Tanzania’s food inflation rose to 5.4% in March 2025, a slight increase from 5.0% in February, but still remains below the country’s long-term average of 7.7% recorded between 2010 and 2025. This moderate inflation level reflects relative price stability in the country’s food sector despite global and regional challenges. Compared to its East African neighbors, Tanzania ranks 8th, performing better than Kenya (6.6%) and Ethiopia (11.9%), but trailing behind Uganda (2.0%) and Rwanda (3.5%). On a continental scale, Tanzania stands in the middle tier, significantly outperforming high-inflation countries like South Sudan (106%), Zimbabwe (105%), and Malawi (37.7%), indicating a relatively stable macroeconomic and food supply environment.
This shows that Tanzania’s food inflation is currently below its long-term average, suggesting moderate food price pressures compared to historical trends.
Tanzania ranks 18th out of 42 African countries listed in terms of food inflation (from highest to lowest), placing it in the mid-range.
Tanzania compares with selected East African countries:
| Country | Food Inflation (%) | Month | Rank (EA) |
| South Sudan | 106.0 | Oct/24 | 1 |
| Burundi | 38.7 | Feb/25 | 2 |
| Malawi | 37.7 | Mar/25 | 3 |
| Ethiopia | 11.9 | Mar/25 | 4 |
| Mozambique | 12.08 | Mar/25 | 5 |
| Zambia | 18.7 | Apr/25 | 6 |
| Kenya | 6.6 | Mar/25 | 7 |
| Tanzania | 5.4 | Mar/25 | 8 |
| Rwanda | 3.5 | Mar/25 | 9 |
| Uganda | 2.0 | Mar/25 | 10 |
Tanzania ranks 8th among East African countries based on current food inflation. It is lower than Kenya (6.6%), but higher than Uganda (2%) and Rwanda (3.5%).
| Rank | Country | Food Inflation (%) |
| 1 | South Sudan | 106.0 |
| 2 | Zimbabwe | 105.0 |
| 3 | Burundi | 38.7 |
| 4 | Malawi | 37.7 |
| 5 | Ghana | 26.5 |
| 6 | Angola | 25.3 |
| 7 | Nigeria | 21.8 |
| 8 | Zambia | 18.7 |
| 9 | Niger | 13.5 |
| 10 | Liberia | 12.7 |
These countries are facing severe food price pressures, likely due to economic instability, currency depreciation, or supply chain issues.
Summary Insights:
1. National Insights (Tanzania)
2. Regional Comparison (East Africa)
3. Continental Position (Africa)
Tanzania has made significant progress in reducing inflation over the past decade. From an average annual Consumer Price Index (CPI) growth rate of 7.1% during 2010–2019, the country is projected to achieve a much lower and more stable rate of 4.0% over 2025–2027. This improvement reflects effective monetary and fiscal management, helping Tanzania transition into the group of low-inflation economies in Sub-Saharan Africa. For context, inflation is projected to remain high in countries like Nigeria (10%+), Ghana (8.0%), and Zambia (8.0%), while Tanzania outperforms even some of its regional peers, including Uganda (5.0%) and Kenya (5.5%). From 4.4% in 2022, CPI in Tanzania declined to 3.1% in 2024, and is expected to stabilize around 4.0% by 2027, underscoring its growing macroeconomic resilience and investor appeal.
Tanzania is expected to maintain low and stable inflation between 3.1% and 4.0% from 2024 to 2027, indicating macroeconomic stability and strong monetary policy performance.
Tanzania’s Position and Implications
Highest Inflation Countries (2010–2019 average)
These countries faced persistent inflationary pressures over the decade:
| Country | Avg. CPI (2010–2019) |
| Zimbabwe | 62.0% |
| Angola | 17.0% |
| Burundi | 7.0% |
| Zambia | 8.8% |
| Uganda | 6.2% |
| Tanzania | 7.1% |
Tanzania recorded an average annual CPI of 7.1%, slightly higher than Uganda (6.2%) and comparable to Zambia (8.8%). This places Tanzania among the moderately high-inflation economies in Sub-Saharan Africa during the 2010s.
