#TanzaniaDebtProfile - TICGL | Tanzania Investment and Consultant Group Ltd

The Bank of Tanzania’s August 2025 review shows that Tanzania’s external debt stock stood at USD 32,955.5 million in June 2025, with the central government accounting for 85.4% (USD 28,133.7 million) and the private sector holding 14.6% (USD 4,820.6 million). By sectoral use, debt was mainly channeled into transport and telecommunications (28.6%), social welfare and education (18.5%), and energy and mining (16.7%), underscoring the focus on infrastructure and human capital development. In terms of currency composition, the debt portfolio remains highly exposed to the US dollar (69.8%), followed by the euro (18.1%), with smaller shares in the yen (5.4%) and yuan (3.2%). This structure highlights Tanzania’s reliance on public borrowing to fund long-term projects while emphasizing the importance of managing currency risk in debt servicing.

1. External Debt Stock by Borrower (June 2025)

Total external debt stock: USD 32,955.5 million.
Public sector dominates: Central Government accounts for 85.4%, while private sector holds 14.6%.

Details:

Central Government: USD 28,133.7m (85.4%)
Private Sector: USD 4,820.6m (14.6%)
Public Corporations: USD 1.3m (≈0.0%)

2. Disbursed Outstanding Debt by Use of Funds (June 2025, % Share)

Transport & telecommunications: 28.6%
Social welfare & education: 18.5%
Energy & mining: 16.7%
Agriculture: 6.4%
Industries: 5.7%
Other sectors (including finance, trade, etc.): 24.1%

3. Disbursed Outstanding Debt by Currency Composition (June 2025, % Share)

US Dollar (USD): 69.8%
Euro (EUR): 18.1%
Japanese Yen (JPY): 5.4%
Chinese Yuan (CNY): 3.2%
Other currencies: 3.5%

Table 1: External Debt Stock by Borrower (June 2025)

Borrower	Amount (USD Million)	Share (%)
Central Government	28,133.7	85.4
Private Sector	4,820.6	14.6
Public Corporations	1.3	0.0
Total	32,955.5	100

Table 2: Disbursed Outstanding Debt by Use of Funds (%)

Sector / Use of Funds	Share (%)
Transport & Telecommunications	28.6
Social Welfare & Education	18.5
Energy & Mining	16.7
Agriculture	6.4
Industries	5.7
Other Sectors	24.1
Total	100

Table 3: External Debt by Currency Composition (%)

Currency	Share (%)
US Dollar (USD)	69.8
Euro (EUR)	18.1
Japanese Yen	5.4
Chinese Yuan	3.2
Other	3.5
Total	100

Economic Implications of External Debt Profile – June 2025

1. External Debt Stock by Borrower (June 2025)

Composition: The total external debt stock is USD 32,955.5 million, with the central government holding USD 28,133.7 million (85.4%), the private sector USD 4,820.6 million (14.6%), and public corporations a negligible USD 1.3 million (0.0%).
Economic Meaning: The heavy public sector dominance (85.4%) underscores the government's role in financing large-scale infrastructure and social projects, aligning with development goals (e.g., Vision 2050 targeting a USD 1 trillion economy). This reduces private sector borrowing pressure, supporting credit growth (15.9% annually), but increases public debt servicing risks (national debt at USD 46,586.6 million). The minimal public corporation share suggests limited state-owned enterprise reliance on external funds, potentially reflecting fiscal discipline. Compared to regional peers (e.g., Kenya’s 60% public share), Tanzania's high public borrowing may enhance state-led growth but requires robust revenue mobilization (tax revenue at TZS 3,108.7 billion) to sustain.

2. Disbursed Outstanding Debt by Use of Funds (June 2025, % Share)

Allocation: Transport and telecommunications lead at 28.6%, followed by social welfare and education (18.5%), energy and mining (16.7%), agriculture (6.4%), industries (5.7%), and other sectors (24.1%).
Economic Significance: The 47.1% allocation to transport/telecoms and social sectors supports long-term growth by improving connectivity (e.g., roads, digital infrastructure) and human capital (education, health), key to Tanzania’s 6% GDP growth projection. Energy and mining (16.7%) bolster resource exports (gold at USD 3,977.6 million), while the low agriculture (6.4%) and industries (5.7%) shares may hinder diversification, a noted challenge in IMF assessments. The "other" category (24.1%) likely includes trade and finance, indicating broad sectoral support. This mix reflects a development-focused strategy, but underinvestment in agriculture (despite 27% GDP contribution) could limit rural growth and food security (stocks at 485,930.4 tonnes).

3. Disbursed Outstanding Debt by Currency Composition (June 2025, % Share)

Breakdown: USD dominates at 69.8%, followed by EUR (18.1%), JPY (5.4%), CNY (3.2%), and other currencies (3.5%).
Economic Implications: The 69.8% USD exposure heightens vulnerability to exchange rate fluctuations, especially with the TZS depreciating 1.34% to 2,666.79/USD in July 2025. A stronger dollar (e.g., amid global trade tensions) could raise debt servicing costs, straining public finances (surplus TZS 403.4 billion in June). Diversification into EUR (18.1%) and JPY (5.4%) mitigates some risk, reflecting loans from multilateral institutions (e.g., IMF, World Bank). The low CNY share (3.2%) suggests limited Chinese financing compared to peers like Zambia, potentially reducing geopolitical debt dependency. Stable reserves (USD 6,194.4 million) provide a buffer, but currency risk remains a key concern.

