1

Overview of Tanzania's Domestic Debt

Tanzania's domestic debt stock reached TZS 38,599.6 billion at the end of January 2026, up 1.9% from TZS 37,899.0 billion in December 2025 — reflecting a long-term upward trend driven by increased issuance of government securities to finance budget deficits and development projects.

This growth has nearly tripled since 2018 (TZS 13,618.8 billion), highlighting the expanding role of the domestic securities market in Tanzania's fiscal operations. The debt is predominantly long-term (80.4% Treasury bonds), with major holders being commercial banks (28.5–29%) and pension funds (27.1–27.3%), together holding over 55% — indicating strong institutional participation.

Government securities auctions have shown strong investor confidence, with oversubscribed results — for example, a 34% oversubscription rate for 10-year bonds at 11.30% yield in January — enabling low-cost borrowing. In January 2026 alone, the government mobilised TZS 263.7 billion via securities issuances.

Macroeconomic Context: Domestic debt growth aligns with stable macroeconomic conditions — 3.2% inflation and a 5.75% Central Bank Rate (CBR) — supporting 6.0–6.3% GDP growth projections for 2026, driven by sectors like mining and agriculture.

TZS 38,599.6B
Domestic Debt Stock
As of January 2026; up from TZS 13,618.8B in 2018
+1.9%
Monthly Growth
Dec 2025 → Jan 2026
~17% GDP
Debt-to-GDP Ratio
Domestic share is ~30% of total public debt
TZS 669.8B
Jan 2026 Servicing Cost
Principal + Interest payments in January 2026
2

Government Domestic Debt by Creditor Category (January 2026)

The table below shows the main institutions that hold government domestic debt as of January 2026. Commercial banks lead as the largest single creditor group, followed closely by pension funds.

Creditor CategoryAmount (TZS Billion)Share (%)Rank
Commercial Banks10,979.629.0%#1
Pension Funds10,352.227.3%#2
Bank of Tanzania6,695.217.7%#3
Others (Public Institutions, Companies, Individuals)7,128.018.8%#4
Insurance Companies2,006.15.3%#5
BOT Special Funds737.81.9%#6
Total Domestic Debt37,899.0 – 38,599.6100%—
Creditor Category Distribution — January 2026
Share of total domestic debt by creditor type (TZS Billion)
Domestic Debt Held by Creditor — Amount (TZS Billion)
January 2026 — absolute values by creditor category
3

Year-on-Year Comparison: January 2025 vs January 2026

Comparing January 2025 to January 2026 reveals clear shifts in the creditor landscape. While commercial banks and pension funds both grew in absolute terms, the Bank of Tanzania reduced its holdings by TZS 417.1 billion, reflecting a deliberate shift away from central bank financing.

Creditor CategoryJan 2025 (TZS B)Share 2025Jan 2026 (TZS B)Share 2026Change (TZS B)Share Change
Commercial Banks9,816.628.7%10,979.629.0%+1,163.0+0.3%
Pension Funds9,094.626.6%10,352.227.3%+1,257.6+0.7%
Bank of Tanzania7,112.320.8%6,695.217.7%−417.1−3.1%
Insurance Companies1,872.65.5%2,006.15.3%+133.5−0.2%
BOT Special Funds476.11.4%737.81.9%+261.7+0.5%
Others5,782.616.9%7,128.018.8%+1,345.4+1.9%
Total34,154.9100%38,599.6100%+4,444.7—
Year-on-Year Comparison by Creditor (TZS Billion)
January 2025 vs January 2026

Notable Shift: The Bank of Tanzania's share declined from 20.8% to 17.7% (−3.1 percentage points), while "Others" grew from 16.9% to 18.8% (+1.9 pp), indicating broader participation in the government securities market including from individuals and private institutions.

4

Distribution Among Major Creditor Groups

Two creditor groups — commercial banks and pension funds — together hold an outsized majority of Tanzania's domestic debt. This concentration reflects the investment mandates of these institutions, both of which seek low-risk, interest-bearing assets.

Major CreditorAmount (TZS Billion)Share (%)Combined
Commercial Banks10,979.629.0%≈ 56%
Pension Funds10,352.227.3%
Bank of Tanzania6,695.217.7%—
Others7,128.018.8%—
Insurance Companies + BOT Special Funds2,743.97.2%—

Commercial banks and pension funds together hold over half of Tanzania's domestic debt — approximately TZS 21.3 trillion out of TZS 38.6 trillion, demonstrating the critical role of the formal financial sector in government financing.