Tanzania's annual CPI (inflation) showed the following trend:
| Year | CPI Annual Change (%) |
| 2022 | 4.4% |
| 2023 | 3.8% |
| 2024e | 3.1% |
| 2025f | 3.6% |
| 2026f | 4.0% |
| 2027f | 4.0% |
| Country | 2027f CPI (%) |
| Zimbabwe | 8.0% |
| Angola | 12.2% |
| Nigeria | 10.0%+ |
| Ghana | 8.0% |
| Tanzania | 4.0% |
| Kenya | ~5.5% |
| Rwanda | ~4.3% |
| Benin | 1.5% |
1. Tanzania Has Tamed Inflation Over Time
2. A Clear Downward Trend in Inflation
3. Tanzania Performs Better Than Many Peers
💡 What It Tells Us
In short, Tanzania has moved from a high-inflation past to a low-inflation future, showing maturity in economic policy and resilience compared to many of its African peers.
Tanzania’s investment landscape experienced remarkable growth between 2023 and 2024. The number of registered investment projects surged by 71%, from 526 projects in 2023 to 901 projects in 2024. This expansion was accompanied by a significant rise in committed capital investments, which grew by 62.8%, increasing from $5.72 billion in 2023 to $9.31 billion in 2024. In addition, employment opportunities linked to these investments rose sharply, with 212,293 jobs created in 2024, compared to 137,010 jobs in 2023—an increase of approximately 55%. This upward trend reflects strong investor confidence and supportive government policies, as shown by the rising number of permits and approvals issued: work permits grew by 40.8%, Certificates of Incentives by 71.3%, and land rights approvals by 22.2%. Despite a slight decrease in residence permits (-11.4%) and TRA-approved exemptions (-11.9%), the overall environment signals a robust and broad-based investment expansion in Tanzania.
1. Overall Growth in Investment Projects
This 71% increase in investment projects explains why permit and approval activities also expanded.
2. Permits and Approvals Breakdown
| Institution | 2023 | 2024 | Change (Number) | Change (%) |
| Immigration (Residence Permits) | 5,540 | 4,908 | -632 | -11.4% |
| Labour Office (Work Permits) | 5,272 | 7,425 | +2,153 | +40.8% |
| TRA (Tax Exemptions Approved) | 268 | 236 | -32 | -11.9% |
| NIDA (ID Cards/NIN) | 387 | 457 | +70 | +18.1% |
| TIC (Certificates of Incentives) | 526 | 901 | +375 | +71.3% |
| Ministry of Lands (Derivative Rights) | 54 | 66 | +12 | +22.2% |
3. Detailed Explanation
Immigration (Residence Permits)
Labour Office (Work Permits)
TRA (Tax Exemptions Approved)
NIDA (Legal Identity Cards/NIN)
TIC (Certificates of Incentives)
Ministry of Lands (Derivative Rights)
4. Other Major Impacts Related to the Growth
| Indicator | 2023 | 2024 | Growth (%) |
| Jobs Created | 137,010 | 212,293 | +55% |
| Capital Investment | $5.72 billion | $9.31 billion | +62.8% |
Key Takeaways:
1. Strong Positive Growth Trend
This shows that investment is expanding strongly across all important dimensions:
more projects, more money coming in, and more jobs being created.
2. Administrative Efficiency and Policy Support
Policy and administrative support are aligning well with investment growth needs.
3. Higher Demand for Labor (Local and Foreign)
Investment is creating employment opportunities both for Tanzanians and expatriates.
4. More Demand for Land and Legal Compliance
This shows that investors are securing land for long-term operations and formalizing their presence legally (getting IDs/NINs for employees).
5. Selective Tightening in Some Areas
Tanzania is balancing growth with better controls to maximize local economic benefits.
🔵 Summary of the Trend
✅ Tanzania’s investment environment is growing strongly and broadly.
✅ Government facilitation and private sector response are in sync.
✅ Investments are leading to real economy benefits: more jobs, more money, more businesses.
✅ The country is carefully managing some parts (like residence permits and tax exemptions) to safeguard national interests.
Tanzania is solidifying itself as a growing investment destination in 2024 with sustainable, job-creating, and capital-attracting growth trends.
