and ranking first in East Africa for FDI growth
The Tanzania Investment Centre registered 842 projects worth $7.7 billion in 2024, the highest investment value since 1991
FDI driven by mining, energy, infrastructure, and manufacturing sectors

Regional FDI Leadership (2024)

Country	FDI Inflows (USD Billion)	Growth Rate
Ethiopia	$3.98	+21.9%
Uganda	$3.31	+10.4%
Tanzania	$1.72	+28.3% 🏆
Kenya	$1.50	~0%
Rwanda	$0.82	+14.4%

Capital Markets Development

Dar es Salaam Stock Exchange (DSE) Performance

Metric	2023	2024	2025 (Sept/Oct)	Growth
Market Capitalization (TZS)	14.61 trillion	17.87 trillion	23.995 trillion	+34%
USD Market Cap	$6.28 billion	~$6.7 billion	$7.42 billion	+18%
Equity Turnover (TZS)	133.89 billion	228.66 billion	~686 billion	~200% (tripled)
Domestic Market Cap (TZS)	11.40 trillion	12.24 trillion	-	+7.4%

Breakthrough Performance

The DSE showed exceptional growth in 2025, with market capitalization surging 34% and turnover tripling, signaling rapidly improving financial market depth and investor confidence.

Market Maturity Assessment

Factor	Status	Impact on Classification
Foreign Ownership	No aggregate limits	✓ Supports emerging status
Market Size	$7.42 billion (growing)	⚠️ Small but expanding rapidly
Liquidity	Tripled in 2025	✓ Major improvement
Listed Companies	Limited number	⚠️ Constrains full emerging status
Regulatory Framework	Modern, investor-friendly	✓ Strong foundation

Infrastructure Development

Major Budget Allocations (2024/2025 - 2025/2026)

Category	2024/25 Budget	2025/26 Budget	Purpose
Ministry of Construction	TZS 1.42 trillion	TZS 2.28 trillion	Roads, bridges, infrastructure
Development Projects	-	TZS 2.19 trillion	Infrastructure expansion
Road Fund	TZS 599.76 billion	TZS 688.76 billion	Maintenance & construction

Key Infrastructure AchievementsAfrican Development Bank committed $2.5 billion to priority infrastructure projects, with over 70% for transport infrastructure
Julius Nyerere Hydropower Project (2,115 MW) completed in 2025
Standard Gauge Railway expansion ongoing
Port modernization at Dar es Salaam
Investments in ports and railways enhancing global trade integration

Current Road Network

Road Type	Total Kilometers	Percentage
Total Network	86,472 km	100%
Trunk Roads	12,786 km	14.8%
Regional Roads	21,105 km	24.4%
District/Urban/Feeder	52,581 km	60.8%

Emerging Market Characteristics Assessment

Comparison Against Emerging Market Criteria

Criterion	Emerging Market Standard	Tanzania Performance	Status
GDP Growth	Sustained 5%+ annually	5-6% consistently (avg. 6% 2010-2019)	✓ Strong
Inflation Control	Single-digit, stable	3.3-3.4% (below 5% target)	✓ Excellent
FDI Growth	Increasing trend	+28.3% (2024) - highest in East Africa	✓ Excellent
Per Capita Income	Rising steadily	$929 → $1,380 (2015-2025)	✓ Good
Market Capitalization	Growing substantially	+34% in 2025 to TZS 24 trillion	✓ Strong
Market Liquidity	Deep, active markets	Turnover tripled in 2025	✓ Improving
Foreign Access	Open to foreign investment	No aggregate foreign ownership limits	✓ Open
Infrastructure	Developed/developing	$2.5B AfDB + domestic investment	⚠️ Improving
Financial System	Transitioning/modern	Stock exchange, banking reforms	⚠️ Developing
Income Classification	Lower-middle to upper-middle	Lower-middle (since 2020)	⚠️ On track

Challenges & Development Areas

Challenge	Current Impact	Mitigation Efforts
Market Size	Limits full emerging status	34% market cap growth (2025)
High Population Growth (~3%)	Dilutes per capita gains	GDP outpacing population growth
Commodity Reliance	Economic vulnerability	Diversification into services, manufacturing
Infrastructure Gaps	Constrains growth potential	Major investments ongoing ($2.5B+)
Low Tax Revenue (13.1% GDP)	Fiscal constraints	Reform commissions established
Informal Economy (~50%)	Limits formal sector growth	Formalization initiatives

Final Verdict: Is Tanzania an Emerging Market?

Data-Driven Conclusion: YES

Tanzania qualifies as an emerging market based on comprehensive economic indicators and performance metrics.

Evidence Supporting Emerging Market Status:

Economic Performance: Consistent 5-6% GDP growth, outpacing developed economies
Macroeconomic Stability: Inflation below 5%, controlled debt, stable fiscal position
Investment Attractiveness: Highest FDI growth in East Africa (+28.3% in 2024)
Market Development: DSE market cap +34%, turnover tripled (2025)
Infrastructure Transformation: $2.5B+ in major projects
Rising Income Levels: Per capita income up 49% since 2015
Global Integration: Expanding trade, open investment policies
Classification Progress: FTSE Secondary Emerging status achieved (October 2025)

Market Position & Timeline Outlook

Current Status: Tanzania is transitioning from Frontier to Emerging Market status. Economically, it demonstrates clear emerging market characteristics. In equity markets, it shows "pre-emerging" or "frontier-plus" status with FTSE's Secondary Emerging classification confirming this upward trajectory.

Investment Implication: Tanzania represents a compelling opportunity for investors seeking exposure to high-growth African economies before they achieve universal emerging market recognition and associated premium valuations. The mixed classifications present a "value entry point" as the country progresses toward full emerging market status across all major indices.

Timeline Outlook: With sustained reforms, infrastructure investment, and market development, Tanzania could achieve full emerging market classification across all major indices within 5-10 years.

Vision 2050 Trajectory

Target: Upper-middle-income status by 2050

Progress Indicators:

Milestone	Status	Details
Lower-middle-income status achieved	✓ Completed	Achieved in 2020
GDP per capita growth on track	✓ On Track	$929 (2015) → $1,380 (2025)
FTSE Secondary Emerging upgrade	✓ Completed	October 2025
Infrastructure transformation	In Progress	$2.5B+ investments underway
Sustained 6%+ growth	⚠️ Critical	Need for next 25 years to 2050

Introduction

The Tanzanian Shilling (TZS) has experienced significant shifts against the US Dollar (USD) between 2021 and 2026, with exchange rate movements closely tracking global dollar dynamics and United States monetary policy decisions. This comprehensive analysis examines how the Federal Reserve's interest rate policies, global liquidity conditions, and Tanzania's domestic economic fundamentals have interacted to shape currency performance over this critical five-year period.

11-12%

Cumulative TZS Depreciation (2021-2025)

TZS 2,497-2,500

Current Rate (Mid-January 2026)

2,500-2,700

2026 Forecast Range

6.3%

Projected GDP Growth 2026

Historical Exchange Rate Performance (2021-2025)

Year-by-Year Analysis

2021-2022: Stability PeriodStable

The TZS remained remarkably stable during this period, with minimal annual changes of less than 1%. This coincided with accommodative global financial conditions following the COVID-19 pandemic, as the US Federal Reserve maintained near-zero interest rates and continued large-scale asset purchases.

Year	Average Rate (1 USD = TZS)	Lowest Rate	Highest Rate	Annual Change	Key Drivers
2021	~2,314	~2,300	~2,324	-0.5%	Stable period, minimal depreciation
2022	~2,326	~2,300	~2,342	+0.5-1%	Mild TZS weakening begins
2023	~2,422-2,510	~2,332	~2,519	+7-8%	Fed aggressive rate hikes, strongest depreciation
2024	~2,609-2,615	~2,352	~2,744	-3-4% (from 2023 avg)	High volatility, year-end strengthening (~2,445)
2025	~2,560-2,584	~2,420-2,425	~2,701	+2-3%	Moderate depreciation, mid-year peak then stabilization

The 2023 Turning Point: Federal Reserve Tightening

The year 2023 marked the most significant depreciation episode for the Tanzanian Shilling, with the currency weakening by approximately 7-8% against the USD. This sharp movement was not coincidental but directly aligned with the US Federal Reserve's aggressive monetary tightening cycle implemented to combat persistent inflation in the United States.