5

Role of Each Creditor Category

Each creditor category participates in the government securities market for distinct reasons rooted in their institutional mandates, risk profiles and liquidity requirements. Understanding these roles is key to assessing the stability and depth of Tanzania's domestic debt market.

🏦

Commercial Banks

Largest holders of government securities, primarily investing in short-to-medium term instruments as part of liquidity and capital management strategies.

  • Treasury Bonds (primary investment)
  • Treasury Bills (liquidity management)
  • Low-risk, liquid assets on balance sheet
  • Regulatory compliance with liquidity ratios
🏛️

Pension Funds

Major long-term investors including NSSF, PSSSF and LAPF — they seek stable returns aligned with long-dated pension liabilities.

  • Long-term Treasury Bonds (5–25 years)
  • Stable, predictable coupon income
  • Asset-liability matching for pension obligations
  • NSSF, PSSSF, LAPF as key institutions
🏧

Bank of Tanzania (Central Bank)

Holds government debt as part of its monetary policy toolkit and balance sheet management — declining share signals reduced monetisation.

  • Monetary policy operations
  • Liquidity management tools
  • Open market operations (OMO)
  • Declining share (20.8% → 17.7%): positive signal
🛡️

Insurance Companies

Invest part of their reserves in government securities to meet regulatory requirements and provide predictable returns on policyholder funds.

  • Government Bonds and Treasury Bills
  • Stable returns with low default risk
  • Regulatory reserve requirements
  • Growing slowly (+TZS 133.5B YoY)
💼

BOT Special Funds

Funds managed by the Bank of Tanzania for specific programs or government financing arrangements — fastest growing category in 2025/26.

  • Special government financing programs
  • Managed by Bank of Tanzania
  • Fastest growth rate (+54.9% YoY)
  • From TZS 476.1B → TZS 737.8B
🌐

Others (Institutions, Individuals)

A diverse group representing the breadth of Tanzania's securities market participation — the second-fastest growing category by absolute amount.

  • Public institutions and agencies
  • Private companies and corporates
  • Individual retail investors
  • Non-resident investors (foreign)
6

Domestic Debt Growth Trend (2018 – January 2026)

Tanzania's domestic debt has grown consistently and substantially over the past eight years, nearly tripling between 2018 and January 2026. This expansion reflects the deliberate policy of relying more on domestic financing and deepening the government securities market.

Year / PeriodDomestic Debt Stock (TZS Billion)Annual / Period Growth (%)Cumulative Growth since 2018
201813,618.8—Base Year
202014,637.8+7.5%+7.5%
202221,256.1+45.2%+56.1%
202326,494.6+24.6%+94.5%
202431,002.6+17.0%+127.6%
2025 (End of Year)37,899.0+22.2%+178.3%
January 202638,599.6+1.9% (from Dec 2025)+183.4%
Tanzania Domestic Debt Growth Trend (2018–Jan 2026)
Government domestic debt stock in TZS Billion — with trend line
Annual Growth Rate of Domestic Debt (%)
Period-over-period percentage change in total domestic debt stock

Key Insight: The steepest acceleration in domestic debt growth occurred between 2020 and 2022 (+45.2%), driven by post-COVID fiscal expansion and increased government development spending. Growth has remained elevated at 17–22% annually through 2024 and 2025.

7

Domestic Debt by Instrument (January 2026)

The composition of Tanzania's domestic debt by instrument reveals a clear preference for long-term Government Bonds, which make up over 80% of the total. This structure aligns with Tanzania's development financing needs and reduces refinancing risk.

InstrumentAmount (TZS Billion, Jan 2026)Share (%)Characteristics
Government Bonds (Treasury Bonds)31,015.180.4%Long-term; maturities 2–25 years
Treasury Bills1,821.44.7%Short-term; 35–364 days
Non-Securitized Debt (incl. Overdraft)5,627.314.6%Direct financing; not market-based
Government Stocks135.70.4%Legacy instruments; declining
Total Securities (Bonds + T-Bills + Stocks)32,972.385.4%Market-traded instruments
Debt Composition by Instrument — January 2026
Share of total domestic debt (TZS 38,599.6 billion)

85.4% of domestic debt is market-based securities (bonds, bills and stocks), indicating a mature securities market. The high share of long-term bonds reduces rollover risk and supports stable debt management.