The Producer Price Index (PPI) for Tanzania recorded a modest annual increase of 0.35% from 116.03 in the fourth quarter of 2023 to 116.43 in the fourth quarter of 2024, according to the National Bureau of Statistics. Despite a quarterly decrease of -0.10% between the third and fourth quarters of 2024, the mining and quarrying sector remained stable with a marginal annual growth of +0.03%, while manufacturing recorded a slight annual growth of +0.62%. Meanwhile, the water supply sector under utilities showed a significant surge of +27.39% over the year, indicating infrastructure pressures and rising operational costs. Based on these trends, Tanzania's overall PPI is forecasted to grow slowly by around 1.0% to 2.0% in 2025, driven by stable mining activities, continued utility sector price pressures, and a slow recovery in the manufacturing sector.
1. Overall Producer Price Index (PPI)
2. Sector Performances
➡️ Mining and Quarrying (Weight: 19.08%)
➡️ Manufacturing (Weight: 62.80%)
➡️ Utilities (Electricity, Gas, Water) (Weight: 18.12%)
| Sector | % Increase |
| Manufacture of electrical equipment | +3.84% |
| Water collection, treatment and supply | +3.32% |
| Manufacture of coke and refined petroleum products | +2.69% |
| Manufacture of tobacco products | +2.00% |
| Manufacture of food products | +0.42% |
| Sector | % Decrease |
| Manufacture of rubber and plastics products | -3.25% |
| Manufacture of chemicals and chemical products | -2.90% |
| Manufacture of beverages | -2.07% |
| Manufacture of pharmaceuticals | -1.74% |
| Printing and reproduction of recorded media | -1.66% |
Top 3 Annual Increases:
| Sector | % Increase |
| Water collection, treatment and supply | +27.39% |
| Other manufacturing | +16.33% |
| Manufacture of leather and related products | +13.72% |
Top 3 Annual Decreases:
| Sector | % Decrease |
| Manufacture of tobacco products | -5.86% |
| Printing and reproduction of recorded media | -3.97% |
| Manufacture of chemicals and chemical products | -3.51% |
Notes on Methodology:
1. Manufacturing Sector (Weight: 62.80%)
Meaning:
The manufacturing sector is struggling to push prices up — which usually suggests either:
Key Problem Sectors inside Manufacturing:
These drops tell us some industries are experiencing either oversupply or lower consumer spending (e.g., beverages = people spending less?).
2. Mining and Quarrying (Weight: 19.08%)
Meaning:
The mining sector is very stable — no price pressures.
3. Utilities: Water, Electricity, Gas (Weight: 18.12%)
Meaning:
Costs in water services have skyrocketed — maybe:
Electricity and gas prices are stable though.
Summary: Which sectors tell the bigger story?
| Sector | Trend | Reason |
| Manufacturing | Weak | Slowing demand or competition |
| Mining | Stable | No major shocks |
| Water supply (Utilities) | Very Strong | Rising operational costs or demand |
Why is this happening?
My interpretation:
In short:
👉 Manufacturing is under pressure.
👉 Mining is stable and resilient.
👉 Water utilities are seeing huge price rises, impacting overall production costs.
1. Manufacturing Sector Forecast (Weight: 62.80%)
2025 Forecast:
Reason:
2. Mining and Quarrying Forecast (Weight: 19.08%)
2025 Forecast:
Reason:
3. Utilities (Electricity, Water) Forecast (Weight: 18.12%)
2025 Forecast:
Reason:
Quick Forecast Table for 2025
| Sector | 2024 Annual Change | 2025 Forecast | Why? |
| Manufacturing | +0.62% | +1.0% to +2.0% | Recovery will be slow, demand low |
| Mining & Quarrying | +0.03% | +0.5% to +1.5% | Stable global mineral prices |
| Utilities | -0.26% (overall), Water +27.39% | +5% to +10% (Water) | Water stress, infrastructure costs |
Why?