Summary of Broader Economic Significance

Growth and Development: The debt structure supports infrastructure and social investment, driving Tanzania’s 6% growth outlook and export resilience (USD 9,479.4 million in goods). Public sector dominance ensures state-led progress, but private sector growth (14.6%) needs nurturing to diversify the economy.
Risk Management: High USD exposure (69.8%) and public debt concentration (85.4%) pose exchange rate and fiscal risks, though reserves and a fiscal surplus offer stability. This aligns with IMF’s moderate debt distress risk assessment, but prudent management is critical.
Comparative Context: Compared to 2024 (USD 32.89 billion), the slight rise to USD 32,955.5 million reflects controlled borrowing, outperforming countries with higher debt-to-GDP ratios (e.g., Ghana at 90%). The sectoral focus mirrors successful models like Rwanda’s infrastructure drive, but agriculture underfunding lags behind peers.
Future Outlook: Sustained tax revenue growth (107.8% of target) and export inflows (e.g., tourism at USD 3,871.9 million) could offset risks, though currency diversification and private sector debt expansion are needed for long-term sustainability.

Tanzania's engagement with the International Monetary Fund (IMF) has grown significantly in 2025, reflecting its strategic reliance on IMF financing. As of July 25, 2025, Tanzania's IMF credit outstanding reached TZS 3.65 trillion (USD 1,335,730,000), a 18.98% increase from TZS 3.07 trillion (USD 1,122,630,000) on June 30, 2025, based on an exchange rate of approximately TZS 2,735 per USD (sourced from recent web data on Tanzania shilling rates). This growth, driven by TZS 0.58 trillion in disbursements with no repayments, positions Tanzania as a key player in East Africa, holding 22.07% of the region's TZS 16.55 trillion in IMF credit. Across Africa, Tanzania ranks 11th out of 54 countries, contributing 1.30% to the continent's TZS 280.87 trillion total IMF credit outstanding. This analysis examines Tanzania’s position relative to East African peers and all African countries, highlighting its financial dynamics and regional significance.

Tanzania's IMF credit outstanding as of June 30, 2025, and July 25, 2025, in Tanzania Shillings (TZS), comparing its position among East African and all African countries. Tanzania’s credit growth reflects active IMF program participation, ranking it 2nd in East Africa and 11th across Africa. Significant disbursements and zero repayments underscore its reliance on IMF support, contributing notably to regional financing dynamics.

East African Countries Analysis

The following East African countries are included in the IMF credit dataset (converted to TZS using TZS 2,735 per USD):

Tanzania: TZS 3.07 trillion → TZS 3.65 trillion
Kenya: TZS 8.27 trillion → TZS 8.27 trillion
Uganda: TZS 2.71 trillion → TZS 2.71 trillion
Rwanda: TZS 1.66 trillion → TZS 1.65 trillion
Burundi: TZS 0.27 trillion → TZS 0.27 trillion

East Africa Totals

Total as of 06/30/2025: TZS 15.98 trillion
Total Disbursements: TZS 0.58 trillion
Total Repayments: TZS 0.01 trillion
Total as of 07/25/2025: TZS 16.55 trillion

Tanzania's East African Position

Metric	Tanzania Amount	East Africa Total	Tanzania's %
Outstanding 06/30/2025	TZS 3.07 trillion	TZS 15.98 trillion	19.21%
Total Disbursements	TZS 0.58 trillion	TZS 0.58 trillion	100.00%
Total Repayments	TZS 0	TZS 0.01 trillion	0.00%
Outstanding 07/25/2025	TZS 3.65 trillion	TZS 16.55 trillion	22.07%

East African Ranking (by 07/25/2025 Outstanding)

Kenya: TZS 8.27 trillion (49.90%)
Tanzania: TZS 3.65 trillion (22.07%)
Uganda: TZS 2.71 trillion (16.40%)
Rwanda: TZS 1.65 trillion (9.96%)
Burundi: TZS 0.27 trillion (1.65%)

All African Countries Analysis

African Countries Total

Total as of 06/30/2025: TZS 278.22 trillion
Total Disbursements: TZS 3.46 trillion
Total Repayments: TZS 0.86 trillion
Total as of 07/25/2025: TZS 280.87 trillion

Tanzania's African Position

Metric	Tanzania Amount	Africa Total	Tanzania's %
Outstanding 06/30/2025	TZS 3.07 trillion	TZS 278.22 trillion	1.10%
Total Disbursements	TZS 0.58 trillion	TZS 3.46 trillion	16.86%
Total Repayments	TZS 0	TZS 0.86 trillion	0.00%
Outstanding 07/25/2025	TZS 3.65 trillion	TZS 280.87 trillion	1.30%

Top 10 African Countries by IMF Credit Outstanding

Argentina: TZS 110.11 trillion (39.18%)
Egypt: TZS 20.30 trillion (7.22%)
Ecuador: TZS 18.19 trillion (6.47%)
Pakistan: TZS 18.28 trillion (6.51%)
Cote d'Ivoire: TZS 8.49 trillion (3.02%)
Kenya: TZS 8.27 trillion (2.94%)
Bangladesh: TZS 7.99 trillion (2.84%)
Angola: TZS 7.44 trillion (2.65%)
Ghana: TZS 7.40 trillion (2.63%)
Congo, DRC: TZS 5.34 trillion (1.90%)

Tanzania ranks 11th with TZS 3.65 trillion (1.30%).

