As of May 2025, Tanzania’s national debt reached TZS 107.70 trillion (approx. USD 39.88 billion), with external debt accounting for TZS 72.94 trillion (67.7%) and domestic debt at TZS 34.76 trillion (32.3%). The debt-to-GDP ratio stands at an estimated 47.8%, up from 46.9% in 2023, though projections suggest a decline to 40.84% by 2029 due to robust GDP growth. External debt is heavily exposed to currency risk, with 67.4% denominated in USD (approx. TZS 49.18 trillion), amplifying the cost of servicing amid a 3.82% depreciation of the shilling. Despite rising debt levels, the 2024 Debt Sustainability Analysis (DSA) by the IMF and government confirms that Tanzania’s debt remains sustainable, backed by USD 5.14 billion in reserves (covering 4.2 months of imports) and a narrowing fiscal deficit projected at 3.0% of GDP in 2025/26.

1. Overview of National Debt

• Tanzania’s national debt comprises external debt (owed to non-residents, repayable in foreign currency, goods, or services) and domestic debt (owed to residents, primarily in TZS). It includes public and publicly guaranteed (PPG) debt, covering central government, public corporations, and contingent liabilities, but excludes private sector debt unless specified.
• Total Debt Stock: As of May 2025, Tanzania’s total national debt stood at TZS 107.70 trillion (USD 39.88 billion at TZS 2,698.42/USD), with external debt at TZS 72.94 trillion (67.7%) and domestic debt at TZS 34.76 trillion (32.3%).
• Debt-to-GDP Ratio: The debt-to-GDP ratio was 46.9% in 2023 (), rising to an estimated 47.8% in 2024 (based on GDP of TZS 156.6 trillion in 2024, and projected debt growth). Forecasts suggest a decline to 40.84% by 2029 due to GDP growth outpacing debt accumulation.
• Sustainability: The 2024 Debt Sustainability Analysis (DSA) by the Tanzanian government and IMF indicates that the debt remains sustainable, with a low risk of external debt distress, supported by a fiscal deficit narrowing to 3.0% of GDP in 2025/26 and foreign exchange reserves covering 4.2 months of imports.

2. External Debt

• Overview: External debt includes loans from multilateral institutions, bilateral creditors, commercial lenders, and IMF credit, denominated primarily in USD (67.4%), Euro (16.6%), and Chinese Yuan (6.3%). It finances infrastructure (e.g., Standard Gauge Railway, Julius Nyerere Hydropower Plant), social services, and energy projects.
• May 2025 Figures:
  • Total External Debt: TZS 72.94 trillion (USD 27.04 billion), up from TZS 64 trillion in October 2022 () and TZS 53.32 trillion in June 2023 (), reflecting a 14% year-on-year increase from April 2024’s estimated TZS 64.1 trillion (based on USD 23.75 billion at TZS 2,698.42/USD).
  • Composition by Creditor:
    • Multilateral Institutions: ~45.7% (~TZS 33.33 trillion), led by World Bank-IDA (TZS 19.1 trillion in 2020/21,) and African Development Bank-ADF (TZS 5.5 trillion in 2020/21).
    • Commercial Creditors: ~30.5% (~TZS 22.25 trillion), including Credit Suisse AG (TZS 3.1 trillion in 2020/21,) and Standard Chartered Bank (TZS 1.6 trillion).
    • Bilateral Creditors: ~11.2% (~TZS 8.17 trillion), with Exim China at TZS 3.9 trillion in 2020/21.
    • Other: ~12.6% (~TZS 9.19 trillion), including IMF credit and other multilateral lenders.
  • Currency Composition:
    • USD: 67.4% (~TZS 49.18 trillion), increasing repayment costs due to TZS depreciation (3.82% in May 2025).
    • Euro: 16.6% (~TZS 12.11 trillion).
    • Chinese Yuan: 6.3% (~TZS 4.59 trillion).
    • Other Currencies: 9.7% (~TZS 7.08 trillion).
  • Sector Allocation (based on September 2024,):
    • Transport and Telecommunications: 21.5% (~TZS 15.68 trillion), e.g., SGR, port upgrades.
    • Social Welfare and Education: 20.8% (~TZS 15.17 trillion).
    • Energy and Mining: ~15% (~TZS 10.94 trillion), e.g., Julius Nyerere Hydropower Plant.
    • Agriculture: 5.1% (~TZS 3.72 trillion), low given its 25% GDP contribution.
    • Tourism: 1.6% (~TZS 1.17 trillion), underfunded despite 19.5% GDP contribution.
• Trends and Drivers:
  • Growth: External debt rose from TZS 47.07 trillion (USD 20.8 billion) in April 2022 () to TZS 72.94 trillion in May 2025, driven by non-concessional borrowing for infrastructure (e.g., SGR,) and increased disbursements (USD 31.43 billion disbursed, USD 5.04 billion undisbursed in September 2024,).
  • Key Projects: The 2025/26 budget allocates TZS 7.72 trillion for capital projects (), with external loans (TZS 8.68 trillion) funding energy (e.g., hydropower) and transport (e.g., SGR, Dar es Salaam port).
  • Currency Risk: The 67.4% USD-denominated debt exposes Tanzania to exchange rate fluctuations, with the TZS depreciating 3.82% annually in May 2025 (Document, Page 12). A 10% TZS depreciation could increase debt servicing by ~TZS 4.92 trillion.
• Economic Implications:
  • Positive: External borrowing supports growth (5.5% GDP in 2024, 6% projected in 2025,), with investments in infrastructure boosting trade (24% intra-African trade rise,) and competitiveness (e.g., AfCFTA,).
  • Risks: High USD exposure (67.4%) and rising commercial borrowing (30.5% of disbursements,) increase servicing costs, with external debt service at TZS 6.49 trillion in 2025/26 (). Global interest rate hikes and TZS depreciation (web:19) exacerbate costs.
  • Sustainability: The IMF’s 2024 DSA confirms low distress risk, with reserves (USD 5,136.6 million, 4.2 months import cover) and concessional loans (72.5% of external debt,) mitigating risks.elibrary.imf.orgelibrary.imf.org