In 2024, global debt surged to an alarming USD 250 trillion, equal to 237% of global GDP, as reported by the IMF’s 2024 Global Debt Monitor. Of this, USD 98 trillion was public debt (94% of GDP), and over USD 150 trillion was private debt (143% of GDP). These high levels of global debt—especially in public finances—create ripple effects for low-income countries like Tanzania, which recorded a public debt of 43.3% of GDP in the same year. While Tanzania’s debt remains below the average for Low-Income Developing Countries (50% of GDP), increasing global borrowing costs, tighter financial conditions, and slowing global growth (expected to fall from 2.7% to 2.2% over the next five years) pose challenges. These pressures may raise Tanzania’s external debt servicing costs, limit access to affordable financing, and affect government spending and private sector credit growth.
1. Rising Global Public Debt Creates External Pressure
Implication:
As more countries compete for external financing, borrowing costs could rise for Tanzania, especially for external commercial debt. This could lead to higher debt servicing costs and reduce fiscal space for development spending.
2. Reduced Private Sector Borrowing Globally — Credit Squeeze Risk
Implication:
If global banks and investors become more risk-averse, Tanzania's private sector may face tighter access to credit — especially SMEs and startups that depend on microfinance or external funding.
3. Tight Global Financial Conditions — Impact on Debt Sustainability
Implication:
Tanzania may need to shift more toward concessional financing or domestic sources to avoid debt distress. Already, the country spends about 14–16% of government revenue on debt service, a figure that could increase if global rates stay high.
4. Risk of Slower Global Growth — Impacts on Tanzania’s Exports and Revenue
Implication:
Lower global demand could mean slower foreign exchange earnings, potentially weakening the shilling, reducing government revenue, and making external debt more expensive to repay.
| Impact Area | What’s Happening Globally | Potential Effect on Tanzania |
| Public Debt | ↑ USD 98T globally, 94% of GDP | ↑ Risk of tighter borrowing space, higher rates |
| Private Sector Credit | ↓ Private debt globally to 143% of GDP | ↓ Credit access, especially for SMEs |
| Interest Rates | ↑ Debt servicing costs rising globally | ↑ Tanzania’s external debt servicing burden |
| Global Growth | ↓ Expected growth from 2.7% to 2.2% | ↓ Export demand, ↓ forex, ↑ fiscal pressure |
| Category | Global Figures | Tanzania Figures |
| Total Debt | USD 250 trillion (237% of global GDP) | — |
| Public Debt | USD 98 trillion (94% of global GDP) | TZS 89.3 trillion (approx. USD 36B)¹ |
| Private Debt | >USD 150 trillion (143% of global GDP) | — |
| • Household Debt | USD 58.5 trillion (54% of global GDP) | — |
| • Corporate Debt | USD 91.5 trillion (90% of global GDP) | — |
| Tanzania Public Debt-to-GDP | — | 43.3% of GDP |
| LIDC Average Public Debt | — | 50% of GDP |
| Global Medium-Term Growth | ↓ from 2.7% to 2.2% (5-year forecast) | Risk of lower export demand |
| Tanzania External Debt Service | — | ~USD 1.5 billion (FY2022/23) |
Introduction
In 2025,U.S. President Donald Trump’s proposed tariff hikes—including a staggering increase from 34% to 145% on Chinese imports and a flat 10% tariff on key trade partners such as the European Union (18.5% of U.S. imports), Japan (4.5%), Vietnam (4.2%), and India (2.7%)—have reignited fears of a global trade war. These tariffs affect over 60% of U.S. imports, threatening to reduce global trade growth by up to 1.5 percentage points and wipe out US$300–500 billion in trade value in 2025.
While the intention is to protect American industries, the ripple effects are expected to disrupt global supply chains, increase inflation in the U.S., and reduce market access for exporters across developing countries. Africa, with average import tariffs around 8%, may experience a 1–2% decline in export revenue, particularly in agriculture and textiles. In East Africa, countries like Kenya, Ethiopia, and Tanzania, which rely on apparel and commodity exports, face uncertain prospects as U.S. demand contracts and global trade flows reorient. For Tanzania, while direct U.S. exposure is limited, the indirect effects—such as reduced demand for coffee, tobacco, and minerals—may lead to a 0.3–0.5% drop in GDP growth and 1–2% export revenue loss.