Implications for Tanzania’s Economic Development

Tanzania’s significant increase in IMF credit outstanding, from TZS 3.07 trillion to TZS 3.65 trillion between June 30 and July 25, 2025, signals a robust commitment to leveraging IMF financing to support economic development. The TZS 0.58 trillion in disbursements, representing 100% of East Africa’s IMF inflows during this period, suggests Tanzania is actively channeling these funds into priority areas. According to recent IMF reviews, Tanzania’s Extended Credit Facility (ECF) arrangements focus on fiscal consolidation, infrastructure development, and social programs to enhance economic resilience and reduce poverty. The absence of repayments indicates a strategy to maximize liquidity for ongoing projects, potentially in sectors like energy, transport, and agriculture, which are critical for Tanzania’s Vision 2025 development goals. However, this reliance on IMF credit, while boosting short-term growth, raises concerns about long-term debt sustainability, especially given Tanzania’s modest 1.30% share of Africa’s total IMF credit. Balancing these funds with domestic revenue mobilization and prudent fiscal management will be crucial to ensure sustainable economic progress.

Key Insights

Tanzania's Position

East Africa: Tanzania holds the 2nd position among 5 East African nations, trailing Kenya.
Africa: Tanzania ranks 11th out of 54 African countries, reflecting a modest continental presence.
Growth: A 18.98% increase in outstanding credit (TZS 0.58 trillion) from June 30 to July 25, 2025, highlights active IMF engagement.

Notable Points

Disbursements: Tanzania absorbed the entire TZS 0.58 trillion of East Africa’s IMF disbursements, emphasizing its reliance on new funding.
Repayments: Tanzania made no repayments, unlike Rwanda, which reduced its credit slightly.
Regional vs. Continental Share: Tanzania’s 16.86% share of African disbursements significantly exceeds its 1.30% share of total African credit.
Kenya’s Regional Leadership: Kenya dominates East Africa with TZS 8.27 trillion, nearly 50% of the region’s IMF credit.
Argentina’s Continental Dominance: Argentina’s TZS 110.11 trillion accounts for 39.18% of Africa’s total IMF credit, far surpassing other nations.

Regional Context

East Africa’s Contribution: The region represents 5.89% of Africa’s total IMF credit outstanding (TZS 280.87 trillion) as of July 25, 2025.
Tanzania’s Role: Tanzania’s 22.07% share of East African credit (TZS 16.55 trillion) contrasts with its 1.30% share of African credit, reflecting regional significance.
IMF Program Activity: Tanzania’s credit growth aligns with its Extended Credit Facility (ECF) arrangements, as noted in recent IMF reviews, signaling efforts to address fiscal or developmental challenges.

Conclusion

Tanzania’s IMF credit outstanding grew by 18.98% from TZS 3.07 trillion to TZS 3.65 trillion between June 30 and July 25, 2025, driven by TZS 0.58 trillion in disbursements and no repayments. Ranking 2nd in East Africa and 11th in Africa, Tanzania plays a pivotal regional role while maintaining a modest continental footprint. Its 100% share of East African disbursements underscores active IMF engagement, likely tied to economic stabilization or development goals. Continued monitoring of Tanzania’s IMF activities will be crucial for understanding its fiscal trajectory in East Africa and beyond.

Member	Total IMF Credit Outstanding as of 06/30/2025	Total Disbursements	Total Repayments	Total IMF Credit Outstanding as of 07/25/2025
Afghanistan, Islamic Republic of	366,158,000	0	0	366,158,000
Albania	40,657,506	0	0	40,657,506
Angola	2,750,091,673	0	28,208,333	2,721,883,340
Argentina	40,260,000,000	0	0	40,260,000,000
Armenia, Republic of	89,873,183	0	0	89,873,183
Bangladesh	2,922,634,500	0	0	2,922,634,500
Barbados	491,550,010	0	0	491,550,010
Benin	765,823,950	0	3,183,400	762,640,550
Bosnia and Herzegovina	47,559,375	0	0	47,559,375
Burkina Faso	342,002,000	0	2,253,000	339,749,000
Burundi	100,100,000	0	0	100,100,000
Cabo Verde	72,116,000	4,510,000	0	76,626,000
Cameroon	1,168,860,000	0	23,460,000	1,145,400,000
Central African Republic	236,885,500	0	6,931,600	229,953,900
Chad	454,915,000	0	6,309,000	448,606,000
Colombia	937,500,000	0	0	937,500,000
Comoros	23,447,940	0	0	23,447,940
Congo, Democratic Republic of	1,762,450,000	190,400,000	0	1,952,850,000
Congo, Republic of	353,160,000	0	3,240,000	349,920,000
Costa Rica	1,837,765,000	0	0	1,837,765,000
Cote d'Ivoire	3,104,687,108	0	0	3,104,687,108
Djibouti	31,800,000	0	0	31,800,000
Dominica	10,895,000	0	0	10,895,000
Ecuador	6,211,675,007	438,400,000	0	6,650,075,007
Egypt	7,497,485,852	0	74,623,333	7,422,862,519
El Salvador	172,320,000	0	0	172,320,000
Equatorial Guinea	51,496,501	0	0	51,496,501
Eswatini, The Kingdom of	9,812,500	0	0	9,812,500
Ethiopia	1,415,347,500	191,700,000	13,364,000	1,593,683,500
Gabon	414,512,500	0	0	414,512,500
Gambia, The	129,241,250	0	1,166,250	128,075,000
Georgia	370,416,667	0	0	370,416,667
Ghana	2,448,001,000	267,500,000	8,302,500	2,707,198,500
Grenada	18,600,000	0	200,000	18,400,000
Guinea	323,213,900	0	1,721,300	321,492,600
Guinea-Bissau	51,174,400	4,730,000	587,000	55,317,400
Haiti	173,013,750	0	0	173,013,750
Honduras	511,299,319	0	0	511,299,319
Jamaica	595,590,000	0	0	595,590,000
Jordan	1,530,513,418	0	0	1,530,513,418
Kenya	3,022,009,900	0	0	3,022,009,900
Kosovo	142,072,000	0	0	142,072,000
Kyrgyz Republic	74,422,400	0	0	74,422,400
Lesotho	11,660,000	0	0	11,660,000
Liberia	174,503,200	0	0	174,503,200
Madagascar	695,577,600	77,392,000	9,340,600	763,629,000
Malawi	296,056,000	0	0	296,056,000
Maldives	21,200,000	0	0	21,200,000
Mali	403,827,600	0	5,165,000	398,662,600
Mauritania	296,660,000	36,160,000	0	332,820,000
Moldova, Republic of	733,876,260	0	800,000	733,076,260
Mongolia	71,488,115	0	0	71,488,115
Morocco	937,500,000	0	0	937,500,000
Mozambique	545,280,000	0	0	545,280,000
Myanmar	258,395,000	0	21,533,750	236,861,250
Namibia	95,550,000	0	23,887,500	71,662,500
Nepal	380,165,000	0	0	380,165,000
Nicaragua	64,997,500	0	0	64,997,500
Niger	411,896,500	30,268,000	6,028,000	436,136,500
North Macedonia, Republic of	203,440,000	0	0	203,440,000
Pakistan	6,745,250,006	0	59,666,666	6,685,583,340
Papua New Guinea	725,130,000	0	0	725,130,000
Paraguay	0	146,000,000	0	146,000,000
Rwanda	606,757,500	0	4,005,000	602,752,500
St. Lucia	21,400,000	0	0	21,400,000
St. Vincent and the Grenadines	19,872,450	0	0	19,872,450
Samoa	16,200,000	0	0	16,200,000
Sao Tome & Principe	27,158,013	0	63,433	27,094,580
Senegal	1,003,723,612	0	10,787,500	992,936,112
Serbia, Republic of	949,460,000	0	0	949,460,000
Seychelles	106,579,000	0	272,500	106,306,500
Sierra Leone	325,840,900	0	3,999,500	321,841,400
Solomon Islands	6,989,433	0	0	6,989,433
Somalia	87,000,000	7,500,000	0	94,500,000
South Africa	381,400,000	0	0	381,400,000
South Sudan	246,000,000	0	0	246,000,000
Sri Lanka	1,446,746,184	254,000,000	9,991,166	1,690,755,018
Sudan	991,551,000	0	0	991,551,000
Suriname	430,700,000	0	0	430,700,000
Tajikistan, Republic of	139,200,000	0	0	139,200,000
Tanzania	1,122,630,000	213,100,000	0	1,335,730,000
Togo	292,730,000	44,040,000	2,517,000	334,253,000
Tonga	13,800,000	0	0	13,800,000
Tunisia	526,138,180	0	14,731,866	511,406,314
Uganda	992,750,000	0	0	992,750,000
Ukraine	10,800,391,676	0	0	10,800,391,676
Uzbekistan, Republic of	92,050,000	0	0	92,050,000
Zambia	992,860,000	0	0	992,860,000
Total	118,045,530,338	1,905,700,000	346,339,197	119,604,891,141

Tanzania’s external debt has shown a significant upward trend, reaching 35,039.8 USD Million in February 2025, up from 34,551.4 USD Million in January 2025, according to the Bank of Tanzania. This marks a month-on-month increase of approximately 488.4 USD Million or 1.41%. The external debt has grown steadily, averaging 20,062.78 USD Million from 2011 to 2025, with a record high of 34,936.5 USD Million in February 2025 and a low of 2,469.7 USD Million in December 2011. This reflects a substantial increase over the years, driven by investments in infrastructure, energy, and other development projects.

Tanzania’s External Debt in Context

Tanzania’s external debt is a critical indicator of its economic position within Africa and East Africa. To provide a comprehensive understanding, let’s compare Tanzania’s external debt to other African and East African countries, analyze its debt-to-GDP ratio, and explore the factors contributing to its debt profile.