Transmission Mechanisms

Capital Flow Reversal: Higher US interest rates attracted capital into dollar-denominated assets, increasing the opportunity cost of holding emerging market currencies
Dollar Strengthening: The Federal Reserve's rate hikes strengthened the USD globally, creating widespread pressure on developing economy currencies
Liquidity Tightening: Global dollar liquidity contracted precisely when Tanzania needed foreign exchange for infrastructure development and economic expansion
Import Pressure: Tanzania's structural reliance on dollar-denominated imports (capital goods, fuel, intermediate inputs) intensified foreign currency demand

Key Insight: The 2023 depreciation demonstrates how emerging market currencies like the TZS remain vulnerable to external monetary shocks, even when domestic fundamentals are sound. Tanzania maintained GDP growth averaging 5-6%, inflation within the 3-5% target range, and adequate foreign reserves covering 4-4.5 months of imports, yet could not fully insulate itself from global dollar dynamics.

2024: Heightened Volatility and Market Uncertainty

The TZS/USD exchange rate exhibited unprecedented volatility in 2024, with intra-year swings ranging between TZS 2,352 and TZS 2,744 per USD—a remarkable 392 TZS range. This volatility reflected global market uncertainty surrounding the future trajectory of US monetary policy.

Market Dynamics in 2024

Policy Uncertainty: Markets began anticipating potential Federal Reserve rate cuts amid slowing global growth, creating bidirectional pressure on the USD
Year-End Recovery: By December 2024, the shilling showed signs of partial recovery, strengthening to around TZS 2,445 per USD
Sensitivity to Expectations: Exchange rate movements became increasingly driven by forward-looking expectations rather than actual policy changes
Global Risk Sentiment: Shifts in investor risk appetite created rapid capital flow reversals affecting emerging market currencies

Tanzania's Economic Development Context

Despite exchange rate pressures, Tanzania has demonstrated strong macroeconomic fundamentals throughout the 2021-2025 period, positioning the country as a resilient lower-middle-income economy transitioning toward upper-middle-income status in line with Vision 2025 and 2050 goals.

Indicator	Recent Performance	2026 Projection	Development Impact
Real GDP Growth	~5.3% (2023) → 5.5-6% (2024-2025)	6.3% (IMF)	Job creation, infrastructure expansion, poverty reduction
Inflation Rate	~3.3-3.8% (2023-2025)	3.5%	Stable purchasing power, contained import costs
Current Account Deficit	Narrowed to ~2.6-4% of GDP	Improving	Reduced external vulnerability, sustainable financing
Foreign Reserves	~4-4.5 months of imports	Stable	Buffer against shocks, policy flexibility
Public Debt	~45-49% of GDP	Manageable	Fiscal sustainability, development financing capacity

Growth Drivers

Infrastructure Development: Major investments in hydropower, railways, and transportation networks
Mining Sector: Strong gold export performance supported by favorable global prices
Tourism Recovery: Post-pandemic rebound in tourism revenue and foreign exchange earnings
Agricultural Resilience: Consistent agricultural output supporting food security and exports
Service Sector Expansion: Growing construction, financial services, and telecommunications sectors

Current Rate and 2026 Outlook

As of Mid-January 2026: The TZS/USD mid-market rate stands at approximately TZS 2,497-2,500 per USD, representing slight weakening from the 2025 year-end level of around TZS 2,460. This suggests early mild depreciation pressure in 2026, likely driven by ongoing uncertainty about US Federal Reserve policy timing and trajectory.

2026 Forecast Consensus

Source/Analysis	Predicted Range for 2026	Year-End Estimate	Key Assumptions
Trading Economics Models	~2,476 (Q1) → ~2,403 (12 months)	Potential mild strengthening	Global factors favor TZS if Fed cuts materialize
CoinCodex / Algorithmic	~2,464-2,704 (avg ~2,569)	Up to ~2,704 max	Gradual TZS weakening, bullish for USD
Gov.Capital / WalletInvestor	~2,701 mid-year → ~2,571-2,581	~2,600-2,700	Moderate depreciation (~5%)
Market Consensus	2,500-2,700	~2,600+	Fed cuts potentially capping USD strength

Most analysts converge on a TZS 2,500-2,700 range for 2026, with a likely year-end position around TZS 2,600-2,700 per USD. This implies mild continued depreciation of approximately 3-8% from current levels, though significant Fed rate cuts or strong Tanzanian investment inflows could moderate or reverse this trend.

Key Factors Influencing the TZS/USD Rate

Global Factors

US Federal Reserve Policy: The pace and magnitude of interest rate cuts remain the dominant external variable
Global Dollar Liquidity: Availability of dollar funding in international markets affects emerging market access to foreign exchange
Risk Sentiment: Global investor appetite for emerging market assets drives portfolio capital flows
Commodity Prices: Gold, oil, and agricultural commodity prices impact Tanzania's terms of trade

Domestic Factors

GDP Growth Performance: Sustained 6%+ growth creates import demand but also attracts investment
Inflation Control: Bank of Tanzania's ability to maintain 3-5% inflation supports currency stability
Export Performance: Gold exports, tourism receipts, and agricultural exports provide foreign exchange inflows
Foreign Reserve Management: Central bank interventions to smooth excessive volatility
Fiscal Prudence: Declining deficits and sustainable debt levels support investor confidence

Regional Dynamics

East African Community Integration: Regional trade patterns and currency coordination efforts
AfCFTA Implementation: African Continental Free Trade Area opportunities for export diversification
Regional Stability: Political and economic conditions in neighboring countries

Understanding Depreciation in a Development Context

It is critical to interpret the TZS depreciation not solely as economic weakness but as a complex phenomenon reflecting Tanzania's development trajectory and position in the global financial system.

Positive Aspects of Controlled Depreciation

Export Competitiveness: A weaker shilling makes Tanzanian gold, agricultural products, and tourism services more competitive in global markets
Import Substitution Incentive: Higher import costs encourage domestic production and value addition
Foreign Investment Attractiveness: Lower entry costs for foreign investors in real terms
Structural Adjustment: Exchange rate flexibility allows the economy to adjust to external shocks without depleting reserves

Risks of Excessive Depreciation

Imported Inflation: Higher costs for fuel, capital goods, and intermediate inputs can feed into domestic prices
Debt Servicing Burden: External debt denominated in USD becomes more expensive to service
Investor Confidence: Excessive volatility can deter long-term investment planning
Balance Sheet Effects: Firms with USD liabilities face increased local currency obligations

Policy Implication: The optimal approach involves allowing gradual, market-driven adjustment while using foreign reserves and monetary policy tools to prevent disorderly movements. Tanzania's maintenance of 4-4.5 months of import cover provides adequate policy space for such intervention.

Conclusion: Navigating Global Dollar Dominance

The evolution of the TZS/USD exchange rate over the 2021-2025 period provides compelling evidence that global dollar dynamics and US monetary policy have been the dominant external drivers of exchange rate movements in Tanzania. While domestic fundamentals remained broadly stable—characterized by robust GDP growth averaging 5-6%, low inflation within the 3-5% target range, and adequate foreign exchange reserves—these strengths were insufficient to fully counteract the global tightening of dollar liquidity.

The most pronounced depreciation episode in 2023, when the shilling weakened by 7-8%, coincided directly with the US Federal Reserve's aggressive interest rate hikes. This underscores how shifts in US monetary policy rapidly transmit to emerging and developing economies through capital flows, trade financing costs, and investor portfolio rebalancing. Subsequent volatility in 2024 and moderate depreciation in 2025 further illustrate that expectations surrounding future US rate cuts can significantly influence exchange rate behavior even in the absence of domestic macroeconomic instability.

Importantly, Tanzania's exchange rate depreciation should not be interpreted solely as a sign of economic weakness. Rather, it reflects a combination of structural demand for foreign exchange linked to development-driven imports, the global dominance of the US dollar, and cyclical shifts in international financial conditions. Controlled and gradual depreciation has enhanced export competitiveness in sectors such as gold, tourism, and agriculture, partially offsetting external pressures.