🌍 Global
Trade Growth & Trends (2024–2025)
Tariff Trends
Key Issues
🌍 Africa
Tariff Trends
Trade Growth
Challenges
🌍 East Africa
East Africa isn't isolated in most figures but falls under Africa or Rest of Asia depending on the context. However, based on patterns:
Trade Position
Key Challenges
Tanzania-Specific Insights
Tanzania isn’t specifically mentioned in the report, but here are contextual implications:
Tariffs & Trade Policy
Impacts
Strategic Focus Areas
| Indicator | Global | Africa | East Africa (Est.) | Tanzania (Est.) |
| 2024 Trade Value (US$) | $33 trillion | N/A | N/A | N/A |
| Import Tariffs (avg.) | ~2% (dev’d) | ~8% | ~8% | ~8% |
| Export Tariffs Faced | ~1.9% | ~3.9% | ~3.5–4% | ~4% |
| Tariff on Agriculture (MFN avg.) | ~20% | High | High | High |
| Tariff Peaks (15%+) in Food/Apparel | 8% of trade | Common | Common | Likely similar |
| Intra-Regional Tariff Preference Margin | 4.6% (Africa) | 4.6% | ~4–5% | 4–5% (EAC) |
United States Trade Overview (2024–Q4 2024)
📦 Goods Trade
📈 Services Trade
⚖️ Trade Balance (Goods)
| Trade Partner | Trade Balance (US$ Billion) | Change in Q4 |
| China | -355 (deficit) | -14 |
| European Union | -241 (deficit) | -12 |
| Mexico | -178 (deficit) | -6 |
| Viet Nam | -110 (deficit) | -5 |
| Canada | -83 (deficit) | +5 |
| Japan | -56 (deficit) | +2 |
| India | -37 (deficit) | 0 |
🔄 Trade Dependence Patterns (2024 Trends)
👉 This shift reflects supply chain diversification (friendshoring/nearshoring), aiming to reduce reliance on China while increasing ties with ASEAN countries.
📉 Trade Risks for the U.S. (2025 Outlook)
📊 Sector-Specific Trade Involvement
U.S. trade deficits are high in:
Exports are strong in:
📊 Tariff Hike Summary (as proposed)
| Country | Share of U.S. Imports | Previous Rate | Updated Rate | % Change in Tariff Burden |
| China | 13.4% | 34% | 145% | +111 percentage points |
| EU | 18.5% | 20% | 10% | -10pp (may lower?) |
| Japan | 4.5% | 24% | 10% | -14pp |
| Vietnam | 4.2% | 46% | 10% | -36pp |
| South Korea | 4% | 25% | 10% | -15pp |
| Taiwan | 3.6% | 32% | 10% | -22pp |
| India | 2.7% | 26% | 10% | -16pp |
| UK | 2.1% | 10% | 10% | No change |
| Switzerland | 1.9% | 31% | 10% | -21pp |
| Thailand | 1.9% | 36% | 10% | -26pp |
| Malaysia | 1.6% | 24% | 10% | -14pp |
| Brazil | 1.3% | 10% | 10% | No change |
1. 🧨 China: Shockwaves from 145% Tariff
2. 🔄 Redirection of Trade (Global Supply Chains)
3. 💰 Consumer Inflation in the U.S.