8

Domestic Debt Servicing — January 2026

In January 2026, the government serviced a total of TZS 669.8 billion in domestic debt obligations — comprising both principal repayments and interest payments. Interest payments exceeded principal repayments, underscoring the cost of maintaining a large and growing debt stock.

Servicing ItemAmount (TZS Billion)Share of Total Servicing
Principal Repayment303.945.4%
Interest Payments365.954.6%
Total Domestic Debt Servicing669.8100%
Domestic Debt Servicing Breakdown — January 2026
Principal vs Interest payments in TZS Billion

Servicing Risk Watch: Monthly servicing of TZS 669.8 billion represents approximately 6.5% of the government budget. While currently manageable, rising yields or further debt accumulation could put pressure on fiscal resources and potentially crowd out social spending.

9

Economic Implications for Tanzania's Growth and Development

Tanzania's domestic debt, primarily channelled through the securities market, plays a multifaceted role in the economy — enabling self-reliant financing for growth while also posing risks that require careful management.

Implication CategoryPositive Impact on GrowthPotential RisksLink to Securities Market
Fiscal FinancingMobilises TZS 263.7B/month for infrastructure; reduces FX risk (domestic = 30% of total debt)Servicing TZS 669.8B/month diverts from social programs; risks poverty stagnation (~20% target 2030)Oversubscribed auctions (34%) keep yields low (11.3%); attracts pensions (27.3%)
Financial DeepeningInstitutional dominance (55% banks/pensions) deepens markets; boosts savings rate (~12%) for industrialisationCrowding out if growth exceeds 22% annually, limiting private credit to SMEs (40% GDP contribution)85.4% securities recycle liquidity; stabilising IBCM rates (6.68%)
Macro StabilityAligns with 3.2% inflation and 5.75% CBR; enabling 6.5–6.9% medium-term growthDebt-to-GDP ~17% could rise to 20% if revenue falters; pressuring reserves (USD 6.3B)Liquidity from auctions supports monetary policy; reducing reverse repos (TZS 976.4B)
Inclusive DevelopmentFunds Vision 2050 (energy/mining); creates jobs (160,000 in 2025); pension investments enhance social securityInequality if urban-focused; high servicing strains rural agriculture (26% GDP)Diverse holders (18.8% others) broaden participation; foster market maturity
10

Key Observations & Conclusion

Key Observations

🏅

Financial Institutions Dominate

Commercial banks and pension funds together hold more than half of domestic debt, reflecting a deep and institutionally anchored securities market in Tanzania.

📈

Steady Debt Growth Supports Fiscal Needs

Domestic borrowing has grown at 17–22% annually since 2022, primarily used to finance government budget deficits and development programs without excessive inflation.

🌱

Increasing Role of Institutional Investors

Pension funds and insurance companies are becoming major long-term investors in government securities, contributing to market stability and depth.

⚖️

Declining Central Bank Monetisation

The Bank of Tanzania's share fell from 20.8% to 17.7%, a positive indicator that government financing is shifting away from central bank money creation.

Conclusion

According to the Bank of Tanzania report, Tanzania's domestic debt structure is characterised by:

  • Strong dominance of commercial banks and pension funds — together accounting for over 56% of total domestic debt
  • Heavy reliance on long-term government securities such as Treasury bonds (80.4% of total)
  • Gradual expansion of domestic borrowing to finance government operations, reaching TZS 38,599.6 billion as of January 2026
  • Robust market participation, with oversubscribed auctions and growing participation from the "Others" category

Domestic debt therefore plays an important role in supporting fiscal financing while also developing Tanzania's financial markets. Overall, domestic debt's structure via securities promotes resilient, self-financed growth, but balanced management is key to avoid debt overhang. For the most current updates, monitor the Bank of Tanzania monthly economic review.

Bottom Line: Tanzania's domestic debt is structurally sound — dominated by long-term instruments, held by stable institutional investors, and aligned with macroeconomic stability targets. The key policy challenge is to manage the pace of growth to avoid crowding out private sector credit and keep servicing costs sustainable.

Data Sources & Attribution: This analysis is based on the Bank of Tanzania (BoT) Monthly Economic Review, Government Securities Auction Reports, and related fiscal data for January–March 2026. Published by TICGL – Tanzania Investment and Consultant Group Ltd . For updates, monitor www.bot.go.tz.
Extended Analysis — Section 2
11

Government Securities Market Context

Tanzania's domestic debt is predominantly financed through a well-functioning government securities market. Understanding how auctions are conducted, what instruments are issued and how yields are priced is essential for interpreting the debt structure data.