Looking ahead to 2026, with most forecasts placing the TZS/USD rate within the 2,500-2,700 range, the outlook will remain closely tied to the trajectory of US monetary easing, global risk sentiment, and Tanzania's ability to sustain export growth and foreign inflows. Prudent exchange rate management by the Bank of Tanzania, continued inflation control, and export diversification will be essential to mitigating excessive volatility while allowing the exchange rate to adjust in line with underlying economic fundamentals.

Critical Lesson for Developing Economies: Even with sound domestic policies, exchange rate outcomes are increasingly shaped by global monetary forces, reinforcing the need for resilience, policy flexibility, and strategic integration into the global financial system.

Introduction

Tanzania demonstrated superior inflation management in 2025, achieving an annual average of 3.3% and outperforming regional peers Kenya (4.1%) and Uganda (3.6%). Despite food inflation surging from 2.1% to 6.4%, the country maintained exceptional stability through declining core inflation (3.4% to 2.2%) and non-food inflation (3.5% to 2.0%).

3.3% 2025 Average Inflation

1st Rank in East Africa

8/12 Months as Best Performer

3.8% 2026 Forecast

1. Regional Inflation Performance Comparison (2025)

Month	Tanzania (%)	Kenya (%)	Uganda (%)	Best Performer
Jan 2025	3.1	3.3	3.6	Tanzania
Feb 2025	3.2	3.5	3.7	Tanzania
Mar 2025	3.3	3.6	3.4	Uganda
Apr 2025	3.2	4.1	3.5	Tanzania
May 2025	3.2	3.8	3.8	Tanzania
Jun 2025	3.3	3.8	3.9	Tanzania
Jul 2025	3.3	4.1	3.8	Tanzania
Aug 2025	3.4	4.5	3.8	Tanzania
Sep 2025	3.4	4.6	4.0	Tanzania
Oct 2025	3.5	4.6	3.4	Uganda
Nov 2025	3.4	4.5	3.1	Uganda
Dec 2025	3.6	4.5	3.1	Uganda
Annual Average	3.3	4.1	3.6	Tanzania

Key Insight: Tanzania ranked first (lowest inflation) in 8 out of 12 months in 2025 and was never the worst performer in any month. Kenya showed highest volatility, peaking at 4.6% in September-October 2025.

2. Tanzania's Inflation Components (December 2025)

Category	Weight (%)	12-Month Change (%)	Status
Food & Non-alcoholic Beverages	28.2	6.7	⚠️ High Pressure
Alcoholic Beverages & Tobacco	1.9	3.4	Moderate
Clothing & Footwear	10.8	2.0	✅ Well-controlled
Housing, Water, Utilities	15.1	2.3	✅ Stable
Furnishings & Household	7.9	3.0	Moderate
Health	2.5	1.3	✅ Excellent
Transport	14.1	4.1	Elevated
Information & Communication	5.4	0.5	✅ Minimal
Recreation & Culture	1.6	0.3	✅ Minimal
Education Services	2.0	2.9	Moderate
Restaurants & Accommodation	6.6	0.9	✅ Low
Core Inflation	73.9	2.5	✅ Strong Control
Non-Core Inflation	26.1	6.7	⚠️ Volatile
TOTAL - ALL ITEMS	100.0	3.6	Target Range

Critical Finding: The divergence between Core (2.5%) and Non-Core (6.7%) inflation indicates that price pressures are concentrated in volatile components rather than broad-based, suggesting effective monetary policy and underlying economic stability.

3. Historical Comparison: 2024 vs 2025 Trends

Category	2024 Average (%)	2025 Average (%)	Change (pp)	Trend
Headline Inflation	3.1	3.3	+0.2	↗️ Slight increase
Food Inflation	2.1	6.4	+4.3	⚠️ Sharp increase
Non-Food Inflation	3.5	2.0	-1.5	✅ Strong decline
Core Inflation	3.4	2.2	-1.2	✅ Significant improvement
Non-Core Inflation	2.2	6.2	+4.0	⚠️ Major increase

Key Finding: The 2025 inflation story is about divergence—volatile food and non-core items surged while core and non-food items improved dramatically. This suggests inflation is not demand-driven but rather supply-side and weather-related.

4. Investment & Competitive Advantages

Factor	Tanzania	Kenya	Uganda	Tanzania Advantage
2025 Average Inflation	3.3%	4.1%	3.6%	✅ Lowest
Stability (Std Dev)	~0.15	~0.53	~0.29	✅ Most stable
Core Inflation	2.2%	N/A	N/A	✅ Well-controlled
Months as Best Performer	8/12	0/12	4/12	✅ Clear leader
Purchasing Power	Best	Worst	Middle	✅ Investment appeal

Investment Implications

Currency Stability: Lower inflation supports Tanzanian Shilling strength
Real Returns: Better environment for fixed-income investments
Cost Competitiveness: Lower input costs for businesses operating regionally
Consumer Confidence: Stable prices support domestic demand growth

5. 2026 Inflation Projections & Forecast

Country	Baseline Forecast (%)	Range (%)	Key Sources
Tanzania	3.8	3.0 - 4.2	BoT, Trading Economics, TICGL
Kenya	4.8	4.0 - 5.2	IMF (5.2%), World Bank (5.0%)
Uganda	3.7	3.3 - 4.2	Trading Economics, Deloitte/EIU

Tanzania 2026 Quarterly Projections

Quarter	Projected Inflation (%)	Expected Trend
Q1 2026	2.7	Below 2025 average
Q2 2026	3.1	Gradual increase
Q3 2026	2.7	Stabilization
Q4 2026	2.9	Year-end stability
2026 Average	~2.9	Below 2025

Bank of Tanzania Policy Framework

Indicator	Current Status	2026 Target	Policy Stance
Policy Rate	5.75%	Maintained	Accommodative
Inflation Target	3-5%	3-5%	On target
GDP Growth	5.5-6.0%	5.5-6.0%	Supportive
Foreign Reserves	Improving	Stable	Positive

6. Risk Scenarios & Analysis for 2026

Optimistic Scenario (30% Probability)

Inflation Range: 3.0 - 3.5% | GDP Impact: 6.0%+ growth

Key Drivers: Good rainfall patterns, stable food supply, global commodity price moderation, continued strong monetary policy management.

Baseline Scenario (50% Probability)

Inflation Range: 3.5 - 4.2% | GDP Impact: 5.5-6.0% growth

Key Drivers: Normal weather conditions, Bank of Tanzania targets met, regional stability maintained, accommodative monetary policy continues.

Risk Scenario (20% Probability)

Inflation Range: 4.5 - 6.0% | GDP Impact: 4.5-5.0% growth

Key Drivers: Drought conditions, political tensions related to potential elections, global economic shocks, currency depreciation pressures.

Specific Risk Factors & Impact Assessment

Risk Factor	Impact on Inflation	Probability	Potential Addition (pp)
Drought/Agricultural Shock	Food prices surge	Medium	+1.0 to +1.5
Political Instability (Elections)	Supply disruptions	Low-Medium	+0.5 to +1.0
Global Oil Price Spike	Transport, energy costs	Medium	+0.5 to +0.8
Currency Depreciation	Import prices	Low	+0.3 to +0.5
Regional Food Shortages	Cross-border food prices	Medium	+0.5 to +1.0
Climate Events (El Niño)	Agricultural production	Medium-High	+1.0 to +2.0

7. Key Monitoring Indicators for 2026

Category	Indicators to Monitor	Impact Channel	Priority
Agriculture	Rainfall patterns, crop yields, livestock health	Direct food prices (28.2% of CPI)	Critical
Energy	Global oil prices, diesel/petrol local pricing	Transport (14.1%), utilities (5.7%)	High
Currency	TZS/USD exchange rate, foreign reserves	Import prices, goods inflation	High
Regional	EAC inflation trends, cross-border trade	Food supply, competitive pressures	Medium-High
Policy	BoT rate decisions, fiscal policy	Interest rates, demand-side	Medium
Political	Election preparations, stability	Supply chains, investor confidence	Medium

8. Strategic Recommendations

For Policymakers

Enhance Agricultural Resilience: Invest in irrigation infrastructure, storage facilities, and climate-smart agriculture to mitigate food supply shocks.
Monitor Food Supply Chains: Implement early warning systems for potential shortages and price spikes.
Maintain Policy Credibility: Keep Bank of Tanzania policy rate aligned with 3-5% inflation target band.
Build Foreign Exchange Reserves: Strengthen buffers against external shocks and currency pressures.
Ensure Political Stability: Facilitate smooth electoral processes to maintain investor confidence.