4. 📉 Global Trade Contraction
5. 🌍 Developing Countries at Risk
6. 💼 Business Uncertainty & Investment Drops
| Sector | Expected Impact of Tariffs |
| Electronics | Severe disruption; China, Taiwan, Korea hit |
| Apparel | Vietnam, India, Bangladesh lose cost edge |
| Automotive | EU, Japan, South Korea exports face more hurdles |
| Agriculture | If retaliation hits, U.S. farmers may lose markets |
| Machinery/Tools | Prices rise, sourcing shifts away from Asia |
| Metric | Effect (2025 if implemented) |
| Global Trade Growth | ↓ 1–1.5 percentage points |
| U.S. Consumer Prices | ↑ short-term inflation |
| China’s Export Surplus | ↓ significantly |
| Global Supply Chain Stability | ↓ major disruptions |
| Investment & FDI Flows | ↓ reduced investor confidence |
| Developing Country Exports | ↓ unless they shift to non-U.S. markets |
🌍 GLOBAL LEVEL IMPACT
🔺 Key Figures
🔁 Trade Impact
🌍 AFRICA LEVEL IMPACT
📦 Africa–U.S. Trade Context
🔺 Effects on Africa
| Impact Area | Expected Outcome |
| Global trade slowdown | ↓ African export demand (esp. commodities) |
| Tariff escalation on Asia | ↑ Temporary opportunity for African exports |
| Global value chain shifts | ↑ Opportunity to plug into new niches, but limited by infrastructure |
| Inflation in U.S. | ↓ Purchasing power, ↓ demand for African goods |
🧾 Estimated Figures
🌍 EAST AFRICA LEVEL IMPACT
📦 East Africa–U.S. Trade Context
🔺 Effects on East Africa
| Area | Expected Impact |
| Textile/apparel exports | Could gain from China's loss, but East Asia still dominates |
| Agricultural exports | Remain vulnerable if U.S. demand falls |
| Logistics and shipping | May suffer from weaker global trade flows |
| AGOA Program | Still allows some duty-free access to U.S. |
🧾 Estimated Figures
📦 Tanzania–U.S. Trade Snapshot
🔺 Effects on Tanzania
| Channel | Impact |
| Export opportunities | Limited short-term benefit if AGOA remains |
| U.S. imports (machinery) | ↑ Cost of imported machinery, industrial tools |
| Export of value-added goods | Still limited by low capacity, tariffs won’t change much |
| Global price shocks | ↓ Commodity prices due to lower global demand |
🧾 Estimated Figures
SUMMARY TABLE
| Region | Key Exposure | Projected Trade Impact | GDP Effect |
| Global | Value chains, consumer inflation | ↓ $300–500B in trade | ↓ 0.5–1.5% |
| Africa | Commodity & textile exports, U.S. demand | ↓ up to 2% exports | ↓ 0.5–1% |
| East Africa | Coffee, apparel exports (AGOA reliance) | Mixed (↓ demand, ↑ market share) | ↓ 0.5–1% |
| Tanzania | Agriculture, minerals, imported machinery | ↓ 1–2% export revenue | ↓ 0.3–0.5% |
Tanzania's external debt reached USD 33.91 billion in January 2025, placing it among the top 10 most indebted African countries. This marks a significant rise from USD 2.47 billion in 2011, reflecting increased borrowing for infrastructure and economic development. The central government holds 77.4% of the debt, with USD 185.4 million paid for debt servicing in December 2024. Despite this, Tanzania’s debt-to-GDP ratio remains at 47.2%, below the IMF’s 55% risk threshold. However, careful debt management is crucial to ensure economic stability and sustainable growth.
As of January 2025, Tanzania's external debt stood at approximately USD 33,905.10 million, a slight decrease from USD 34,075.50 million in December 2024. This positions Tanzania among the top ten African countries with substantial external debt.
Historical Context: Over the years, Tanzania's external debt has exhibited significant growth:
Composition of External Debt: The central government holds the majority of this debt, accounting for approximately 77.4% as of December 2024. The remaining portion is attributed to the private sector.
Debt Service and Disbursements: In December 2024, Tanzania received external loan disbursements totaling USD 376.8 million, primarily allocated to the central government. During the same period, the country serviced its external debt with payments amounting to USD 185.4 million, which included USD 111.2 million in principal repayments and USD 74.2 million in interest payments.
Public Debt Relative to GDP: As of November 2024, Tanzania's total public debt, encompassing both external and domestic obligations, was USD 38,243.5 million. This figure represents approximately 47.2% of the nation's Gross Domestic Product (GDP).
International Financial Support: In December 2024, the International Monetary Fund (IMF) completed a review under the Extended Credit Facility arrangement with Tanzania, resulting in an immediate disbursement of about USD 148.6 million. Additionally, the IMF approved a disbursement of approximately USD 55.9 million under the Resilience and Sustainability Facility, totaling USD 204.5 million in financial support.
These figures underscore Tanzania's significant external debt position within Africa, highlighting the importance of ongoing fiscal management and international financial collaborations.