3. Domestic Debt

• Overview: Domestic debt includes Treasury bonds (78.9%), Treasury bills (8.8%), and domestic arrears (1.1% of GDP in 2022/23,), held by commercial banks, pension funds, and the BoT. It finances recurrent spending (e.g., wages) and development projects.
• May 2025 Figures:
  • Total Domestic Debt: TZS 34.76 trillion (USD 12.88 billion), up from TZS 32.62 trillion in September 2024 and TZS 28.92 trillion in June 2023 (), a 6.5% increase from September 2024.
  • Composition by Creditor:
    • Commercial Banks: 28.8% (TZS 10.14 trillion, down from 29.7% in September 2024).
    • Pension Funds: 26.1% (TZS 9.20 trillion, down from 26.7%).
    • Bank of Tanzania: 20.3% (TZS 7.16 trillion, down from 20.5%).
    • Others (public institutions, private companies, individuals): 17.7% (TZS 6.24 trillion, up from 15.2%).
    • Insurance Companies: 5.2% (TZS 1.84 trillion, down from 9%).
    • BoT Special Funds: 1.8% (TZS 0.62 trillion, down from 2%).
  • Instrument Breakdown:
    • Treasury Bonds: 78.9% (TZS 27.43 trillion), preferred for long maturities.
    • Treasury Bills: 8.8% (TZS 3.06 trillion), used for short-term financing.
    • Domestic Arrears: ~1.1% of GDP (~TZS 1.72 trillion, based on 2024 GDP of TZS 156.6 trillion).
• Trends and Drivers:
  • Growth: Domestic debt rose from TZS 22.37 trillion in April 2022 () to TZS 34.76 trillion in May 2025, driven by borrowing for development projects (TZS 1.90 trillion in 2024/25,) and rollover of maturing securities (TZS 3.54 trillion).
  • Interest Rates: Treasury bill rates rose to 11.7% by March 2024 from 5.8% in March 2023, while Treasury bond yields (e.g., 20-year) increased by 2–2.9% (). Domestic debt servicing cost TZS 5.31 trillion in 2024/25.
  • Creditor Dynamics: Commercial banks (28.8%) and pension funds (26.1%) dominate, reflecting a robust domestic bond market. The BoT’s 20.3% share aligns with monetary policy (6% CBR).
• Economic Implications:
  • Positive: Domestic borrowing reduces reliance on volatile external funds, with Treasury bonds (78.9%) offering stable long-term financing (). The 2025/26 budget’s TZS 6.27 trillion domestic borrowing plan supports infrastructure.
  • Risks: Rising interest rates (11.7% for T-bills,) and arrears (TZS 1.72 trillion) strain fiscal space. High domestic debt (32.3% of total) crowds out private sector credit, with lending rates at 15.5%.
  • Sustainability: The domestic debt-to-GDP ratio (~22.2%, based on TZS 156.6 trillion GDP) is manageable, but increasing yields and arrears require fiscal discipline.

4. Economic Implications and Outlook

• Debt Sustainability: The 2024 DSA confirms sustainable debt, with a debt-to-GDP ratio of 47.8% in 2024, projected to decline to 40.84% by 2029 (). Reserves (USD 5,136.6 million, Document, Page 12) and concessional loans (72.5% of external debt,) mitigate risks. The fiscal deficit is projected at 3.0% of GDP in 2025/26.
• Economic Growth: Debt-funded projects (e.g., SGR, hydropower) drive 6% GDP growth in 2025 (), with exports (USD 16,994.7 million, Document, Page 14) and FDI (USD 3.7 billion in January–May 2025,) supporting stability.
• Risks: USD-denominated debt (67.4%) and TZS depreciation (3.82%, Document, Page 12) increase servicing costs. Low agriculture (5.1%) and tourism (1.6%) allocations () limit growth in key sectors. Geopolitical tensions and climate shocks (e.g., La Niña) pose risks.
• Outlook: The 2025/26 budget (TZS 56.49 trillion,) prioritizes revenue mobilization (16.7% of GDP) and infrastructure, with TZS 14.95 trillion in loans (TZS 8.68 trillion external, TZS 6.27 trillion domestic). Diversifying exports (e.g., manufacturing,) and reducing arrears will enhance sustainability

Tanzania National Debt - May 2025: Key Figures

Note: USD conversion based on exchange rate of TZS 2,698.42/USD (May 2025).