Tanzania's interest rate environment in November 2025 demonstrated remarkable stability while supporting sustained economic growth. The financial landscape remained balanced with modest upward adjustments reflecting healthy market dynamics rather than stress signals.
Lending rates experienced marginal increases in November 2025, reflecting robust credit demand alongside the 18.1% private-sector lending growth. The adjustments remained modest, ensuring borrowing costs stayed supportive of investment and economic expansion.
| Lending Category | Nov 2024 | Oct 2025 | Nov 2025 | Change |
|---|---|---|---|---|
| Overall Lending Rate | 15.67% | 15.19% | 15.27% | +0.08 pp |
| Short-Term Lending (≤1 year) | 15.56% | 15.50% | 15.53% | +0.03 pp |
| Negotiated Rate (Prime) | 12.77% | 12.40% | 12.61% | +0.21 pp |
The 8 basis point rise in overall lending rates signals healthy credit demand without creating barriers to investment or business expansion.
Negotiated rates at 12.61% remain 2.66 percentage points below the market average, demonstrating preferential pricing for creditworthy borrowers.
Stable lending rates continue supporting the robust 18.1% private-sector credit growth, fueling economic activity across sectors.
Deposit rates showed more pronounced increases in November 2025, particularly for time deposits. This reflects intensified competition among banks for stable, long-term funding sources despite overall ample system liquidity.
| Deposit Category | Nov 2024 | Oct 2025 | Nov 2025 | Change |
|---|---|---|---|---|
| Savings Deposit Rate | 2.69% | 2.93% | 2.88% | -0.05 pp |
| Overall Time Deposit | 8.18% | 8.36% | 8.54% | +0.18 pp |
| 12-Month Deposit Rate | 9.63% | 9.21% | 10.02% | +0.81 pp |
| Negotiated Deposit Rate | 10.14% | 11.22% | 11.67% | +0.45 pp |
The sharp 81 basis point jump in 12-month deposit rates to 10.02% significantly improves returns, encouraging financial savings mobilization.
Rising time and negotiated deposit rates signal banks are competing actively for stable funding despite adequate system liquidity.
Savings rates remained relatively flat, consistent with their high liquidity and transactional nature versus term deposits.
The narrowing of the short-term interest rate spread represents one of November's most significant developments, indicating enhanced banking sector efficiency and improved monetary policy transmission.
| Period | Interest Rate Spread | Change | Interpretation |
|---|---|---|---|
| November 2024 | 5.93% | - | Baseline |
| October 2025 | 6.28% | +0.35 pp | Temporary widening |
| November 2025 | 5.51% | -0.77 pp | Significant improvement |
Interest rate movements in November 2025 occurred within a well-anchored monetary policy framework, demonstrating effective transmission from the Bank of Tanzania's policy stance to market rates.
| Indicator | Value | Policy Significance |
|---|---|---|
| Central Bank Rate (CBR) | 5.75% | Accommodative stance anchoring market rates |
| 7-Day IBCM Rate (Average) | 6.15% | Within policy corridor, effective transmission |
| Inflation Rate | 3.4% | Well within 3-5% target range |
| Private Sector Credit Growth | 18.1% | Strong lending supporting economic expansion |
Market rates adjusted in line with monetary policy without destabilizing inflation, confirming the Bank of Tanzania's control over financial conditions.
The combination of low inflation (3.4%) and strong credit growth (18.1%) demonstrates successful policy calibration supporting growth without overheating.
The 5.75% policy rate remains supportive, with ample room for adjustment if economic conditions change, providing policy flexibility.
| Aspect | Lending Rates | Deposit Rates |
|---|---|---|
| Direction (Nov 2025) | Slight increase (+0.08 pp) | Moderate increase (+0.81 pp on 12-month) |
| Main Driver | Strong credit demand (18.1% growth) | Bank competition for stable deposits |
| Economic Impact | Supports investment and business expansion | Encourages savings mobilization |
| Risk Signal | Contained - rates remain affordable | Low - reflects healthy competition |
| Year-on-Year Trend | Down 0.40 pp from Nov 2024 | Up 0.39 pp on 12-month from Nov 2024 |
Looking ahead to early 2026, the interest rate environment is expected to remain stable with several supporting factors:
The November 2025 interest rate data paints a picture of a mature, well-functioning financial system supporting Tanzania's economic ambitions. The modest rise in lending rates reflected healthy credit demand rather than monetary tightening, while the more pronounced increases in deposit rates rewarded savers and demonstrated vibrant bank competition.
Most significantly, the narrowing interest rate spread from 6.28% to 5.51% signals improved banking sector efficiency and effective monetary policy transmission. This development, combined with low inflation at 3.4%, stable policy rates, and robust 18.1% private-sector credit growth, creates an optimal environment for sustained economic expansion.
As Tanzania advances its development agenda, this balanced interest rate environment—affordable lending supporting investment, attractive deposit rates encouraging savings, and efficient intermediation facilitating resource allocation—provides a solid foundation for continued progress toward middle-income status and beyond.
Tanzania's labor market is undergoing a transformation as the country strives to shift more of its workforce into formal employment. As of 2023, Tanzania's workforce stands at approximately 36 million people, with 28% in formal employment and 72% in informal employment. These shifts reveal opportunities for economic growth but also underscore significant challenges in formalizing informal sector employment.
Employment Landscape in Tanzania
The formal sector employs around 10.07 million individuals, with most in the private sector (9.33 million), while the public sector supports approximately 741,967 jobs. In contrast, the informal sector is vast, with around 25.95 million workers, mostly engaged in agriculture, retail, and small-scale manufacturing. This segment lacks job security and benefits, making it vulnerable to economic shifts.
Public and Private Sector Employment
In the public sector, the government allocated TZS 11.3 trillion for wages in the 2023/2024 fiscal year, supporting roles in civil service, healthcare, and education. The private sector's role is crucial, employing nearly 93% of all formal workers and contributing significantly to the national tax base. With an annual salary average of TZS 15.25 million per formal sector employee, private businesses are a vital economic force.
Informal Employment Breakdown
The informal sector is dominated by agriculture and fishing, which accounts for 65-70% of informal jobs. Retail trade employs 10-15%, followed by manufacturing, crafts, and construction. Regions like Dar es Salaam and Mwanza showcase significant informal employment, with informal rates as high as 72%, reflecting regional dependence on informal job sectors.
Key Economic Indicators and Projections
The shift from informal to formal employment involves obstacles, such as:
Tanzania’s employment dynamics are at a turning point, with formal employment showing steady growth. With careful planning, investment in infrastructure, and strategic policy reforms, Tanzania can continue to transition towards a more stable and secure labor market that benefits both the economy and the workforce.