Comparison with African Countries

The provided data lists external debt for several African countries, with figures converted to USD Million where necessary for comparison. Using the most recent data from the table and supplementing with additional context:

South Africa: 168,379 USD Million (Dec 2024) – The highest external debt in the dataset, reflecting South Africa’s position as one of Africa’s largest economies.
Egypt: 155,204 USD Million (Sep 2024) – Another major economy with significant external borrowing, driven by infrastructure and energy projects.
Angola: 50,260 USD Million (Dec 2023) – High debt due to oil-related investments and reliance on external financing.
Nigeria: 42,900 USD Million (Sep 2024) – A major oil-producing nation with considerable external debt, though lower than Tanzania’s relative to GDP.
Tanzania: 34,056 USD Million (Mar 2025) – Ranks among the top tier of African countries in terms of external debt, reflecting its ambitious development agenda.
Ghana: 28,300 USD Million (Dec 2024) – Lower than Tanzania, but Ghana faces higher debt distress risks due to a higher debt-to-GDP ratio.
Rwanda: 7,916 USD Million (Dec 2023) – An East African neighbor with significantly lower external debt than Tanzania.
Kenya: 5,057 KES Billion (approx. 37,173 USD Million at an exchange rate of 1 KES = 0.00735 USD, Dec 2024) – Comparable to Tanzania, but slightly higher, reflecting Kenya’s larger economy.
Burundi: 1,873,263 BIF Million (approx. 650 USD Million at an exchange rate of 1 BIF = 0.000347 USD, Dec 2024) – Significantly lower, reflecting Burundi’s smaller economy.

Tanzania’s external debt of 34,056 USD Million (Mar 2025) places it among the top 10 African countries for external debt, behind economic giants like South Africa, Egypt, and Nigeria, but ahead of smaller economies like Rwanda and Burundi. This reflects Tanzania’s growing economic ambitions but also its increasing reliance on external financing.

Comparison with East African Community (EAC) Countries

Within East Africa, Tanzania’s external debt is significant but not the highest. Key EAC countries include:

Kenya: Approximately 37,173 USD Million (Dec 2024) – Slightly higher than Tanzania, driven by large infrastructure projects like the Standard Gauge Railway (SGR).
Tanzania: 34,056 USD Million (Mar 2025) – A close second, with debt growth tied to infrastructure, energy, and mining investments.
Rwanda: 7,916 USD Million (Dec 2023) – Much lower, reflecting Rwanda’s smaller economy and more cautious borrowing.
Uganda: Data not provided, but recent estimates suggest around 20,000 USD Million (2023), lower than Tanzania due to a less diversified economy.
Burundi: 650 USD Million (Dec 2024) – Minimal debt, constrained by its small economy and political instability.

Tanzania’s external debt is comparable to Kenya’s, positioning it as a major borrower in the EAC. However, its debt-to-GDP ratio and risk profile are more favorable than some peers, as discussed below.

Debt-to-GDP Ratio and Sustainability

Tanzania’s external debt-to-GDP ratio provides insight into its debt sustainability. In 2023, Tanzania’s public debt (including external and domestic) was 46.87% of GDP, with external debt accounting for approximately 70.4% of total public debt (2023 data). Assuming a nominal GDP of 78 USD Billion in 2023 (projected to grow to 105.1 USD Billion in 2022, adjusting for inflation and growth), the external debt of 34,056 USD Million in March 2025 translates to roughly 32-35% of GDP, depending on GDP estimates for 2025.

Comparison with African Peers:
- South Africa: External debt at 168,379 USD Million with a GDP of approximately 405 USD Billion (2023) yields a debt-to-GDP ratio of ~41.6%, higher than Tanzania.
- Egypt: 155,204 USD Million with a GDP of 393 USD Billion (2023) results in a ratio of ~39.5%, also higher.
- Nigeria: 42,900 USD Million with a GDP of 362 USD Billion (2023) gives a ratio of ~11.8%, significantly lower due to Nigeria’s larger economy.
- Ghana: 28,300 USD Million with a GDP of 76 USD Billion (2023) results in a ratio of ~37.2%, indicating higher distress risk.
- Rwanda: 7,916 USD Million with a GDP of 14 USD Billion (2023) yields a ratio of ~56.5%, much higher than Tanzania, indicating greater vulnerability.
East African Context:
- Kenya: 37,173 USD Million with a GDP of 112 USD Billion (2023) results in a ratio of ~33.2%, similar to Tanzania.
- Rwanda: As noted, ~56.5%, significantly higher.
- Burundi: 650 USD Million with a GDP of 2.6 USD Billion (2023) yields a ratio of ~25%, lower but less relevant due to its small economy.

Tanzania’s external debt-to-GDP ratio of ~32-35% is moderate compared to peers, and its public debt-to-GDP ratio of 46.87% (2023) is below the regional benchmark of 55% for low-income countries, indicating sustainable debt levels. The IMF’s 2024 Debt Sustainability Analysis (DSA) classifies Tanzania’s risk of external debt distress as low, supported by prudent fiscal policies and concessional borrowing.

Composition of Tanzania’s External Debt

As of December 2019, Tanzania’s external debt was USD 22.4 Billion (40% of GDP), with the central government holding 78%, the private sector 21%, and public corporations 0.4%. The debt is primarily owed to:

Multilateral institutions: 46% (e.g., World Bank, IMF, African Development Bank)
Commercial sources: 34%
Export credit: 11%
Bilateral institutions: 9% (e.g., China, India).

By currency, 68.9% of external debt is denominated in USD, followed by the Euro, which reduces exposure to currency fluctuations but increases repayment burdens when the Tanzanian shilling depreciates (8% depreciation in 2023).

Drivers of External Debt

Tanzania’s external debt growth is driven by:

Infrastructure Investments: Large-scale projects like the Standard Gauge Railway (SGR), Dar es Salaam Port expansion, and energy projects (e.g., gas pipeline from Mnazi Bay to Dar es Salaam) require significant borrowing.
Economic Diversification: Investments in mining (gold, nickel, graphite), manufacturing, and tourism to reduce reliance on agriculture.
COVID-19 Response: Non-concessional borrowing during the pandemic to support the economy, increasing debt levels.
Foreign Direct Investment (FDI): FDI rose to USD 922 Million in 2021, with projects like the Kabanga Nickel Project requiring external financing.

Risks and Challenges

Foreign Exchange Shortages: The Tanzanian shilling’s 8% depreciation in 2023 and 0.5% in 2022 increased debt servicing costs in local currency.
Election-Related Pressures: The 2025 elections may increase fiscal spending, potentially pausing fiscal consolidation efforts.
Global Economic Slowdown: Reduced tourism receipts and export demand could strain debt repayment capacity.
Debt Service Burden: Debt service absorbs ~40% of government expenditures, limiting fiscal space for social spending.

Position in Africa and East Africa

Africa: Tanzania ranks among the top 10 African countries for external debt, behind South Africa, Egypt, and Nigeria, but its moderate debt-to-GDP ratio and low distress risk make it a relatively stable borrower. Its diversified economy (agriculture, mining, tourism) and stable political environment enhance its attractiveness for FDI, unlike higher-risk countries like Ghana or Zambia.
East Africa: Tanzania is a close second to Kenya in external debt, with a stronger growth outlook (6% projected GDP growth in 2025 vs. Kenya’s 5%). Its lower debt-to-GDP ratio compared to Rwanda and stable macroeconomic policies position it as a regional economic powerhouse, though Kenya’s larger economy gives it a slight edge.

Conclusion

Tanzania’s external debt of 34,056 USD Million in March 2025 reflects its ambitious development agenda but remains sustainable, with a debt-to-GDP ratio of ~32-35% and low distress risk. Compared to African peers, Tanzania’s debt is moderate, and within East Africa, it competes closely with Kenya while outperforming smaller economies like Rwanda and Burundi. Continued fiscal discipline, concessional borrowing, and economic diversification will be key to maintaining debt sustainability.

This table highlights Tanzania’s external debt of 34,056 USD Million (Mar 2025) as moderate within Africa, comparable to Kenya in East Africa, and sustainable relative to its GDP. Its debt-to-GDP ratio of ~32-35% is lower than peers like Rwanda (56.5%) and Angola (59.1%), positioning Tanzania favorably in terms of debt sustainability.

Country	External Debt (USD Million)	Reference Date	GDP (USD Billion, 2023 Est.)	Debt-to-GDP Ratio (%)	Notes
Tanzania	34,056	Mar 2025	78	~32-35	Moderate debt, low distress risk
Kenya	37,173	Dec 2024	112	~33.2	Slightly higher than Tanzania, larger economy
Rwanda	7,916	Dec 2023	14	~56.5	Higher debt-to-GDP, smaller economy
Burundi	650	Dec 2024	2.6	~25.0	Small economy, minimal debt
South Africa	168,379	Dec 2024	405	~41.6	Highest debt in dataset, large economy
Egypt	155,204	Sep 2024	393	~39.5	Significant debt, infrastructure-driven
Nigeria	42,900	Sep 2024	362	~11.8	Lower ratio due to large GDP
Ghana	28,300	Dec 2024	76	~37.2	Higher distress risk
Angola	50,260	Dec 2023	85	~59.1	High debt, oil-dependent

Notes:

Tanzania: External debt increased from 34,551.4 USD Million (Jan 2025) to 35,039.8 USD Million (Feb 2025), with 34,056 USD Million reported for Mar 2025. Debt-to-GDP ratio estimated at 32-35% based on projected GDP growth to ~100 USD Billion by 2025.
Kenya: Converted from 5,057 KES Billion using 1 KES = 0.00735 USD (Dec 2024).
Burundi: Converted from 1,873,263 BIF Million using 1 BIF = 0.000347 USD (Dec 2024).
GDP Estimates: Sourced from IMF/World Bank 2023 data, adjusted for inflation/growth where necessary.
Debt-to-GDP Ratio: Calculated as (External Debt / GDP) * 100. Ratios are approximate due to varying reference dates and GDP projections.

As of December 2024, Tanzania’s external debt stood at TZS 79.72 trillion (USD 32.93 billion), with 67.8% (TZS 54.10 trillion) denominated in US dollars (USD). The Euro accounted for 16.2% (TZS 12.92 trillion), while the Chinese Yuan made up 6.4% (TZS 5.10 trillion). This heavy reliance on USD borrowing exposes Tanzania to exchange rate risks, where a 10% depreciation of the Tanzania Shilling (TZS) could increase debt servicing costs by TZS 5.41 trillion. To mitigate this risk, Tanzania must enhance foreign reserves, diversify its export earnings, and negotiate more concessional loans to maintain long-term debt sustainability

Tanzania’s external debt is held in multiple currencies, exposing the country to foreign exchange risks depending on fluctuations in the global market. As of December 2024, the total external debt stock stood at TZS 79.72 trillion (USD 32.93 billion), with the majority denominated in US dollars.

1. Currency Composition of External Debt (Percentage Share & TZS Value)

Currency	Percentage Share (%)	Value in TZS (Trillion)
US Dollar (USD)	67.8%	54.10 trillion
Euro (EUR)	16.2%	12.92 trillion
Chinese Yuan (CNY)	6.4%	5.10 trillion
Other Currencies	9.5%	7.60 trillion
Total External Debt	100%	79.72 trillion

2. Key Observations & Implications

✅ US Dollar Dominance (67.8%)

The majority of Tanzania’s external debt is in USD (TZS 54.10 trillion), making the country highly sensitive to exchange rate fluctuations.
If the Tanzania Shilling depreciates, debt servicing costs in TZS will increase, putting pressure on government finances.

✅ Euro Loans (16.2%) Provide Some Diversification

TZS 12.92 trillion is denominated in Euros, offering some protection from USD volatility.
However, if the Euro strengthens, Tanzania will need more TZS to repay Euro-denominated loans.

✅ Chinese Yuan Exposure (6.4%) Reflects Infrastructure Financing Ties

TZS 5.10 trillion of Tanzania’s external debt is in CNY, largely financing transport, energy, and telecommunications projects.
The yuan’s stability reduces risks, but any CNY appreciation will raise repayment costs in TZS.

✅ Other Currencies (9.5%) Reflect a Diverse Creditor Base

TZS 7.60 trillion is spread across other currencies (GBP, JPY, etc.), limiting reliance on a single currency.
This reduces overall currency risk but makes debt servicing more complex due to multiple exchange rate fluctuations.

3. Exchange Rate Risks & Debt Management Strategy

⚠️ Tanzania is vulnerable to exchange rate movements, particularly in the USD-TZS exchange rate.
⚠️ If the Tanzania Shilling depreciates against the US dollar, debt servicing costs will increase, reducing fiscal space.
✅ Diversification into Euros and Chinese Yuan helps, but debt repayment strategies should factor in exchange rate risks.

Key Takeaways

📌 67.8% of Tanzania’s external debt (TZS 54.10 trillion) is in US dollars, making debt service costs dependent on USD-TZS fluctuations.
📌 Euro-denominated debt (16.2% or TZS 12.92 trillion) offers some diversification, while CNY exposure (6.4% or TZS 5.10 trillion) reflects infrastructure financing links with China.
📌 Government debt management strategies should focus on reducing currency risks by increasing TZS-denominated borrowing and hedging against USD volatility.

To maintain debt sustainability, Tanzania must closely monitor exchange rate movements, diversify borrowing sources, and prioritize revenue generation to offset repayment risks

The currency breakdown of Tanzania’s external debt reveals key insights into the country’s financial exposure, exchange rate risks, and debt sustainability

1. Heavy Dependence on the US Dollar (67.8%) Increases Exchange Rate Risk

USD 54.10 trillion (TZS) of Tanzania’s external debt is in US dollars, meaning any depreciation of the Tanzania Shilling (TZS) against the USD will increase repayment costs.
If the TZS weakens by just 10%, the government will need an extra TZS 5.41 trillion to service USD-denominated debt.
Since global interest rates and US monetary policy influence the USD, Tanzania’s debt costs could rise unexpectedly if the USD strengthens.

Implication:
⚠️ Tanzania is highly vulnerable to USD fluctuations, which could increase debt servicing costs and fiscal pressure.
✅ If the Shilling remains stable or strengthens, repayment costs will be lower.

2. Euro (16.2%) and Chinese Yuan (6.4%) Help Reduce USD Dependence

TZS 12.92 trillion in Euro debt provides some diversification, but the Euro is still volatile against the Shilling.
TZS 5.10 trillion in Chinese Yuan (CNY) debt reflects Tanzania’s strong infrastructure financing ties with China.
The CNY is more stable than the USD, but if China tightens monetary policy, Tanzania’s loan repayment costs in TZS could rise.

Implication:
✅ Having some debt in Euros and Yuan reduces USD reliance.
⚠️ However, fluctuations in these currencies could still affect repayment costs.

3. Exchange Rate Movements Can Impact Tanzania’s Fiscal Position

A weaker TZS will make debt servicing more expensive, reducing funds available for public services and development.
If the TZS depreciates by 5-10%, the government may need to allocate an extra TZS 4-8 trillion annually for debt repayment.
Foreign reserves (USD 5.5 billion) cover 4.5 months of imports, but if debt repayments rise, reserves could deplete faster.

Implication:
⚠️ Tanzania must generate more export revenue in USD, EUR, and CNY to ease repayment pressures.
✅ Stable foreign exchange reserves help offset currency risks, ensuring the country meets its obligations.

4. Policy Actions Needed to Reduce Exchange Rate Risks

✅ Increase Local Currency Borrowing: More TZS-denominated debt would protect Tanzania from forex fluctuations.
✅ Enhance Foreign Currency Reserves: A stronger reserve position would act as a buffer against currency swings.
✅ Diversify Export Earnings: More revenue from gold, tourism, and agriculture will help Tanzania repay debts in USD, EUR, and CNY without depleting reserves.
✅ Negotiate for More Concessional Loans: More multilateral funding in low-interest, long-term debt can reduce reliance on expensive commercial borrowing.

Final Takeaway

📌 67.8% of external debt is in USD (TZS 54.10 trillion), making Tanzania vulnerable to currency depreciation risks.
📌 Euro (16.2%) and Chinese Yuan (6.4%) provide diversification, but they also come with their own exchange rate risks.
📌 The government must carefully manage forex reserves and export revenue to avoid debt distress.

While Tanzania’s debt remains manageable, exchange rate volatility could create future repayment challenges if not addressed through strong fiscal management and export-driven economic growth

In September 2024, Tanzania’s national debt reached USD 45.05 billion, with 73% held in external debt, underscoring the country’s reliance on foreign financing for development. This external debt, totaling USD 32.89 billion, exposes Tanzania to risks from global economic shifts, such as rising interest rates and currency fluctuations. The domestic debt, focused on long-term government securities, reflects a cautious approach to managing short-term financial pressures. As Tanzania strives to balance its funding needs with sustainable debt levels, a diversified financial strategy will be essential to maintain resilience and support continued economic growth.

Debt Composition:
- External Debt: Comprises 73% of the total debt, equating to approximately USD 32.89 billion. This reliance on foreign financing highlights Tanzania's exposure to external economic conditions, currency fluctuations, and interest rates.
- Domestic Debt: Accounts for the remaining 27%, around TZS 32.6 trillion (roughly USD 12.16 billion). The domestic debt primarily includes long-term government securities such as Treasury bonds, which constituted 78.9% of the domestic debt portfolio.
Debt Growth:
- External debt grew by 0.6% in September, driven by additional external loans primarily for government projects. This slight growth shows moderate increases in borrowing, indicating a cautious approach amid rising global borrowing costs.
- Domestic debt, in contrast, saw a reduction in short-term instruments like Treasury bills, aligning with a strategy to keep interest expenses in check by favoring longer-term, lower-risk instruments.
Debt Servicing and Risks:
- External Debt Service: In September, the government serviced USD 105.4 million in external debt, including USD 45.9 million for principal repayment and USD 59.5 million for interest. These payments indicate ongoing debt obligations that can strain foreign reserves if external conditions tighten or export earnings decline.
- Domestic Debt Management: By focusing on long-term securities, the government aims to minimize rollover risks and ensure more predictable repayment schedules. This reduces the potential impact of short-term interest rate volatility.
Implications of High External Debt:
- A high proportion of external debt can expose Tanzania to global economic shifts, such as rising interest rates or currency depreciation, which could make debt repayments more expensive in local currency terms.
- The substantial external debt load could also limit Tanzania’s ability to borrow further for development if global financial conditions worsen, underscoring the need for diversified funding sources.

In summary, Tanzania’s debt management strategy involves controlled domestic borrowing and careful external debt expansion, yet the high reliance on foreign debt remains a vulnerability. Prudent management of this debt mix will be essential to maintain economic resilience and avoid financial constraints.

Tanzania’s debt profile, with the national debt at USD 45.05 billion and external debt accounting for 73% of this, provides insights into the country’s fiscal strategy and potential risks:

Reliance on Foreign Financing:
- The high proportion of external debt (USD 32.89 billion) reveals Tanzania’s significant reliance on international funding for development and fiscal needs. While this allows the government to fund large-scale projects, it exposes the country to external risks like currency fluctuations and rising global interest rates, which can increase debt servicing costs in the future.
Debt Servicing and Foreign Reserve Pressure:
- With over USD 105 million in debt servicing obligations in a single month, Tanzania must allocate foreign reserves to cover these repayments. If export earnings decline or global financing conditions tighten, maintaining these payments could become challenging, potentially impacting reserves and currency stability.
Balanced Approach in Domestic Borrowing:
- Tanzania’s focus on long-term Treasury bonds for domestic debt (78.9% of domestic debt) reflects a prudent strategy, reducing the need for frequent rollovers and lowering short-term interest rate risks. This approach helps manage cash flow predictably and minimizes immediate repayment pressures, providing a level of financial stability.
Implications for Fiscal Flexibility:
- While Tanzania’s controlled domestic debt growth is financially sound, the high external debt limits fiscal flexibility. In a global downturn, the country could face challenges in accessing affordable funding or may need to divert resources from domestic priorities to service external debt.
Need for Diversification:
- The reliance on foreign debt emphasizes the importance of diversifying funding sources. Increasing domestic revenue, promoting foreign direct investment, or expanding export earnings could provide a buffer, reducing dependency on external loans.

In essence, while Tanzania is managing its debt prudently, particularly on the domestic front, the high reliance on external debt poses a risk if global conditions worsen. Ensuring a balance between funding needs and sustainable debt levels will be crucial for long-term fiscal health and economic stability.