For Businesses

Leverage Tanzania's Stability: Use competitive inflation advantage in regional operations and pricing strategies.
Hedge Food Price Risks: Diversify supply chains and consider forward contracts for agricultural commodities.
Plan for 3.5-4.5% Inflation: Budget conservatively with mid-range inflation assumptions.
Monitor Q1 2026 Data: First NBS release scheduled for February 9, 2026 will set the year's tone.

For Investors

Best Risk-Adjusted Environment: Tanzania offers superior inflation stability compared to regional peers.
Fixed-Income Attractiveness: Real returns supported by low, stable inflation and 5.75% policy rate.
Currency Stability: Tanzanian Shilling better positioned than regional currencies.
Agricultural Investment Opportunities: Supply gaps present opportunities in food production and processing sectors.

Conclusion & Key Takeaways

Tanzania's 2025 Performance Highlights

✅ Best-in-class regional inflation management with 3.3% annual average
✅ Exceptional core inflation control at 2.2% (down from 3.4% in 2024)
✅ Most stable trajectory among all East African peers
⚠️ Food inflation vulnerability remains key risk at 6.4% in 2025

2026 Outlook Summary

Expected Range: 3.0-4.2% (baseline: 3.8%)
Regional Leadership: Tanzania likely to maintain best performance if no major shocks
Key Risks: Agricultural production, political stability, global commodity prices
Supportive Factors: BoT policy credibility, stable currency, improving foreign reserves

Bottom Line: Tanzania is well-positioned to maintain low and stable inflation in 2026, continuing to outperform regional peers. The combination of strong core inflation control (2.5%) and accommodative monetary policy supporting 5.5-6% GDP growth creates a favorable environment for investment and economic development. However, vigilance on food security and weather patterns remains essential.

Data Sources: National Bureau of Statistics Tanzania (NBS), Bank of Tanzania (BoT), Trading Economics, International Monetary Fund (IMF), World Bank, Tanzania Investment and Consultant Group Limited (TICGL), Deloitte/Economist Intelligence Unit (EIU)

Next Update: January 2026 NCPI Release - February 9, 2026

Report Period: November 2025

Total External Debt: USD 36.1 Billion

USD Exposure: 66.8%

Analysis Type: Macroeconomic Stability Assessment

Introduction: Key Findings

USD 24.1B

Of Tanzania's total external debt is denominated in US dollars, representing 66.8% concentration and creating significant exchange rate exposure

8.1% Appreciation

The Tanzanian shilling strengthened against the USD in November 2025, reducing the real burden of dollar-denominated debt obligations

USD 6.43B

Foreign exchange reserves provide 4.9 months of import cover and buffer against 26.7% of USD-denominated debt exposure

13.1% Growth

Export earnings reached USD 17.56 billion with strong year-on-year growth, supporting debt servicing capacity and external stability

Overview: Understanding Tanzania's External Debt Structure

Tanzania's external debt portfolio presents a critical case study in emerging market debt management. As of end-November 2025, the country's total external debt reached USD 36.1 billion, with a pronounced concentration in US dollar-denominated obligations. This analysis examines whether this currency composition poses risks to macroeconomic stability.

The dominance of the US dollar reflects Tanzania's engagement with multilateral development banks, commercial lenders, and international capital markets where the USD serves as the primary lending currency. While this structure provides access to global development financing, it also creates vulnerabilities related to exchange rate fluctuations, debt servicing pressures, and foreign exchange management.

Total External Debt

$36.1B

End-November 2025

USD Denomination

66.8%

USD 24.1 Billion

Monthly Debt Service

$109.0M

November 2025

Foreign Reserves

$6.43B

4.9 Months Cover

Currency Composition: Portfolio Breakdown Analysis

The external debt portfolio shows significant concentration in major global currencies, with the US dollar accounting for more than two-thirds of total obligations. This distribution reflects Tanzania's borrowing relationships with different creditor groups and the currency preferences of multilateral and commercial lenders.

Currency	Amount (USD Million)	Percentage Share	Economic Significance
US Dollar (USD)	24,127.7	66.8%	Dominant exposure - Primary risk factor
Euro (EUR)	6,333.6	17.5%	Moderate diversification
Japanese Yen (JPY)	3,219.0	8.9%	Bilateral development financing
Chinese Yuan (CNY)	1,334.5	3.7%	Growing partnership potential
Other Currencies	1,112.9	3.1%	Limited alternative exposure
Total External Debt	36,127.8	100.0%	Full Portfolio

Portfolio Diversification Assessment

While the US dollar dominates with 66.8% share, the portfolio demonstrates partial risk diversification through exposure to other major currencies. The combined EUR and JPY exposure of 26.4% provides some buffer against USD-specific risks, though the limited 3.7% CNY exposure suggests potential for further diversification as Tanzania deepens economic ties with China.

Exchange Rate Risk: The Primary Vulnerability

The concentration of debt in US dollars creates substantial exposure to exchange rate movements. The Tanzanian shilling's performance against the USD directly impacts the local currency value of debt obligations and debt servicing costs, making exchange rate management a critical policy priority.

Period	Exchange Rate (TZS/USD)	Year-on-Year Change	Impact Assessment
November 2024	2,662.4	-6.3% (depreciation)	Increased debt burden
November 2025	2,444.8	+8.1% (appreciation)	Reduced real debt burden

⚠️ Exchange Rate Risk Scenario

Critical Finding: A hypothetical 10% depreciation of the Tanzanian shilling would increase the TZS-equivalent value of USD-denominated external debt by approximately TZS 5.9 trillion. This scenario illustrates the scale of vulnerability associated with the 66.8% USD concentration and underscores the importance of maintaining exchange rate stability.

The 8.1% appreciation of the shilling in November 2025 demonstrates favorable exchange rate dynamics that have eased the real burden of USD debt. However, this also highlights the sensitivity of Tanzania's debt sustainability to currency movements, particularly given the size of USD-denominated obligations relative to the economy.

Debt Servicing Dynamics and Foreign Exchange Pressure

The currency composition directly influences Tanzania's debt servicing obligations and the associated demands on foreign exchange resources. Monthly debt service payments represent a significant drain on USD reserves and export earnings, with the majority of these payments linked to dollar-denominated debt.

Debt Service Component	Amount (USD Million)	Percentage of Total
Principal Repayments	75.4	69.2%
Interest Payments	33.6	30.8%
Total Debt Service (November 2025)	109.0	100.0%

With 66.8% of external debt denominated in USD, the overwhelming majority of these servicing costs are sensitive to USD exchange rate movements and depend on the availability of dollar foreign exchange. This creates sustained pressure on export performance, foreign exchange reserves management, and balance-of-payments stability.

Foreign Exchange Reserve Position

Tanzania's gross official reserves stood at USD 6.43 billion in November 2025, providing 4.9 months of import cover. While reserves covered approximately 26.7% of USD-denominated external debt, they covered only 17.8% of total external debt, highlighting limited room for maneuver during prolonged exchange rate pressure or external shocks.

Reserve Indicator	Value	Assessment
Gross Official Reserves	USD 6,432.9 million	Adequate for short-term needs
Import Cover	4.9 months	Above minimum threshold
Reserves to Total External Debt	17.8%	Limited buffer capacity
Reserves to USD Debt	26.7%	Partial coverage

External Sector Performance: Export Earnings and Trade Balance

Tanzania's ability to service USD-denominated debt depends fundamentally on export performance and the generation of foreign exchange earnings. Strong export growth in 2025 has provided critical support for debt sustainability, though persistent trade deficits indicate continued reliance on capital inflows.

External Sector Indicator	Amount (USD Million)	Year-on-Year Change
Exports of Goods & Services	17,561.5	+13.1%
Imports of Goods & Services	17,757.1	+5.3%
Trade Balance (Goods)	-4,468.9	-17.0% (improvement)
Current Account Deficit	-1,907.7	-29.0% (improvement)

✓ Positive Export Performance

The 13.1% year-on-year growth in exports represents a significant achievement, generating USD earnings that directly support debt servicing capacity. The narrowing of the current account deficit by 29% to USD 1.91 billion indicates improving external balance dynamics, though structural trade deficits remain.