In January 2026, the government mobilised TZS 263.7 billion through securities issuances. Auction results consistently show oversubscription, with total bids reaching as high as TZS 840 billion against offered amounts — signalling deep investor appetite and ample market liquidity.

January 2026 Auction Highlights

InstrumentTenorYield / RateOversubscriptionImplication
10-Year Treasury Bond10 years11.30%+34%Strong long-term investor demand
Government Securities (aggregate)Mixed~11.30% avgOversubscribedTZS 840B bids vs offer
Total Mobilised (Jan 2026)——✓ SuccessfulTZS 263.7 billion raised

Investor Confidence Signal: A 34% oversubscription on 10-year bonds at 11.30% yield is a strong vote of confidence. It indicates that Tanzania's securities market offers attractive risk-adjusted returns relative to alternatives, enabling the government to borrow at controlled and predictable costs.

Securities Market Size and Depth

~15% GDP
Securities Market Depth
Market capitalisation relative to GDP — a mark of growing maturity
85.4%
Market-Based Debt
Share of total domestic debt held in tradeable securities
TZS 263.7B
Jan 2026 Mobilisation
New funds raised via government securities in one month
TZS 976.4B
Reverse Repos Reduced
Liquidity management via monetary policy instruments

IBCM Rate and Monetary Policy Link

The Inter-Bank Cash Market (IBCM) rate of 6.68% — well below the 10-year bond yield of 11.30% — reflects the healthy spread between short-term liquidity rates and long-term sovereign yields. This spread incentivises banks and funds to extend duration and hold longer-dated bonds, supporting the government's preference for long-term debt financing.

Key Interest Rates & Yields — January 2026
Comparison of central bank rate, interbank rate and bond yield (% per annum)

Role of Domestic vs External Debt

Tanzania's domestic borrowing constitutes approximately 30% of total public debt, with the remainder being external obligations. This balance reduces currency risk — domestic debt is denominated in Tanzanian shillings (TZS) — while keeping external borrowing sustainable relative to foreign exchange reserves of USD 6.3 billion.

Debt CategoryApprox. Share of Total DebtCurrencyKey Risk
Domestic Debt~30%TZS (local currency)Crowding-out of private credit
External Debt~70%USD, EUR, CNY, etc.FX rate and refinancing risk
Total Public Debt100%MixedBalanced portfolio approach needed
12

Investor Deep-Dive: Who Holds What and Why

Beyond headline shares, the motivations and behaviours of each major creditor group shape Tanzania's debt market dynamics. This section examines the investment logic, regulatory context and portfolio implications for each major holder.

Portfolio Allocation by Creditor (Visual Overview)

  • 🏦 Commercial Banks29.0% — TZS 10,979.6B
  • 🏛️ Pension Funds (NSSF, PSSSF, LAPF)27.3% — TZS 10,352.2B
  • 🌐 Others (Institutions, Individuals)18.8% — TZS 7,128.0B
  • 🏧 Bank of Tanzania17.7% — TZS 6,695.2B
  • 🛡️ Insurance Companies5.3% — TZS 2,006.1B
  • 💼 BOT Special Funds1.9% — TZS 737.8B

Commercial Banks — Largest Holder

Commercial banks hold TZS 10,979.6 billion (29.0%) of domestic debt, up from TZS 9,816.6 billion a year earlier (+11.8%). Banks allocate capital to government securities for several structural reasons:

Reason for HoldingInstrument PreferredRegulatory Basis
Statutory Liquidity Reserve (SLR) complianceTreasury Bills (short-dated)Bank of Tanzania prudential requirements
Risk-weighted asset optimisation (Basel III)Government Bonds (0% risk weight)Capital adequacy framework
Yield-seeking on surplus deposits2–5 year Treasury BondsAsset-liability management (ALM)
Collateral for interbank borrowingTreasury Bills & short bondsIBCM repo market rules

Pension Funds — Fast-Growing Long-Term Holders

Tanzania's three major pension funds — NSSF, PSSSF and LAPF — collectively hold TZS 10,352.2 billion (27.3%), the fastest-growing major creditor by absolute increase (+TZS 1,257.6 billion year-on-year). Their investment mandate requires matching long-duration liabilities with long-dated assets:

FundTypePrimary InstrumentInvestment Horizon
NSSF (National Social Security Fund)Private sector workers10–25 year Treasury Bonds20–30 years
PSSSF (Public Service Social Security Fund)Public servantsLong-term Government Bonds20–30 years
LAPF (Local Authorities Provident Fund)Local government workersGovernment Bonds & T-Bills10–25 years
Combined (all pension funds)—Predominantly bondsLong-term focus

Pension Fund Growth Driver: Tanzania's formal employment is expanding as GDP grows at 6.0–6.3%, increasing NSSF/PSSSF/LAPF contributions. As assets under management (AUM) grow, so does demand for long-dated government securities — creating a self-reinforcing cycle of market development.

Year-on-Year Growth by Creditor Category (TZS Billion)
Absolute change between January 2025 and January 2026

The "Others" Category — Broadening Participation

The "Others" category — comprising public institutions, private companies, individuals and non-resident investors — grew by TZS 1,345.4 billion (+23.3%), making it the fastest-growing creditor by percentage among the non-fund categories. Its share rose from 16.9% to 18.8%, reflecting:

  • Increased retail investor participation in Tanzania's government securities primary market
  • Growing awareness of Treasury bonds as a savings vehicle for individuals
  • Corporate treasury departments deploying surplus liquidity into short-term T-Bills
  • Non-resident investors attracted by competitive yields amid a stable TZS exchange rate
13

Data Reconciliation: BoT Report vs Monthly Economic Review (MER)

The Bank of Tanzania publishes domestic debt data through two channels — the Government Domestic Debt report (DOCX) and the Monthly Economic Review (MER) for February 2026. Minor variations exist between these two sources due to timing, rounding and classification adjustments.

Creditor CategoryBoT Debt Report (TZS B)MER Feb 2026 (TZS B)VarianceShare (Report)Share (MER)
Commercial Banks10,979.610,902.5−77.129.0%28.5%
Pension Funds10,352.210,389.5+37.327.3%27.1%
Bank of Tanzania6,695.27,436.0+740.817.7%19.4%
Insurance Companies2,006.12,005.0−1.15.3%5.2%
BOT Special Funds737.8737.80.01.9%1.9%
Others7,128.07,128.9+0.918.8%18.6%
Total38,599.6 / 37,899.038,599.7~0100%100%

Most Notable Variance — Bank of Tanzania: The BoT Debt Report shows TZS 6,695.2B while the MER shows TZS 7,436.0B — a difference of TZS 740.8 billion (10.9%). This likely reflects the timing of how BoT's own holdings (e.g. overdraft facilities and special accounts) are classified and consolidated across reporting periods. Analysts should note this when modelling precise creditor shares.

BoT Debt Report vs Monthly Economic Review (MER) — Data Comparison
TZS Billion — January 2026 figures across both official BoT publications
14

Macroeconomic Indicators Underpinning the Debt Structure

Tanzania's domestic debt structure does not exist in isolation. It is embedded in a broader macroeconomic environment that influences borrowing costs, debt sustainability, and economic growth outcomes.

6.0–6.3%
GDP Growth Forecast 2026
Driven by mining, agriculture and services
3.2%
Inflation Rate
Well within BoT's single-digit target
5.75%
Central Bank Rate (CBR)
Benchmark rate; accommodative stance
6.68%
IBCM Rate
Inter-bank cash market; above CBR floor
USD 6.3B
Foreign Exchange Reserves
Adequate import cover; supports TZS stability
13.4%
Unemployment Rate
Underlines need for growth-inclusive spending
23.5%
Private Credit Growth
Robust; but at risk if domestic debt crowds out banks
TZS 49.2T
FY 2025/26 National Budget
Domestic securities finance ~34% of total budget
Tanzania Key Macro Indicators — 2026 Snapshot
Selected indicators relevant to domestic debt sustainability (normalised for display)

Budget Financing: How Domestic Debt Fits In

Budget ItemValueContext
Total National Budget (FY 2025/26)TZS 49.2 trillionApproved national budget
Domestic Securities Financing Share~34% (~TZS 16.7T)Largest single domestic financing source
GDP Contribution from Debt Financing1.0–1.5% of GDPVia infrastructure spend funded by securities
Domestic Debt Servicing / Budget~6.5%TZS 669.8B monthly servicing vs total budget
Domestic Debt / GDP~17%Within manageable range; monitor upward trend
FDI Target (2026)USD 15 billionSupported by stable macro environment built on sound debt management
15

Risk & Opportunity Matrix for Domestic Debt

For investors, policymakers and business operators, Tanzania's domestic debt landscape presents a balanced mix of structural opportunities and manageable risks. The matrix below synthesises the key findings from the BoT data.

