The Bank of Tanzania's Statement of Financial Position as of September 30, 2024, reflects significant developments in the country's economic landscape. Total assets grew by 1% to TZS 25.86 trillion, driven by a 66.7% increase in loans and receivables and a 5.4% rise in foreign currency marketable securities. At the same time, advances to the government decreased by 10.6%, indicating fiscal discipline. The bank’s equity rose by 7%, with reserves growing by 7.4%, showcasing stronger financial stability. These trends highlight key aspects of Tanzania’s economic development, focusing on sustainable growth and investment stability.

Assets

• Cash and Cash Equivalents: TZS 5.88 trillion, a slight decrease from TZS 6.09 trillion in August 2024.
• Special Drawing Rights (SDRs): TZS 5.84 billion, an increase from TZS 5.74 billion the previous month.
• Gold: TZS 84.48 billion, up from TZS 79.66 billion in August, reflecting a 6% increase.
• Quota in IMF: TZS 1.46 trillion, up from TZS 1.44 trillion, representing a marginal increase.
• Foreign Currency Marketable Securities: TZS 8.54 trillion, up from TZS 8.10 trillion, showing a 5.4% increase.
• Government Securities: TZS 1.95 trillion, slightly up from TZS 1.91 trillion.
• Advances to Government: TZS 4.44 trillion, down significantly from TZS 4.96 trillion, representing a decrease of around 10.6%.
• Loans and Receivables: TZS 1.17 trillion, up from TZS 699.11 billion, indicating a notable 66.7% increase.
• Equity Investments: TZS 157.48 billion, up from TZS 140.56 billion (a 12% increase).
• Other Assets: TZS 1.06 trillion, a small decline from TZS 1.11 trillion in August.

Total Assets

• The total assets of the bank as of September 30, 2024, amounted to TZS 25.86 trillion, compared to TZS 25.61 trillion at the end of August 2024, representing a growth of 1% month-on-month.

Liabilities

• Currency in Circulation: TZS 8.47 trillion, up from TZS 8.32 trillion, an increase of 1.7%.
• Deposits from Banks and Non-Bank Financial Institutions: TZS 2.67 trillion, down slightly from TZS 2.73 trillion.
• Foreign Currency Financial Liabilities: TZS 6.11 trillion, up from TZS 5.83 trillion, indicating a 4.9% increase.
• BoT Liquidity Papers: TZS 529.73 billion, down from TZS 536.83 billion.
• IMF Related Liabilities: TZS 1.17 trillion, unchanged from the previous month.

Total Liabilities

• The total liabilities stood at TZS 22.95 trillion, compared to TZS 22.90 trillion at the end of August, showing a slight increase of 0.2%.

Equity

• Authorized and Paid-up Capital: TZS 100 billion, unchanged.
• Reserves: TZS 2.81 trillion, up from TZS 2.62 trillion, reflecting a 7.4% increase.

Total Equity

• The total equity increased to TZS 2.91 trillion from TZS 2.72 trillion, representing a growth of 7%.

Summary

• The Bank of Tanzania saw a moderate increase in both its total assets and liabilities between August and September 2024. The most notable changes were in advances to the government, which dropped by 10.6%, and loans and receivables, which rose by 66.7%. Additionally, equity growth was largely driven by an increase in reserves, marking a 7.4% rise.

Key insights into Tanzania’s economic development by reflecting the central bank’s financial activities and its role in supporting the economy

1. Increase in Foreign Currency Marketable Securities

• The growth of foreign currency marketable securities (up 5.4% from August to September 2024) indicates a higher investment in foreign assets. This reflects an increase in Tanzania's foreign reserves, which supports the country's external trade and provides a buffer against external shocks like fluctuating commodity prices or global financial instability. Strong foreign reserves are a positive signal of economic stability and can improve investor confidence.

2. Reduction in Advances to the Government

• The 10.6% decline in advances to the government (from TZS 4.96 trillion to TZS 4.44 trillion) suggests a reduction in central bank lending to the government, which could signal improved fiscal discipline or alternative sources of government funding (such as tax revenues or external financing). This is important for Tanzania's economic stability, as overreliance on central bank borrowing can lead to inflationary pressures. The reduction could also indicate that the government is focusing on sustainable debt management practices, which contributes to long-term economic growth.

3. Loans and Receivables Growth

• The 66.7% increase in loans and receivables points to a rise in lending to the private sector or other entities, which is essential for economic development. Increased credit availability can drive business investment, expand production capacity, and boost employment opportunities, thereby stimulating economic growth. This growth in loans might be supporting sectors such as agriculture, manufacturing, and services, which are critical for Tanzania’s development.

4. Growth in Currency in Circulation

• The increase in currency in circulation by 1.7% (from TZS 8.32 trillion to TZS 8.47 trillion) could indicate a growing economy with rising demand for cash as businesses expand and consumer spending increases. This is a sign of economic activity and a more robust domestic market. However, excessive currency issuance without corresponding growth in goods and services can lead to inflation, so maintaining a balance is important.

5. Stable IMF and Foreign Liabilities

• The stability of IMF-related liabilities and moderate increases in foreign currency financial liabilities suggest that Tanzania is managing its external obligations in a stable manner. This is crucial for maintaining a positive international reputation and avoiding excessive debt burdens that could slow economic progress.

6. Increase in Gold and SDRs Holdings

• The increase in gold reserves (up 6%) and Special Drawing Rights (SDRs, up 1.6%) signifies that Tanzania is strengthening its reserve assets, which enhances financial stability. These reserves can be used to support the shilling in times of exchange rate volatility or economic distress, promoting macroeconomic stability.

7. Reserves and Equity Growth

• The 7.4% increase in reserves and a 7% rise in total equity reflect the Bank of Tanzania's efforts to build a stronger financial position. Higher reserves provide a buffer for economic risks and allow the central bank to better support the economy through monetary policy, which is essential for fostering growth and controlling inflation.

Conclusion

• The Bank of Tanzania’s financial position reveals positive signs for the country's economic development. The central bank’s strategy of increasing foreign reserves, reducing government dependency on central bank advances, and expanding loans and receivables aligns with key development goals such as fostering fiscal stability, supporting private sector growth, and maintaining monetary stability. These trends support Tanzania’s long-term goals of sustainable economic growth, diversification, and poverty reduction.