Sectoral Export Composition and Concentration Risks

Tanzania's export earnings show heavy concentration in specific sectors, particularly gold mining and tourism. While these sectors generate substantial USD inflows, they also create vulnerability to external demand shocks and commodity price fluctuations.

Export Category	Amount (USD Million)	Share of Total Exports	Risk Profile
Gold	4,719.8	26.9%	High - Commodity price sensitive
Tourism (Travel)	4,036.7	23.0%	High - Demand sensitive
Transport Services	2,772.4	15.8%	Medium - Trade volume dependent
Manufactured Goods	1,530.8	8.7%	Medium - Competitive dynamics

⚠️ Export Concentration Risk

Gold and tourism together account for nearly 50% of Tanzania's total export earnings. This concentration creates dual risks: vulnerability to global gold price fluctuations and sensitivity to tourism demand shocks from economic downturns, health crises, or geopolitical events. Diversifying export sources remains a strategic priority for strengthening debt servicing capacity.

Macroeconomic Environment and Stability Indicators

Tanzania's macroeconomic environment has remained supportive of debt sustainability through 2025, with low inflation, stable monetary policy, and favorable exchange rate dynamics contributing to overall economic stability.

Macroeconomic Indicator	November 2025	November 2024	Trend
Headline Inflation	3.4%	3.0%	Stable and low
Core Inflation	2.3%	3.3%	Declining
Central Bank Rate	5.75%	-	Accommodative stance
Overall Lending Rate	15.27%	-	Stable credit conditions

✓ Favorable Inflation Environment

Low and stable inflation at 3.4% supports macroeconomic stability by maintaining the shilling's purchasing power and making USD-denominated debt more manageable in real terms. The decline in core inflation from 3.3% to 2.3% demonstrates effective monetary policy management and price stability.

Risk Assessment: Vulnerability and Mitigation Factors

The USD concentration in Tanzania's external debt creates three primary categories of risk that require careful monitoring and proactive management.

Primary Vulnerabilities

Exchange Rate Shock Risk: A 10% shilling depreciation would increase the TZS equivalent of USD debt by approximately TZS 5.9 trillion, placing immediate strain on fiscal resources and debt sustainability
Export Dependency: Debt servicing capacity heavily depends on sustained USD earnings from gold (26.9% of exports) and tourism (23.0%), creating concentration risk
Global Financial Conditions: Changes in US monetary policy affect both the USD exchange rate and potentially the cost of new USD borrowing, transmitting external shocks directly to Tanzania's debt portfolio

Mitigating Factors

Mitigating Factor	Current Status	Effectiveness
Foreign Exchange Reserves	USD 6,432.9 million (4.9 months import cover)	Adequate for short-term stability
Export Growth Rate	+13.1% year-on-year	Strong USD generation capacity
Current Account Improvement	Deficit narrowed 29% to USD 1,907.7 million	Reduced external financing needs
Shilling Performance	Appreciated 8.1% against USD	Reduced real debt burden
Controlled Debt Growth	Only +0.3% month-on-month expansion	Sustainable accumulation pace

Strategic Policy Recommendations

Based on the analysis of Tanzania's external debt currency composition, several strategic policy priorities emerge to strengthen macroeconomic stability and debt sustainability.

1. Enhanced Exchange Rate Management

The 66.8% USD exposure reinforces the critical importance of maintaining shilling stability through prudent monetary policy, effective foreign exchange market intervention, and continued reserve accumulation. Policy coordination between fiscal and monetary authorities remains essential.

2. Export Diversification Strategy

Reducing dependency on gold and tourism for USD earnings would strengthen debt servicing capacity and reduce vulnerability to sector-specific shocks. Priority areas include manufacturing exports, agricultural value addition, and services sector development.

3. Debt Portfolio Diversification

Gradually increasing the share of EUR, JPY, and CNY debt could reduce USD concentration risk. This strategy should focus on accessing concessional financing from bilateral and multilateral partners while maintaining debt sustainability thresholds.

4. Reserve Buffer Enhancement

Maintaining reserves above the current 4.9 months of import cover provides crucial protection against exchange rate volatility and external shocks. Target levels should consider both traditional metrics and debt servicing requirements.

5. Prudent Borrowing Strategy

Prioritizing concessional loans with longer maturities and grace periods helps manage refinancing risk associated with USD concentration. Careful assessment of project viability and revenue generation remains critical for new borrowing.

Conclusion: Balanced Risk Assessment

The dominance of the US dollar in Tanzania's external debt—accounting for 66.8% of a total debt stock of USD 36.1 billion as of end-November 2025—represents a structural vulnerability rather than an immediate macroeconomic crisis.

Current macroeconomic stability has been preserved by several supportive factors: the 8.1% appreciation of the Tanzanian shilling, strong export growth of 13.1%, adequate foreign exchange reserves of USD 6.43 billion providing 4.9 months of import cover, and low inflation at 3.4%. These conditions have successfully contained debt servicing pressures despite monthly external debt service payments of USD 109.0 million.

However, Tanzania's macroeconomic position remains highly sensitive to exchange rate movements and external shocks. The hypothetical scenario of a 10% shilling depreciation raising the local currency value of USD-denominated debt by approximately TZS 5.9 trillion illustrates the scale of potential vulnerability. Additionally, reliance on gold and tourism for nearly 50% of export earnings creates concentration risk that could materialize during global economic downturns or commodity price volatility.

Final Assessment: The USD dominance does not currently threaten macroeconomic stability, but it amplifies underlying risks that could emerge under less favorable conditions. Sustaining stability requires continued prudent monetary and exchange rate management, strengthening foreign exchange reserves, diversifying exports, and gradually broadening the currency composition of external borrowing toward EUR, JPY, and other alternative currencies.

Proactive management of these factors will be essential to ensure that Tanzania's external debt remains sustainable while supporting long-term development financing objectives and building economic resilience against future shocks.

Introduction

Tanzania's economy demonstrated remarkable resilience and strong performance through November 2025, with robust growth, stable inflation, and an appreciating currency. The country's macroeconomic fundamentals remain solid, supported by strong export performance, prudent fiscal management, and effective monetary policy implementation by the Bank of Tanzania.

🎯 Key Achievement: Tanzania's shilling appreciated by 8.1% year-on-year, reversing previous depreciation trends while maintaining inflation within the 3-5% target range at 3.4%.

National Debt
TZS 128.4T
+0.4% Monthly Growth
USD 51.9 billion equivalent

Shilling Exchange Rate
2,444.81
+8.1% YoY Appreciation
TZS per USD

Headline Inflation
3.4%
Within Target Range
Target: 3-5%

GDP Growth (Zanzibar)
7.1%
Above National Average
2024 Performance

1. National Debt Position

By end-November 2025, Tanzania's national debt reached approximately TZS 128.4 trillion (USD 51.9 billion), reflecting a development-financing strategy anchored largely on external resources. The debt structure demonstrates a manageable position with controlled monthly growth of 0.4%.

Debt Category	Amount (TZS Trillion)	Amount (USD Billion)	Share (%)
External Debt	90.0	36.1	69.7%
Domestic Debt	38.4	15.8	30.3%
Total National Debt	128.4	51.9	100%

Debt by Sector

Public Sector Debt

TZS 103.5T

80.5% of total debt

Private Sector Debt

TZS 24.9T

19.5% of total debt

FX Reserves Cover

4.9 Months

USD 6.43 billion

National Debt Composition

2. External Debt Currency Composition

Tanzania's external debt of USD 36.1 billion is heavily USD-denominated at 66.8%, making exchange rate stability crucial for debt servicing costs. However, partial diversification across major currencies provides risk mitigation.

Currency	Amount (USD Million)	Percentage Share
US Dollar (USD)	24,127.7	66.8%
Euro (EUR)	6,333.6	17.5%
Japanese Yen (JPY)	3,219.0	8.9%
Chinese Yuan (CNY)	1,334.5	3.7%
Other Currencies	1,112.9	3.1%

External Debt Currency Distribution

3. Tanzania Shilling Stability

The Tanzania Shilling demonstrated remarkable strength in November 2025, appreciating from TZS 2,460.54/USD in October to TZS 2,444.81/USD in November—a gain of TZS 15.73. The year-on-year appreciation of 8.1% reversed the depreciation trend observed in late 2024.

Indicator	October 2025	November 2025	Change
Average Exchange Rate (TZS/USD)	2,460.54	2,444.81	-15.73 TZS
IFEM Turnover (USD Million)	133.7	158.7	+18.7%
BoT Net FX Intervention (USD Million)	—	52.5	Net Sale
Year-on-Year Change	+8.1% Appreciation		From -6.3% in Nov 2024

Shilling Exchange Rate Trend (TZS/USD)

💡 Key Insight: The shilling's appreciation reduced imported inflation pressures and lowered the TZS-equivalent cost of USD-denominated debt servicing, contributing to overall macroeconomic stability.

4. Inflation Performance

Tanzania maintained impressive price stability in November 2025, with headline inflation at 3.4%—comfortably within the Bank of Tanzania's 3-5% target range. Core inflation remained subdued at 2.3%, indicating well-anchored demand-side pressures.

Inflation Measure	November 2024	October 2025	November 2025
Headline Inflation (%)	3.0	3.5	3.4
Core Inflation (%)	3.3	2.1	2.3
Energy, Fuel & Utilities (%)	5.7	4.0	3.8
Central Bank Rate (%)	5.75		5.75

Inflation Trends (Year-on-Year %)

5. Current Account Performance

Tanzania's external sector strengthened markedly, with the 12-month cumulative current account deficit narrowing to USD 3.43 billion—a 34.3% improvement from USD 5.22 billion in November 2024. This improvement was driven by robust export performance and strong tourism receipts.

Current Account Deficit

USD 3.43B

↓ 34.3% YoY improvement

Services Exports

USD 6.80B

12-month cumulative

Net Services Balance

USD 1.33B

Surplus position

Services Trade Performance

Service Category	Receipts (USD M)	Payments (USD M)	Share of Receipts
Travel (Tourism)	3,791.4	777.2	55.8%
Transportation	2,079.3	2,458.9	30.6%
Other Business Services	451.5	1,333.7	6.6%
Government Services	257.3	464.5	3.8%
Telecom, Computer & Information	222.6	438.6	3.2%
Total	6,802.1	5,472.9	100%

Services Receipts Composition (12 months to Nov 2025)

6. Tourism Performance & Zanzibar Growth

Tourism remained a critical pillar of Tanzania's economy, with Zanzibar recording exceptional performance. Tourist arrivals to Zanzibar reached 736,755 in the 12 months to November 2025, representing a robust 16.2% year-on-year increase.

Zanzibar Tourist Arrivals

736,755

↑ 16.2% YoY growth

Hotel Occupancy Rate

65%+

Consistent performance

Zanzibar GDP Growth

7.1%

2024 performance

Zanzibar Economic Indicators

Indicator	October 2025	November 2025	Status
Headline Inflation (%)	4.8	4.6	Declining
Food Inflation (%)	7.2	6.8	Moderating
Non-Food Inflation (%)	3.3	3.1	Stable
GDP Growth (2024)	7.1%		Above National Average

🏝️ Tourism Impact: Zanzibar's tourism sector contributed USD 3.79 billion (55.8% of total services receipts) to Tanzania's foreign exchange earnings, making it the largest single source of service exports.

7. Financial Markets Performance

Tanzania's financial markets reflected strong liquidity and investor confidence in November 2025. Government securities auctions were heavily oversubscribed, with Treasury Bills attracting 2.3× oversubscription and Treasury Bonds recording approximately 3.0× oversubscription.

Treasury Bills Performance

Indicator	Value
Total Tender Size	TZS 352.0 billion
Total Bids Received	TZS 798.4 billion
Amount Accepted	TZS 369.2 billion
Oversubscription Ratio	2.3 times
Weighted Average Yield	6.25%
Previous Month Yield	6.27%

Domestic Financing via Securities

Government Domestic Financing - November 2025

Treasury Bonds

TZS 267.7B

60.5% of total financing

Treasury Bills

TZS 175.0B

39.5% of total financing

Total Raised

TZS 442.7B

Strong domestic market

8. Domestic Debt Creditor Structure

Tanzania's government domestic debt of TZS 38.36 trillion is anchored by a stable and diversified creditor base, with institutional investors—commercial banks (28.6%) and pension funds (27.4%)—accounting for 56.0% of total holdings.

Creditor Category	Amount (TZS Billion)	Percentage Share
Commercial Banks	10,979.9	28.6%
Pension Funds	10,503.3	27.4%
Bank of Tanzania (BoT)	5,671.5	14.8%
Other Financial Institutions	5,596.8	14.6%
Retail Investors	5,609.8	14.6%
Total	38,361.3	100%

Domestic Debt Creditor Distribution

9. Key Takeaways & Policy Implications

Strengths & Opportunities

Macroeconomic Stability

Controlled inflation, appreciating currency, and adequate foreign reserves demonstrate strong fundamentals.

Tourism Recovery

Robust growth in arrivals and receipts, particularly in Zanzibar, providing crucial FX inflows.

External Sector Improvement

Current account deficit narrowed by 34.3%, driven by strong export performance.

Debt Sustainability

Moderate debt growth (0.4% monthly) and diversified creditor base support fiscal stability.

Financial Market Depth

Heavy oversubscription of government securities reflects strong investor confidence.

Monetary Policy Effectiveness

BoT's interventions successfully stabilized the shilling while maintaining accommodative stance.

Risks & Challenges

Currency Risk

High USD-denominated debt (66.8%) creates vulnerability to exchange rate fluctuations.

Food Inflation (Zanzibar)

Elevated at 6.8% due to supply constraints and import dependence.

External Debt Concentration

External debt accounts for 69.7% of total, requiring continued prudent management.

Policy Recommendation: Maintain current prudent fiscal and monetary policies, continue diversifying export base beyond tourism and minerals, and gradually increase domestic debt share to reduce FX vulnerability while supporting infrastructure development.

📋 Methodology & Data Sources

Primary Sources:

Bank of Tanzania (BoT) Monthly Economic Review - November 2025
National Bureau of Statistics (NBS) - Monthly Reports
Ministry of Finance and Planning - Debt Bulletins
Revolutionary Government of Zanzibar - Economic Statistics

Reporting Period: End-November 2025 (12-month cumulative data where indicated)

Publication Date: January 2026

128.4T
Total National Debt
Tanzanian Shillings
69.7%
External Debt Share
TZS 90.0T / USD 36.1B
30.3%
Domestic Debt Share
TZS 38.4 Trillion
0.4%
Monthly Growth Rate
Controlled Accumulation

Introduction

Tanzania's national debt stock reached approximately TZS 128.4 trillion by the end of November 2025, reflecting a strategic development financing approach heavily anchored on external resources. This comprehensive analysis reveals a debt structure characterized by external dominance at 69.7% of the total, with domestic debt providing a crucial 30.3% stabilizing buffer against foreign exchange volatility.

The debt composition demonstrates the government's continued role as the primary borrower, with the public sector accounting for TZS 103.5 trillion (80.5%) of total obligations, while private sector debt stood at TZS 24.9 trillion (19.5%). This distribution underscores the central government's strategic focus on financing critical infrastructure, social services, and transformative investments essential for Tanzania's development trajectory.

Critically, the monthly debt growth rate of 0.4% signals controlled and sustainable accumulation, a positive indicator for fiscal stability and macroeconomic management. Despite the external-heavy debt structure, sustainability risks remain well-managed through robust foreign exchange reserves covering approximately 4.9 months of imports, an expanding domestic debt market, and prudent fiscal policies maintained by the Bank of Tanzania and Ministry of Finance.

✓ Debt Sustainability Assessment

Tanzania's debt position remains manageable and sustainable under current fiscal frameworks, with moderate growth rates, adequate reserve buffers, and development-oriented borrowing strategies supporting long-term economic growth objectives.

National Debt Stock Overview

Debt Category	Amount (TZS Trillion)	USD Equivalent	Percentage Share
External Debt	90.0	USD 36.1 billion	69.7%
Domestic Debt	38.4	USD 15.4 billion	30.3%
Total National Debt	128.4	USD 51.5 billion	100.0%

Tanzania's debt architecture reveals significant reliance on external financing sources, with nearly 70% of total obligations denominated in foreign currencies. This structure reflects the country's development financing strategy, where concessional loans and development partner financing play pivotal roles in funding large-scale infrastructure projects, including transportation networks, energy facilities, and social infrastructure.

The domestic debt component, while smaller, serves as a critical stabilizing mechanism. It reduces overall foreign exchange exposure, provides diversification in funding sources, and supports the development of local capital markets. The 30.3% domestic share offers important insulation against currency depreciation risks that could otherwise amplify debt servicing costs.

External vs Domestic Debt Analysis

External Debt Profile

TZS Amount 90.0 Trillion

USD Amount $36.1 Billion

Share of Total 69.7%

Primary Use Infrastructure

Domestic Debt Profile

TZS Amount 38.4 Trillion

USD Equivalent $15.4 Billion

Share of Total 30.3%

Risk Buffer FX Protection

External Debt Characteristics

Currency Composition: Predominantly USD-denominated, with some exposure to EUR, CNY, and other currencies
Creditor Mix: Multilateral institutions (World Bank, IMF, AfDB), bilateral partners (China, Japan, development partners), and commercial lenders
Terms Structure: Mix of concessional loans with favorable interest rates and longer commercial borrowings
Exchange Rate Risk: Depreciation of TZS against USD increases repayment burden in local currency terms
Strategic Purpose: Financing large capital projects with long gestation periods and high development impact

Domestic Debt Characteristics

Instruments: Treasury bills, treasury bonds, government securities with various maturities
Currency Advantage: TZS-denominated, eliminating foreign exchange risk on these obligations
Market Development: Growing domestic capital market provides increasing absorption capacity
Investor Base: Commercial banks, pension funds, insurance companies, and individual investors
Flexibility: Easier to manage and restructure compared to external obligations

Indicator	Value	Implication
Monthly Debt Growth	0.4%	Controlled, sustainable pace
Dominant Component	External (69.7%)	Development-focused financing
FX Reserve Cover	4.9 months	Strong external buffer
Exchange Rate	~2,490 TZS/USD	Stable currency environment

Public vs Private Sector Debt Distribution

Sector	Amount (TZS Trillion)	Percentage Share	Primary Purpose
Public Sector	103.5	80.5%	Infrastructure, social services, strategic investments
Private Sector	24.9	19.5%	Business expansion, trade finance, investments
Total National Debt	128.4	100.0%	Combined development financing

The public sector's commanding 80.5% share of national debt reflects Tanzania's development model, where government-led investment drives economic transformation. This concentration is consistent with comparable emerging economies pursuing infrastructure-intensive growth strategies, where public sector borrowing finances critical projects with high social returns but long payback periods.

Public Sector Debt Utilization

Transportation Infrastructure: Roads, railways, ports, and airports facilitating economic connectivity
Energy Sector: Power generation, transmission, and distribution infrastructure
Social Services: Healthcare facilities, educational institutions, water and sanitation systems
Economic Infrastructure: Industrial parks, special economic zones, agricultural development
Digital Infrastructure: Telecommunications networks and digital government systems

Private sector debt at 19.5% represents borrowing by businesses, financial institutions, and individuals for commercial purposes. While significantly smaller than public debt, private sector external borrowing supports trade finance, business expansion, and private investment in productive sectors, complementing public sector development efforts.

Debt Sustainability Assessment

Sustainability Indicator	Current Status	Assessment	Risk Level
Debt Composition	External-heavy (69.7%)	FX exposure present	Medium
Domestic Debt Buffer	30.3% of total	Reduces currency risk	Low
Monthly Growth Rate	0.4%	Moderate, controlled	Low
FX Reserve Coverage	4.9 months imports	Strong buffer	Low
Debt Purpose	Development-oriented	Growth-enhancing	Low

✓ Positive Sustainability Factors

Growing Domestic Market: Expanding local debt market provides alternative financing and reduces FX dependency

Adequate Reserves: 4.9 months of import cover significantly exceeds the 3-month adequacy threshold

Productive Investment: Debt financing infrastructure and services with long-term growth potential

Moderate Pace: 0.4% monthly growth indicates disciplined borrowing and debt management

⚠ Risk Factors to Monitor

Exchange Rate Volatility: TZS depreciation increases local currency debt service burden on external obligations

Global Interest Rates: Rising international rates affect borrowing costs and refinancing terms

Revenue Performance: Debt sustainability depends on continued strong domestic revenue mobilization

Economic Growth: Maintaining robust GDP growth essential for manageable debt-to-GDP ratios

Tanzania's debt sustainability outlook remains positive under current macroeconomic conditions and fiscal policies. The combination of moderate debt accumulation, productive use of borrowed funds, adequate reserve buffers, and growing domestic financing capacity creates a resilient debt management framework. However, continued vigilance on exchange rate movements, global financial conditions, and revenue performance is essential.

Debt Management Strategy and Policy Framework

Tanzania's debt management approach balances development financing needs with fiscal sustainability objectives. The government, through the Ministry of Finance and Bank of Tanzania, employs several strategic mechanisms to maintain debt sustainability while funding critical national priorities.

Key Debt Management Strategies

Concessional Financing Priority: Maximizing access to low-interest, long-tenor loans from multilateral and bilateral development partners
Domestic Market Development: Strengthening local capital markets to reduce reliance on external sources
Currency Risk Management: Maintaining diverse currency composition and building FX reserves
Debt Service Optimization: Strategic timing of bond issuances and refinancing to minimize costs
Transparency and Reporting: Regular debt stock reporting and adherence to international standards
Project Selection Discipline: Rigorous appraisal ensuring borrowed funds finance high-return investments

Domestic Debt Market Evolution

The growth of Tanzania's domestic debt market from 30.3% of total debt represents a strategic achievement with multiple benefits. A deeper local capital market reduces vulnerability to external shocks, provides more flexible financing options, and supports broader financial sector development. The increasing participation of pension funds, insurance companies, and retail investors signals growing confidence in government securities.

Domestic: 30.3%

External: 69.7%

Future debt strategy aims to gradually increase the domestic share to 40-45% over the medium term, further reducing foreign exchange exposure while supporting local financial market deepening. This transition requires continued macroeconomic stability, competitive domestic interest rates, and sustained investor confidence.

Economic Context and Debt-to-GDP Analysis

Understanding Tanzania's debt position requires context of the broader economy. With GDP estimated at approximately TZS 200-210 trillion in 2025, the debt-to-GDP ratio stands around 61-64%, a level considered manageable for a developing economy pursuing infrastructure-intensive growth.

Economic Metric	Value	Implication for Debt
Nominal GDP (est.)	~TZS 205 trillion	Growing denominator improves ratios
Debt-to-GDP Ratio	~62-63%	Within sustainable range
GDP Growth Rate	6.0-6.5%	Outpacing debt growth
Revenue-to-GDP	~15-16%	Supports debt service capacity

Tanzania's GDP growth consistently exceeding 6% provides crucial debt sustainability support. When economic growth outpaces debt accumulation, debt-to-GDP ratios naturally stabilize or decline over time, even with continued borrowing for development purposes. This dynamic creates fiscal space for strategic investments while maintaining macroeconomic stability.

Comparative Regional Context

Tanzania's debt-to-GDP ratio (~62%) remains below many regional peers and well below the 70% threshold often cited for emerging markets
The composition favoring concessional external loans is more favorable than commercial debt-heavy structures seen in some countries
Strong economic growth performance (6%+) provides better debt dynamics than slower-growing economies
Productive investment focus ensures borrowed funds contribute to future revenue-generating capacity

Foreign Exchange Reserves and External Buffer

The 4.9 months of import cover provided by foreign exchange reserves represents a critical strength in Tanzania's debt sustainability framework. This substantial buffer significantly exceeds the 3-month international adequacy standard, providing protection against external shocks and confidence to international creditors.

Reserve Metric	Value	Assessment
Import Cover	4.9 months	Well above 3-month adequacy threshold
Reserve Trend	Stable to growing	Strengthening external position
External Debt Ratio	69.7% of total	Reserves provide servicing buffer
Currency Stability	Relatively stable TZS	Supports debt servicing capacity

Strong reserve levels perform multiple functions: they enable smooth debt servicing on external obligations, provide confidence to foreign investors and creditors, support currency stability, and offer protection against unexpected external shocks such as commodity price swings or global financial turbulence.

Future Outlook and Strategic Priorities

Looking ahead, Tanzania's debt management success will depend on maintaining the prudent approach evident in current data while adapting to evolving economic circumstances and opportunities. Several strategic priorities emerge from this analysis:

Short-Term Priorities (1-2 years)

Maintain moderate debt growth below 1% monthly
Continue building domestic market capacity
Preserve FX reserves above 4 months cover
Optimize debt service scheduling

Medium-Term Goals (3-5 years)

Increase domestic debt to 40-45% of total
Enhance revenue-to-GDP ratio to 18-20%
Ensure infrastructure investments boost growth
Diversify external creditor base

Long-Term Vision (5-10 years)

Achieve balanced domestic-external composition
Transition toward market-based financing
Stabilize debt-to-GDP below 60%
Build regional financial hub capacity

✓ Strengths to Build Upon

Controlled Growth: 0.4% monthly pace demonstrates disciplined borrowing

Strong Reserves: 4.9 months import cover provides substantial buffer

Productive Use: Infrastructure focus supports long-term growth

Growing Domestic Market: Reducing FX dependency over time

Robust GDP Growth: 6%+ growth outpacing debt accumulation

The combination of prudent debt management, strong economic growth, adequate reserves, and strategic investment focus positions Tanzania well for sustainable development financing. Continued attention to these fundamentals, alongside adaptive responses to global economic conditions, will be essential for maintaining this positive trajectory.

Conclusion: Manageable and Sustainable Debt Position

Tanzania's national debt stock of TZS 128.4 trillion as of end-November 2025 reflects a deliberate development financing strategy that balances growth imperatives with fiscal sustainability. The external-dominated structure (69.7%) enables access to large-scale, concessional financing for transformative infrastructure, while the growing domestic component (30.3%) provides critical currency risk mitigation.

Several factors support a positive sustainability assessment. The moderate 0.4% monthly growth rate indicates disciplined borrowing aligned with absorptive capacity. Foreign exchange reserves covering 4.9 months of imports provide a robust external buffer well above international adequacy standards. The productive, development-oriented use of borrowed funds supports future revenue generation and economic growth that outpaces debt accumulation.

The public sector's 80.5% share of total debt reflects government-led development strategy common in infrastructure-intensive growth phases. This concentration, while creating fiscal obligations, finances critical assets with long-term economic and social returns—transportation networks, energy systems, social infrastructure, and economic facilities that enhance productivity and competitiveness.

Risks exist and require ongoing attention. The external-heavy structure creates vulnerability to exchange rate fluctuations, with TZS depreciation increasing local currency debt service costs. Global interest rate trends affect borrowing conditions and refinancing costs. Revenue performance must keep pace with debt service obligations to maintain fiscal balance.

However, these risks are actively managed through strategic debt policies, reserve accumulation, domestic market development, and prudent fiscal management. The expanding domestic debt market, improving revenue mobilization, strong economic growth, and careful project selection all contribute to sustainable debt dynamics.

Looking forward, maintaining this positive trajectory requires continued policy discipline, strategic borrowing focused on high-return investments, ongoing domestic market development, and adaptive responses to global economic conditions. With these elements in place, Tanzania's debt position supports rather than constrains development ambitions, providing financing for transformative investments while preserving macroeconomic stability.

Debt Sustainability Fiscal Management External Debt Domestic Debt Development Finance Macroeconomic Stability Public Finance

Executive Summary

Historical Inflation Trends (2021-2026)

📊 Key Insight: Inflation Peak and Recovery

Detailed Historical Analysis

2021: Post-Pandemic Recovery

2022: Global Shocks and Peak Inflation

2023-2024: Stabilization and Decline

2025-2026: Food Price Rebound with Overall Stability

💡 Policy Success Indicator

🔗 Related TICGL Economic Resources

Tanzania's Debt Burden: Comprehensive Analysis (2020-2025)

Critical Findings on Tanzania's Fiscal Trajectory

Debt Growth vs GDP Growth: A Widening Gap (2020-2025)

Macroeconomic Overview (2020-2025)

Table 1: GDP, National Debt, and Debt-to-GDP Ratio (2020-2025)

Debt-to-GDP Ratio Trajectory: Approaching IMF Threshold

Table 2: Annual Growth Rates and Comparative Analysis (2020-2025)

Annual Growth Rate Differential: Debt vs GDP

Table 3: Reconciliation of Debt Figures (USD Billions)

Comprehensive Debt Stock Analysis

Table 4: Total National Debt Stock - Multiple Sources (2020-2025)

Total Debt Stock: Multiple Measurement Methods

Table 5: External vs Domestic Debt Breakdown (2020-2025)

Debt Composition: External vs Domestic (2020-2025)

2020 Debt Composition

2025 Debt Composition

Related TICGL Economic Research

Debt Service and Fiscal Pressure Analysis

Table 6: Comprehensive Debt Service Obligations (2020-2025)

Debt Service Escalation (2020-2025)

Table 7: Debt Service as Percentage of Government Revenue (2020-2025)

Debt Service Burden: Percentage of Government Revenue

Revenue Mobilization vs Debt Service Growth

Currency Composition and Exchange Rate Risk

Table 8: Detailed Currency Composition of External Debt (2025)

External Debt Currency Composition (2025)

Table 9: Exchange Rate Impact Analysis (2020-2025)

TZS/USD Exchange Rate and Depreciation Impact

Table 10: Currency Risk Stress Test Scenarios (2025)

Currency Risk Stress Test: Impact on Debt-to-GDP Ratio

Sectoral Debt Allocation and Project Analysis

Table 11: External Debt by Sector with ROI Analysis (2025)

External Debt Allocation by Sector (2025)

Table 12: Major Infrastructure Project Debt Performance (2020-2025)

Major Infrastructure Projects: Revenue vs Target Performance

Project Sustainability: Annual Debt Service vs Revenue Generation

Join TICGL's Economic Research Team

Creditor Composition and Terms Analysis

Table 13: External Debt by Creditor Type (2025)

External Debt by Creditor Type (2025)

Table 14: Shift Toward Commercial Borrowing (2020-2025)

Shift from Concessional to Commercial Debt (2020-2025)

Weighted Average Interest Rate Evolution

Debt Sustainability Indicators - Comprehensive Framework

Table 15: IMF/World Bank Debt Sustainability Indicators (2020-2025)

Key Sustainability Indicators vs IMF Thresholds (2025)

Table 16: Debt Distress Probability Analysis (2020-2025)

Probability of Debt Distress (2020-2025)

Drivers of Debt Accumulation

Table 17: Breakdown of Debt Growth by Purpose (2020-2025)

New Debt Allocation by Purpose (2020-2025)

Table 18: Debt Growth versus Economic Fundamentals (2020-2025)

Comparative Growth Rates: Debt vs Economic Fundamentals (2020-2025)

Comparative Regional Analysis

Table 19: East African Debt Comparison (2025)

East African Community: Debt-to-GDP Ratios (2025)

Table 20: Sub-Saharan Africa Debt Comparison (2025)

Sub-Saharan Africa: Debt-to-GDP Comparison (2025)

Annual Debt Accumulation: Magufuli vs Samia Era

Economic Growth Analysis and Sustainability Outlook

Table 21: Sectoral Contribution to GDP Growth (2020-2025)

Sectoral Contribution to GDP Growth (2020-2025)

Table 22: GDP Growth Decomposition (2020-2025)

Sources of GDP Growth: Debt-Financed vs Organic (2020-2025)

Table 23: Future Debt Projections and Scenarios (2026-2030)

Debt-to-GDP Projections: Alternative Scenarios (2025-2030)

Critical Risk Factors and Vulnerabilities

Table 24: Comprehensive Risk Matrix (2025)

Critical Risk Factors: Likelihood vs Impact Matrix

Table 25: Contingent Liabilities and Hidden Debt Risks (2025)