✅ Market Opportunities

  • Oversubscribed auctions signal excess liquidity and strong demand — enabling government to borrow at competitive rates
  • Pension fund AUM growth creates structural long-term demand for Treasury bonds, supporting market depth
  • Retail participation rising in the "Others" category — democratising access to government securities
  • 85.4% securities-based debt supports a liquid secondary market for bond trading
  • FDI of USD 15 billion targeted for 2026 benefits from macro stability anchored by sound debt management
  • 23.5% private credit growth benefits from BoT's accommodative stance enabled by controlled domestic borrowing

⚠️ Risks to Monitor

  • Domestic debt growing faster than GDP (~22% vs ~6.3%) — debt-to-GDP ratio creeping toward 20%
  • Monthly servicing of TZS 669.8B (interest 54.6%) could escalate if yields rise at future auctions
  • Crowding out risk: if banks over-allocate to government securities, private sector credit could be squeezed
  • Urban concentration of fiscal spend — rural agriculture (26% GDP) may under-benefit from debt-funded infrastructure
  • MER vs report variance for BoT holdings (TZS 740.8B gap) introduces uncertainty in creditor analytics
  • Social spending trade-off: rising interest payments (TZS 365.9B/month) divert resources from poverty reduction targets (~20% by 2030)
Tanzania Domestic Debt — Risk vs Opportunity Scorecard
Illustrative scoring (1–10) across six dimensions based on BoT data
16

Frequently Asked Questions (FAQ)

The following questions address common points of interest from investors, researchers and policymakers engaging with Tanzania's domestic debt data.

As of January 2026, Tanzania's government domestic debt stock stands at TZS 38,599.6 billion (approximately TZS 38.6 trillion). This is up 1.9% from TZS 37,899.0 billion at end-December 2025, and up 13.0% from TZS 34,154.9 billion in January 2025. The stock has nearly tripled since 2018 (TZS 13,618.8 billion), reflecting sustained expansion of government development financing through the domestic securities market.

Commercial banks hold the single largest share at 29.0% (TZS 10,979.6 billion), followed closely by pension funds at 27.3% (TZS 10,352.2 billion). Together, these two institutional groups account for over 56% of all domestic debt. The Bank of Tanzania holds a further 17.7%, while "Others" (institutions, individuals, non-residents) hold 18.8%.

The Bank of Tanzania's share fell from 20.8% (Jan 2025) to 17.7% (Jan 2026), a decline of 3.1 percentage points — representing a TZS 417.1 billion reduction in absolute holdings. This is generally viewed as a positive development: it signals that the government is reducing reliance on central bank financing (often called "monetisation of the deficit"), instead shifting to market-based borrowing from commercial banks, pension funds and other investors. Reduced BoT financing helps contain inflationary pressure.

As of January 2026, 80.4% (TZS 31,015.1 billion) of domestic debt consists of long-term Government/Treasury Bonds. Treasury Bills account for 4.7% (TZS 1,821.4 billion), Government Stocks for 0.4% (TZS 135.7 billion), and Non-Securitised Debt (including overdraft facilities) for the remaining 14.6% (TZS 5,627.3 billion). Altogether, 85.4% of domestic debt is held in market-traded securities — indicating a mature and liquid government securities market.

In January 2026, the government serviced TZS 669.8 billion in domestic debt obligations — comprising TZS 303.9 billion in principal repayments (45.4%) and TZS 365.9 billion in interest payments (54.6%). The fact that interest payments exceed principal repayments reflects the large and growing stock of debt. At approximately 6.5% of the national budget, this servicing cost is manageable but bears watching as the debt stock continues to grow.

As of early 2026, evidence of significant crowding-out is not yet confirmed — private sector credit growth remains robust at 23.5% annually. However, the risk exists if domestic debt continues to grow at 17–22% per year while the banking sector's capacity to finance both government and private borrowers is limited. The key risk threshold is if domestic debt growth consistently exceeds 22% — at that point, banks may prioritise zero-risk-weighted government bonds over lending to SMEs, which contribute 40% of GDP.