1. Tanzania’s Debt Growth is Significant
2. Tanzania is Among Africa’s Top 10 Most Indebted Countries
3. Most of Tanzania’s Debt is Public
4. Debt Servicing is a Major Challenge
5. IMF and International Financial Support Play a Key Role
6. Tanzania’s Debt-to-GDP Ratio is Still Manageable
7. Comparison with Other African Countries
Tanzania's rising external debt reflects ambitious economic growth plans but also poses risks of debt distress if borrowing continues at this rate without sufficient revenue growth. Proper debt management, economic diversification, and increased exports are crucial to ensuring sustainability.
As of February 28, 2025, the Bank of Tanzania’s total assets grew by 3.18%, reaching TZS 26.05 trillion, up from TZS 25.24 trillion in January. This growth was driven by a 15% increase in cash reserves (TZS 6.05 trillion) and a 10.2% rise in foreign currency marketable securities (TZS 8.53 trillion). Meanwhile, equity surged by 15.3%, supported by a 16% rise in reserves (TZS 2.41 trillion). However, advances to the government declined by 17.1%, reflecting tighter monetary policy, while currency in circulation fell by 1.4%, signaling a possible shift towards digital transactions or inflation control measures.
1. Total Assets:
2. Total Liabilities:
3. Equity:
Key Takeaways:
✅ Increase in Assets (+3.18%), driven by growth in foreign marketable securities, loans, and cash reserves.
✅ Increase in Liabilities (+2%), with a rise in bank deposits and foreign currency liabilities.
✅ Growth in Equity (+15.3%), mainly due to an increase in reserves.
⚠️ Decline in Advances to Government (-17.1%), indicating reduced central bank lending to the government.
⚠️ Slight decrease in Currency Circulation (-1.4%), potentially reflecting economic factors like lower cash demand.
The financial statement shows key trends in Tanzania’s monetary system and economic conditions.
1. Financial Stability and Growth
✅ Total Assets Increased (+3.18%)
✅ Increase in Equity (+15.3%)
2. Monetary Policy Implications
⚠️ Decline in Advances to Government (-17.1%)
⚠️ Decrease in Currency Circulation (-1.4%)
✅ Increase in Bank Deposits (+14.8%)
3. External Sector and IMF Involvement
✅ Increase in IMF Quota & Special Drawing Rights (SDRs) (+4.7%)
✅ Increase in Foreign Currency Liabilities (+1.1%)
4. Potential Risks & Considerations
⚠️ Reduction in Government Securities (-1.7%)
⚠️ Deposits from Other Sources Dropped (-4.8%)
✅ The Bank of Tanzania’s financial position is strong, with rising reserves, improved liquidity, and controlled government lending.
⚠️ However, the decline in cash circulation and advances to the government may indicate monetary tightening and a possible slowdown in cash-based economic activities.
💡 Recommendation: Monitor government borrowing and liquidity trends to ensure balanced growth without excessive tightening.
In January 2025, the Tanzanian Shilling traded at an average of TZS 2,454.04 per USD, reflecting a 1.37% depreciation from TZS 2,420.84 in December 2024. However, on an annual basis, the Shilling appreciated by 2.6%, showing long-term stability. Foreign exchange market activity declined, with transactions dropping from USD 95.7 million in December 2024 to USD 16.3 million, while the Bank of Tanzania intervened by selling USD 7 million to stabilize the currency. Despite short-term pressures, foreign exchange reserves rose to USD 5,323.6 million, covering 4.3 months of imports, ensuring continued exchange rate stability.
1. Exchange Rate Movement: Slight Depreciation in January 2025
What It Means:
✅ The Shilling remains relatively stable, with only a minor depreciation (1.37%) month-over-month.
✅ Annual appreciation (2.6%) suggests a stronger Shilling compared to early 2024, reflecting better forex reserves and trade performance.
⚠ The slight monthly depreciation indicates short-term pressures, possibly due to increased import demand or external debt repayments.
2. Foreign Exchange Market Activity: Declining Transactions
What It Means:
✅ Lower forex market activity suggests reduced speculative trading, contributing to exchange rate stability.