Pension funds such as NSSF, PSSSF and LAPF have long-dated liabilities — they must pay out pension benefits decades into the future. To meet these obligations, they need stable, long-term, predictable income streams. Government Treasury bonds (typically 5–25 year maturities at yields around 11–13%) are nearly ideal: they offer low default risk, consistent coupon payments, and long enough duration to match pension liability profiles. As Tanzania's formal employment base grows and fund contributions increase, pension fund demand for long-dated government bonds is expected to keep rising.

An oversubscribed auction means that investors submitted bids exceeding the government's offered amount. For example, in January 2026, a 10-year bond auction was oversubscribed by 34%, with total bids reaching TZS 840 billion against the offered amount. This is positive for several reasons: it confirms investor confidence in Tanzania's creditworthiness, it allows the government to reject high-yield bids and keep borrowing costs low, and it signals market depth — sufficient savings are being recycled into government instruments to fund public investment without excessive fiscal strain.

17

Data Notes, Methodology & Definitions

This section provides essential context for interpreting the data presented in this analysis, including definitions, source notes, known data variances and analytical methodology applied by TICGL researchers.

Primary Data Source
Bank of Tanzania (BoT) — Government Domestic Debt by Creditor Category report (January 2026 data), published March 2026. Cross-referenced with BoT Monthly Economic Review (MER) February 2026.
Currency & Units
All monetary values are denominated in Tanzanian Shilling (TZS), expressed in billions (B) unless otherwise stated. 1 TZS Billion = TZS 1,000,000,000.
Total Debt Range
The document references two total debt figures: TZS 37,899.0B (end-December 2025 / year-end 2025) and TZS 38,599.6B (end-January 2026). Both are referenced in context throughout this analysis.
MER Variance Note
Minor differences exist between the debt report and MER data, most notably for Bank of Tanzania holdings (TZS 740.8B gap). MER figures are shown in parentheses where they differ materially from the primary report.
Growth Rates
Annual growth rates are calculated as year-on-year (YoY) percentage changes between equivalent periods. The "2020→2022" rate reflects cumulative two-year growth (annualised equivalent not shown separately).
Creditor Category Definitions
"Commercial Banks" excludes the Bank of Tanzania and Microfinance Banks (MFBs). "Others" includes SACCOs, public enterprises, individuals and non-resident investors per BoT classification.
Instruments Classification
"Government Bonds" = Treasury Bonds with maturities of 2 years and above. "Treasury Bills" = maturities of 35 to 364 days. "Non-Securitised Debt" includes Ways & Means advances, overdraft and other direct credit arrangements.
GDP Reference
GDP estimates used for debt-to-GDP ratios (~17%) are based on BoT and IMF projections for Tanzania's nominal GDP for FY 2025/26. Actual ratios may vary upon final GDP outturn data.
TICGL Analytical Disclaimer
This analysis is produced by TICGL for informational and research purposes. It does not constitute investment advice. For the most current data, visit www.bot.go.tz.

Key Abbreviations Used

AbbreviationFull NameContext
BoTBank of TanzaniaCentral bank; primary data source
TZSTanzanian ShillingNational currency
MERMonthly Economic ReviewBoT's monthly macroeconomic publication
NSSFNational Social Security FundLargest pension fund in Tanzania
PSSSFPublic Service Social Security FundPublic servants' pension scheme
LAPFLocal Authorities Provident FundLocal government workers' fund
IBCMInter-Bank Cash MarketShort-term interbank lending market
CBRCentral Bank RateBoT's benchmark policy rate
OMOOpen Market OperationsBoT's monetary policy toolkit
FDIForeign Direct InvestmentExternal investment inflows to Tanzania
SMESmall and Medium EnterpriseKey private sector contributor (~40% GDP)
GDPGross Domestic ProductTotal value of Tanzania's economic output
ALMAsset-Liability ManagementBanks' portfolio balancing approach
FYFinancial YearTanzania's FY runs July–June

For the latest data: Tanzania's domestic debt figures are updated monthly by the Bank of Tanzania. The most current data is available at www.bot.go.tz. TICGL publishes updated economic analyses at ticgl.com and through the Tanzania Business Intelligence Dashboard.

Data Sources: Bank of Tanzania — Government Domestic Debt by Creditor Category (March 2026); BoT Monthly Economic Review (February 2026); Tanzania National Budget FY 2025/26. Analysis by TICGL – Tanzania Investment and Consultant Group Ltd.