✅ Bank of Tanzania’s intervention helped control excessive depreciation, ensuring Shilling stability.
⚠ A decline in foreign exchange market transactions could indicate lower foreign investment or trade activity.
3. Foreign Exchange Reserves Support Stability
What It Means:
✅ Stronger forex reserves contribute to Shilling stability by ensuring the country can meet external obligations.
✅ Sufficient reserves reduce pressure on the Shilling, helping manage exchange rate fluctuations.
Summary of Key Trends
| Indicator | January 2025 | Comparison |
| Exchange Rate (TZS/USD) | 2,454.04 | Depreciated from 2,420.84 in Dec 2024 (-1.37%) |
| Annual Shilling Performance | +2.6% appreciation | Stronger than Jan 2024 |
| Forex Market Transactions | USD 16.3 million | Lower than USD 95.7 million in Dec 2024 |
| Bank of Tanzania Intervention | USD 7 million sold | To stabilize exchange rate |
| Foreign Exchange Reserves | USD 5,323.6 million | Covers 4.3 months of imports |
Economic Implications of Shilling Stability
🔹 Positive Signs:
✅ Annual appreciation (+2.6%) shows long-term strength of the Shilling.
✅ Sufficient foreign exchange reserves (USD 5.3 billion) provide stability.
✅ Bank of Tanzania’s intervention controlled excessive depreciation.
🔸 Challenges:
⚠ Short-term depreciation (-1.37%) suggests forex market pressure.
⚠ Declining forex market activity may indicate lower trade or investor participation.
⚠ Heavy reliance on USD (68.1% of external debt) increases exchange rate risks.
1. The Shilling Depreciated Slightly in the Short Term (-1.37%)
What it Means:
✅ The depreciation is minimal, meaning the Shilling remains largely stable.
⚠ Increased USD demand could signal rising import costs or capital outflows.
✅ Central Bank intervention helped prevent sharp currency fluctuations.
2. Long-Term Strength: The Shilling Appreciated by 2.6% Year-on-Year
What it Means:
✅ Tanzania’s economy is stable enough to maintain long-term Shilling strength.
✅ A stronger Shilling benefits businesses by reducing the cost of imported goods and debt repayments.
3. Forex Market Activity Dropped Significantly
What it Means:
⚠ Reduced forex transactions could indicate lower trade activity or reduced foreign investment inflows.
✅ Lower speculation in the forex market contributes to exchange rate stability.
4. Strong Forex Reserves Support Stability
What it Means:
✅ Sufficient reserves reduce exchange rate risks, ensuring the government can manage forex fluctuations.
✅ The Shilling has a strong backup, reducing the likelihood of a major devaluation.
🔹 Positive Signs:
✅ The Shilling remains stable overall, with only minor fluctuations.
✅ Long-term appreciation (+2.6%) shows economic resilience.
✅ Strong forex reserves (USD 5.3 billion) help maintain stability.
🔸 Challenges:
⚠ Short-term depreciation (-1.37%) could indicate temporary pressure on the currency.
⚠ Declining forex market transactions suggest lower trade or investor activity.
⚠ High USD-denominated debt (68.1%) makes the economy vulnerable to exchange rate fluctuations.
Borrowing Costs Remain High, Savings Offer Mixed Returns
In January 2025, Tanzania's lending interest rates remained high, with the overall lending rate at 15.73%, slightly up from 15.70% in December 2024. Meanwhile, the negotiated lending rate stood at 12.80%, indicating that creditworthy borrowers could secure better terms. On the savings side, the overall deposit rate declined slightly to 8.31%, but negotiated deposit rates increased to 11.80%, encouraging large-scale deposits. The interest rate spread narrowed to 5.63 percentage points from 6.68% in January 2024, suggesting increased competition in the banking sector and potential future adjustments in lending rates.
Lending Interest Rates (January 2025)
Deposit Interest Rates (January 2025)
Interest Rate Spread
These figures indicate that lending rates remained stable with slight upward movement, while deposit rates showed mixed trends, with an increase in negotiated deposit rates. The interest rate spread narrowing suggests banks are slightly reducing the gap between borrowing and lending costs.
Key Takeaways: