How fast is private-sector credit growing in Tanzania?

Private-sector credit grew 33.0% in August 2026, led by transport and communication (77.2%) and mining (75.9%); manufacturing credit grew 12.9%.

Are Tanzania's external debt arrears a concern?

External arrears reached about TZS 2.75 trillion in August 2026, nearly double the TZS 1.43 trillion of a year earlier, with commercial creditors accounting for roughly 56 percent. The trend deserves monitoring even though arrears remain small relative to the TZS 97.0 trillion external stock.

Is the shilling the main driver of Tanzania's inflation?

Not on the evidence in the review. Fuel prices, transport fares and services costs explain most of the rise, while food inflation has eased. But a weaker shilling raises the cost of imported fuel and inputs, so exchange-rate pass-through is a risk to monitor, especially with the current account deficit widening to USD 2,481.8 million.

How much did the Tanzanian shilling depreciate in August 2026?

The shilling averaged TZS 2,657.01 per US dollar in August 2026, versus TZS 2,653.52 in July. On an annual basis it depreciated 6.7%, largely a base effect from a sharp appreciation in August 2025 (TZS 2,490.16).

What drove spending in FY2025/26?

Total spending was TZS 48,451.0 billion, 0.7% below budget. Development spending was TZS 17,057.2 billion (35% of the total), the wage bill reached TZS 13,279.3 billion, and interest payments were TZS 5,605.3 billion, 13.7% below budget.

What was Zanzibar's inflation rate in August 2026?

Headline inflation eased to 5.6% from 6.0% in July but remained above 3.9% in August 2025. Food inflation was 9.8% and non-food 2.2%. Prices fell 0.2% month on month.

Why did Zanzibar's goods exports more than double?

Goods exports rose to US$69.2 million, of which cloves were US$42.5 million (about 61%), with volumes rising from 0.8 to 7.2 thousand tonnes and unit prices 27% higher.

How did Zanzibar's government perform in August 2026?

Resources were TZS 251.3 billion (10.4% above target, helped by World Bank budget support) while spending was TZS 459.0 billion, 73.3% on development projects.

Which currencies is Tanzania's external debt denominated in?

The US dollar accounts for 64.9% of disbursed outstanding external debt, the euro 18.4%, the Chinese yuan 6.7% and other currencies 10.0%.

What is external debt used for in Tanzania?

Balance of payments and budget support is the largest use at 23.6%, followed by transport and telecommunications at 21.8%, social welfare and education at 19.3%, and energy and mining at 12.6%.

Who owes Tanzania's external debt?

The central government owes USD 30,751.9 million (83.7%) and the private sector USD 5,979.6 million (16.3%). Public corporations have no outstanding external debt.

Who holds Tanzania's domestic debt?

Commercial banks hold 28.4%, pension funds 27.6%, the Bank of Tanzania 17.2%, insurance companies 5.0%, BoT special funds 2.1% and others 19.6%.

Which instruments make up domestic debt?

Government securities are 89.8% of the stock, mainly Treasury bonds at 85.1% and Treasury bills at 4.4%. Overdraft is 10.2%.

What was domestic debt service in August 2026?

Domestic debt service was TZS 633.4 billion, of which TZS 163.5 billion was principal repayment and TZS 469.9 billion was interest.

How much does Tanzania earn from services exports?

Service receipts rose 11.7% to USD 8,255.4 million in the year to August 2026: travel USD 4,389.7 million, transport USD 3,303.3 million and other services USD 562.4 million.

What are Tanzania's services payments?

Service payments rose to USD 3,498.2 million from USD 3,196.2 million, driven largely by freight payments of USD 1,683.4 million, up from USD 1,300.4 million.

#TanzaniaEconomy - TICGL | Tanzania Investment and Consultant Group Ltd

Disclaimer & scope

This page is prepared by TICGL/TERI for research and information purposes. It is not investment, legal, tax or financial advice and does not state the position of the Bank of Tanzania or the Government of Tanzania. All macro figures are taken from the Bank of Tanzania's September 2026 Monthly Economic Review (August 2026 data; recent figures are provisional). Derived ratios (real rates, shares, percentage changes) are TICGL/TERI computations from the cited BoT tables and are not forecasts. Where two BoT tables differ slightly (for example goods imports of USD 17,770.9m in Table 2.7.1 versus USD 17,771.7m in Table A7), this page uses the table cited next to the figure.

00 — OverviewExecutive Summary

Tanzania's August 2026 macro picture is one of strong nominal momentum with a tightening policy backdrop and a more expensive external bill. The Bank of Tanzania raised the Central Bank Rate to 6.25% in July to contain second-round effects from higher energy, fertiliser and transport costs linked to the Middle East conflict. Headline inflation is still inside the 3–5% target band at 4.3%, but its composition has changed: core inflation (4.1%) now contributes 3.1 of the 4.3 percentage points, against 1.5 of 3.4 a year ago, while unprocessed food has faded from 1.8 to 0.8 points. Private-sector credit is growing at 33.0% — led by transport and communication (77.2%) and mining (75.9%) — extended broad money (M3) is up 25.5%, and the shilling has weakened 6.7% year on year. Abroad, exports of goods and services rose 16.4% to USD 20,216.2 million, but imports rose faster (21.4%), and the current-account deficit widened to USD 2,481.8 million, with petroleum imports up 51.7%.

Taken together, the data describe an economy whose nominal momentum is intact but whose external bill and cost of money are rising: policy is tighter, credit is expanding fast in a few sectors, the shilling is softer, and the external deficit is widening even as exports reach a record.

Real lending rate (computed)

≈10.3%

15.05% overall lending vs 4.3% inflation

Core share of inflation

3.1 of 4.3 pp

Aug-25: 1.5 of 3.4 pp

Gross official reserves

USD 5,888.2M

4.2 months of imports

Current-account deficit

USD 2,481.8M

Year to Aug-26; Aug-25: USD 1,700.9M

The central reading of the August 2026 data

Headline numbers look benign (inflation inside target, revenue above target, reserves above benchmark), but the composition underneath has shifted: inflation is now core-driven rather than food-driven, the policy rate has gone up, lending rates sit at 15.05% overall, government yields reach 11.48% at the 25-year point, imports are growing faster than exports, and domestic debt has reached TZS 40.9 trillion. Those are the variables to watch over the next quarter.

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Read this alongside TICGL/TERI's investment-climate analysis

The macro conditions on this page are one half of the picture. The other half — the opportunities and risks that shape the investment climate in Tanzania in 2026 — is set out in TICGL/TERI's investment-climate assessment.

Read: Opportunities & Risks in Tanzania, 2026 → Invest in Tanzania →

A1 — Macro DashboardTanzania's Macro Variables at a Glance, August 2026

The table below puts the main macro variables in one view, with the prior-year comparison and the direction of travel.

Variable	Aug-25 (or prior year)	Jul-26	Aug-26	Why it matters to an investor
Headline inflation (y/y)	3.4%	4.2%	4.3%	Inside the 3–5% target; sets the nominal-to-real bridge in any model
Core inflation (y/y)	2.0%	3.9%	4.1%	Underlying pressure; rising steadily since March 2026
Food inflation (y/y)	7.7%	4.1%	3.7%	Eased on staple supply; El Niño is the upside risk
Energy, fuel & utilities (y/y)	2.6%	6.9%	8.5%	Highest since Oct-24; charcoal and firewood driven
Central Bank Rate	5.30% (Repo rate)	6.25%	6.25%	Less accommodative stance; corridor 4.75%–7.75%
Overall lending rate	15.07%	15.10%	15.05%	Anchor for TZS cost of debt
Negotiated (prime) lending rate	12.72%	12.04%	11.93%	Rate negotiated by strong corporate borrowers
12-month deposit rate	9.99%	9.34%	9.36%	Opportunity cost of local equity
Overall Treasury bill yield	6.83%	4.74%	4.86%	Short-end risk-free reference
25-year Treasury bond yield	14.42%	11.89%	11.48%	Long-end benchmark for government borrowing
Private-sector credit growth (y/y)	16.2%	31.2%	33.0%	Financing availability — and a credit-quality watch item
Extended broad money (M3), y/y	20.5%	26.9%	25.5%	Moderating with tighter stance
TZS per USD (monthly average)	2,490.16 (Aug-25)	2,653.52	2,657.01	Shilling −6.7% y/y; drives USD-denominated cost and debt
Gross official reserves	USD 6,329.0M (Dec-25)	—	USD 5,888.2M	4.2 months of projected imports; above benchmark
Current-account balance (12 mo.)	−USD 1,700.9M	—	−USD 2,481.8M	Widening external gap; FX pressure risk
Exports of goods & services (12 mo.)	USD 17,371.1M	—	USD 20,216.2M	+16.4%; gold USD 5,625.0M
Imports of goods & services (12 mo.)	USD 17,517.7M	—	USD 21,269.2M	+21.4%; petroleum +51.7%
Total national debt	USD 49,086.4M	USD 51,350.8M	USD 52,224.4M	+1.7% m/m; external 70.3%
External debt arrears	USD 578.9M	USD 984.7M	USD 1,040.0M	Rising; commercial arrears USD 417.8M
Domestic debt stock	TZS 37,309.8bn	TZS 39,472.2bn	TZS 40,899.5bn	+3.6% m/m on bond issuance
Government revenue, Jun-26	—	—	TZS 4,658.2bn	+5.4% vs monthly target
Zanzibar headline inflation	3.9%	6.0%	5.6%	Food-driven; fuel-linked transport costs
Zanzibar current account (12 mo.)	+USD 799.3M	—	+USD 953.7M	Tourism-led surplus
World GDP growth 2026 (IMF)	—	—	3.0%	Resilient, but Hormuz disruption raises energy and fertiliser costs

Sources: BoT MER Sept 2026 — Tables 2.1.1, 2.2.1, 2.3.1, A3, A4, A8, A9, A10; Sections 2.5–2.7, 3.1–3.3. Repo rate for Aug-25 from Table A4; Dec-25 reserves from Table A1 (2025p). Real lending rate is a TICGL/TERI computation.

Longer-run context: 2018–2025

Before the 2026 moves, Tanzania's real GDP growth had recovered from 3.6% in 2020 to 5.9% in 2025, inflation had stayed in a 3.1%–4.3% band, private-sector credit had deepened from 13.8% to 19.1% of GDP, and the current-account deficit had narrowed from a peak of USD 5,482.2 million (2022) to USD 2,049.4 million (2025). The August 2026 data therefore describe a widening from a stronger base, not a collapse.

Real GDP Growth and Inflation, 2018–2025

Percent (GDP at constant 2015 prices; CPI inflation)

Private-Sector Credit to GDP, 2018–2025

Percent of GDP

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A2 — Prices & InflationInflation Has Changed Character: From Food-Driven to Core-Driven

Headline inflation rose to 4.3% in August 2026 from 4.2% in July and 3.4% a year earlier — still inside the national 3–5% target and the EAC (8%) and SADC convergence benchmarks. The uptick reflected lagged pass-through of earlier fuel-price increases to bus, taxi and motorcycle-taxi fares. Month on month, prices rose 0.1%, after −0.1% in July.

The more important story for any investor is composition. Core inflation, which excludes unprocessed food, energy and utilities, rose to 4.1% (2.0% a year ago) and has climbed every month since March 2026. Services inflation is at 5.9% (0.8% a year ago). Transport inflation has been flat at 13.8% for two months after jumping from 4.2% in March to 9.2% in April and 13.6% in June. Food inflation, by contrast, eased to 3.7% from 7.7%, as maize, rice and beans were cheaper than a year earlier.

Twelve-Month Inflation: Headline, Core, Food and Energy

Percent, Aug-25 to Aug-26 (BoT Tables A9(i) and A9(ii))

Contribution to Headline Inflation

Percentage points: core, energy, unprocessed food

Underlying Pressures: Core, Services and Goods

Twelve-month change, percent

Inflation by main group, August 2026

Group	CPI weight (%)	Aug-25	Jul-26	Aug-26	Change vs Aug-25 (pp)
Food & non-alcoholic beverages	28.2	7.7	4.1	3.7	−4.0
Transport	14.1	1.4	13.8	13.8	+12.4
Housing, water, electricity, gas & fuels	15.1	2.1	1.6	2.5	+0.4
Clothing & footwear	10.8	1.7	1.6	1.8	+0.1
Furnishings & household maintenance	7.9	2.4	2.2	2.6	+0.2
Restaurants & accommodation	6.6	0.9	2.7	3.0	+2.1
Information & communication	5.4	0.4	0.6	1.5	+1.1
Health	2.5	1.3	1.4	1.5	+0.2
Education services	2.0	3.0	2.8	3.2	+0.2
Insurance & financial services	2.1	0.6	0.2	0.2	−0.4
Personal care & miscellaneous	2.1	2.3	3.4	3.3	+1.0
Recreation, sport & culture	1.6	1.4	0.7	0.7	−0.7
Alcoholic beverages & tobacco	1.9	2.9	1.9	1.5	−1.4
Headline (all items)	100.0	3.4	4.2	4.3	+0.9

Source: BoT MER Sept 2026, Table 2.1.1. Core 4.1% (weight 73.9); non-core 4.8% (26.1); services 5.9% (37.2); goods 3.5% (62.8). "Change vs Aug-25" computed by TICGL/TERI.

What the composition of inflation tells us

Inflation is no longer food-led and volatile. Services inflation at 5.9% and transport at 13.8% matter most for logistics-heavy, labour-heavy and fuel-intensive activities; restaurants & accommodation (3.0%) and information & communication (1.5%, up from 0.4%) show pricing power returning in consumer services. Cost pressure is therefore uneven across fuel, wages, utilities and imported inputs, rather than uniform.

Food supply and fuel: the swing factors

Food stocks: National Food Reserve Agency stocks were 484,332 tonnes at end-August 2026, against 537,571 tonnes a year earlier; the Agency bought 89.5 tonnes and released 2,813.7 tonnes of maize and paddy in the month.
Domestic fuel: petrol and diesel prices in Dar es Salaam remained well below June 2026 levels, yet global refined-product prices (white products USD 1,167.21/tonne in August) point to upside risk for domestic energy inflation.
El Niño: above-normal Vuli rainfall could disrupt transport and food distribution; drought in southern SADC may lift regional food demand — a relevant signal for agribusiness and export-crop projects.

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A3 — Rates, Money & CreditThe Cost of Money: Higher Policy Rate, Falling Yields, Booming Credit

The Monetary Policy Committee's July 2026 decision lifted the Central Bank Rate to 6.25%; the Bank has since kept the 7-day interbank rate inside a 4.75%–7.75% corridor. The 7-day IBCM-based overall interbank rate averaged 6.67% in August (6.57% in July). Total IBCM turnover fell to TZS 4,566.2 billion from TZS 5,627 billion, with the 7-day segment at 47.8% of transactions. Reverse-repo use rose as a few banks covered temporary liquidity shortfalls.

The paradox investors should note: while the policy rate rose, government yields fell sharply year on year and credit accelerated. Treasury-bill auctions drew bids of TZS 981.7 billion against TZS 580 billion offered (bid-to-cover 1.7; TZS 520.8 billion accepted; weighted average yield 4.86%, up from 4.74%). Bond auctions (15- and 25-year, TZS 621.5 billion offered) drew TZS 2,136.3 billion — bid-to-cover 3.4 — and the 25-year yield fell to 11.48% from 11.89% at the previous auction.

Government Yield Curve: Aug-25 vs Aug-26

Treasury bond yields by tenor, percent

Overall Treasury Bill Yield, Aug-25 to Aug-26

Percent

Treasury yields by tenor

Instrument	Aug-25	Jun-26	Jul-26	Aug-26	Change vs Aug-25 (pp)
35-day T-bill	6.50	2.82	2.34	2.11	−4.39
91-day T-bill	7.36	3.56	3.40	3.42	−3.94
182-day T-bill	7.46	4.98	4.74	5.12	−2.34
364-day T-bill	6.79	6.65	7.07	6.70	−0.09
2-year bond	12.17	8.36	8.40	8.40	−3.77
5-year bond	13.18	9.54	9.54	9.54	−3.64
10-year bond	13.74	10.39	10.87	10.87	−2.87
15-year bond	13.91	10.39	10.39	10.55	−3.36
20-year bond	14.50	10.43	11.33	11.33	−3.17
25-year bond	14.42	11.89	11.89	11.48	−2.94

Source: BoT MER Sept 2026, Table A4 (Aug-26 provisional). Differences computed by TICGL/TERI.

Bank lending and deposit rates

Lending Rates, Deposit Rate and Spread, Jan–Aug 2026

Percent (BoT Table 2.3.1)

Rate	Jan-26	Feb-26	Mar-26	Apr-26	May-26	Jun-26	Jul-26	Aug-26
Savings deposit rate	2.94	2.98	2.89	2.91	2.85	2.90	2.90	2.77
Overall lending rate	15.10	15.11	15.11	15.33	15.32	15.22	15.10	15.05
Short-term lending (up to 1 yr)	15.49	15.41	15.45	15.31	15.38	15.38	15.54	15.31
Negotiated lending rate	12.25	12.19	12.21	12.56	11.90	11.93	12.04	11.93
Overall time deposit rate	8.33	8.32	8.33	8.54	8.43	8.69	8.78	8.78
12-month deposit rate	9.70	9.82	9.60	9.81	10.17	9.72	9.34	9.36
Negotiated deposit rate	11.74	11.48	11.57	11.37	11.25	11.17	10.99	11.06
Short-term spread	5.79	5.59	5.85	5.50	5.22	5.66	6.20	5.95

Source: BoT MER Sept 2026, Table 2.3.1. Foreign-currency lending (Table A4): overall lending rate 8.96%, up-to-1-year 10.03%, over-5-year term loans 8.96%; foreign-currency 12-month deposit rate 5.31%.

Money supply and private-sector credit

Extended broad money (M3) grew 25.5% in the year to August 2026 (26.9% in July), reaching TZS 72,121.0 billion; broad money (M2) grew 28.1% and reserve money (M0) 27.4%. Credit to the private sector grew 33.0% to TZS 55,229.9 billion, from TZS 41,530.9 billion a year earlier. Net foreign assets fell 13.9% to TZS 13,575.4 billion — the Bank of Tanzania's NFA down 1.5% and other depository corporations' NFA turning negative (−TZS 155.5 billion) — so the money-supply expansion is domestically driven, not reserve-driven.

Extended Broad Money (M3), Aug-25 to Aug-26

TZS billion

Credit to the Private Sector

TZS billion (claims on non-government sector)

Annual Credit Growth by Economic Activity: Aug-25 vs Aug-26

Percent (BoT Table 2.2.2)

Sector	Aug-25	Jun-26	Jul-26	Aug-26	Share of select credit, Aug-26 (%)
Transport & communication	18.8	59.5	66.0	77.2	6.0
Mining & quarrying	3.2	39.9	65.2	75.9	n/a
Trade	29.2	46.4	43.5	47.1	15.8
Building & construction	14.8	34.4	38.9	41.8	4.8
Agriculture	30.1	30.1	37.3	38.4	13.8
Personal	15.0	21.8	24.7	24.9	34.1
Hotels & restaurants	11.4	0.9	25.1	24.6	n/a
Manufacturing	3.4	8.3	5.1	12.9	7.4

Source: BoT MER Sept 2026, Tables 2.2.2 and Chart 2.2.6 (shares are of the selected activities charted by BoT, which do not sum to 100%). Personal loans, mostly supporting MSMEs, remain the largest component at 34.1%.

Credit boom: opportunity and watch item

Credit growth of 33% — with mining at 75.9% and transport and communication at 77.2% — widens financing options for borrowers, but it also concentrates credit in a few sectors and raises asset-quality questions. BoT expects the less accommodative stance to moderate credit expansion gradually.

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A4 — Fiscal Operations & DebtRevenue Is Beating Targets; Debt Is Rising Faster Than the Headline Suggests

In June 2026 total government revenue reached TZS 4,658.2 billion, 5.4% above target; the central government collected TZS 4,512.1 billion (96.9%). Tax revenue of TZS 3,733.2 billion was 12.5% above target, supported by tax-administration improvements, while non-tax revenue of TZS 778.9 billion fell short of a TZS 953.8 billion target. Spending of TZS 4,720.1 billion was below the TZS 4,979.8 billion estimate, split between TZS 2,797.9 billion recurrent and TZS 1,922.2 billion development.

June 2026 Revenue and Grants: Actual vs Estimate

TZS billion (2025 actual, 2026 estimate, 2026 actual)

June 2026 Expenditure: Actual vs Estimate

TZS billion

June 2026 outturn versus estimate, and financial-year totals

TZS billion	Jun-26 estimate	Jun-26 actual	Variance	FY2025/26 budget	FY actual (Jul-25 to Jun-26)
Total revenue (incl. LGAs)	4,419.7	4,658.2	+5.4%	40,466.1	41,930.4
Tax revenue	3,319.8	3,733.2	+12.5%	32,176.0	34,579.2
— Taxes on imports	995.6	1,213.3	+21.9%	11,563.0	12,559.2
— Sales/VAT & excise (local)	684.6	587.5	−14.2%	7,016.5	6,492.3
— Income taxes	1,436.4	1,702.9	+18.6%	11,367.9	13,220.6
Non-tax revenue	953.8	778.9	−18.3%	4,681.7	5,744.5
Total expenditure	4,979.8	4,720.0	−5.2%	48,775.0	48,451.0
— Wages & salaries	1,119.8	1,163.1	+3.9%	10,917.5	13,279.3
— Interest payments	644.0	597.4	−7.2%	6,493.7	5,605.3
— Development expenditure	2,014.4	1,922.1	−4.6%	17,493.7	17,057.2
Overall balance	−371.3	−362.6	—	−7,239.0	−6,147.7

Source: BoT MER Sept 2026, Table A2 (Mainland, cheques issued; 2026 actuals provisional). Variances computed by TICGL/TERI. Interest payments in the financial year were TZS 5,605.3 billion — about 13.4% of total revenue (computed).

National debt: size, currency and creditor

The national debt stock rose 1.7% month on month to USD 52,224.4 million at end-August 2026 (about 6.4% above August 2025, computed). External debt — USD 36,731.5 million, 70.3% of the total — is 83.7% public and rose 0.8% in the month. Multilateral lenders hold 59.5% of external debt and commercial lenders 34.4%. The US dollar is 64.9% of disbursed external debt, the euro 18.4%, the Chinese yuan 6.7%. External disbursements were USD 160.1 million in August, mainly to the central government, while external debt service was USD 139.1 million (USD 69.2 million principal). External-debt arrears have climbed to USD 1,040.0 million from USD 578.9 million a year earlier.

Domestic debt rose 3.6% in the month to TZS 40,899.5 billion on Treasury-bond issuance: the Government raised TZS 632.5 billion in August (TZS 178.1 billion bills; TZS 454.4 billion bonds) against domestic debt service of TZS 633.4 billion (TZS 163.5 billion principal; TZS 469.9 billion interest). Commercial banks hold 28.4% and pension funds 27.6% of the stock.

Government Domestic Debt Stock

TZS billion, end-August each year (2026: end-August provisional)

External Debt by Creditor, Aug-26

Share of USD 36,731.5 million

External Debt by Currency, Aug-26

Share of disbursed outstanding debt, percent

External Debt by Use of Funds, Aug-26

Share of disbursed outstanding debt, percent

Why the debt composition matters

Rising arrears, a deficit financed by domestic bonds and a 64.9% dollar share of external debt expose the budget to exchange-rate and refinancing risk, and banks and pension funds hold roughly 56% of domestic debt between them, which bears on how much room is left for private borrowers.

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A5 — External Sector & Exchange RateExports Are Strong, but Imports Are Stronger: The Current-Account Deficit Is Widening

The external sector remained sustainable, but higher costs of petroleum products and intermediate inputs pushed import growth above export growth. In the year to August 2026 exports of goods and services rose 16.4% to USD 20,216.2 million, while imports rose 21.4% to USD 21,269.2 million, leaving the current-account deficit at USD 2,481.8 million (USD 1,700.9 million a year earlier). Gross official reserves were USD 5,888.2 million — 4.2 months of projected imports (excluding FDI-related imports), above the national benchmark.

USD million (year ending August)	2025	2026p	Change
Goods exports	9,981.2	11,960.8	+19.8%
Goods imports (f.o.b.)	14,321.5	17,770.9	+24.1%
Goods account balance	−4,340.3	−5,810.2	+33.9% wider
Services receipts	7,389.8	8,255.4	+11.7%
Services payments	3,196.2	3,498.2	+9.4%
Services account balance	4,193.6	4,757.2	+13.4%
Goods & services balance	−146.6	−1,053.0	618% wider
Primary income balance	−2,026.5	−1,870.2	deficit −7.7%
Secondary income balance	472.2	441.4	−6.5%
Current-account balance	−1,700.9	−2,481.8	+45.9% wider

Source: BoT MER Sept 2026, Table 2.7.1.

Select Exports of Goods and Services

USD million, year ending August: 2025 vs 2026p

Select Imports of Goods and Services

USD million, year ending August: 2025 vs 2026p

Exports: gold leads, manufactured goods surge, traditional crops mixed

Gold exports rose 30.2% to USD 5,625.0 million (47.0% of goods exports, computed) on higher prices and volumes and contributed nearly two-thirds of the increase in goods exports. Manufactured goods exports rose 44.3% to USD 2,213.4 million on iron and steel (USD 141.5 million) and glassware (USD 142.0 million). Traditional exports rose 12.8% to USD 1,594.3 million, with tobacco (USD 570.2 million), tea (USD 99.4 million) and cloves (USD 161.0 million) up, but cashew nuts down to USD 369.2 million from USD 527.6 million and coffee at USD 269.3 million. Cereals fell to USD 189.8 million from USD 355.5 million (maize and rice both lower), and oil seeds to USD 209.2 million from USD 282.6 million.

Services receipts rose 11.7% to USD 8,255.4 million — transport USD 3,303.3 million (+26.4%, transit-trade freight) and travel USD 4,389.7 million (+1.7%).

Services Receipts by Category

USD million, year ending August

Imports: capital goods, intermediate goods and petroleum

Capital-goods imports rose 35.3% to USD 4,099.7 million (machinery USD 1,487.5 million, +33.1%; electrical machinery USD 764.8 million, +88.4%; industrial transport equipment USD 1,359.4 million). Intermediate imports rose 21.6% to USD 11,912.4 million, led by petroleum products (+51.7% to USD 3,425.6 million — about 34% of the increase in the goods import bill, computed) and industrial supplies (+11.7% to USD 5,718.2 million). Consumer-goods imports rose 17.7% to USD 1,757.4 million. Freight payments rose 29.5% to USD 1,683.4 million as shipping costs climbed.

What this means for technical design and capex budgets

A 35% rise in capital-goods imports and a 29.5% rise in freight payments are signals that imported equipment and logistics cost more in dollars and in shillings. TICGL's technical and operational workstream therefore prices imported plant, spare parts and freight in USD with explicit contingency, tests local-sourcing alternatives, and links capex timing to the exchange-rate scenario rather than to a fixed rate.

The shilling and the Interbank Foreign Exchange Market

The shilling averaged TZS 2,657.01 per USD in August 2026 against TZS 2,653.52 in July, a 6.7% annual depreciation (versus a 0.5% appreciation in the preceding month's annual comparison); BoT notes the swing largely reflects a base effect, as the shilling had appreciated sharply in August 2025 to TZS 2,490.16. IFEM turnover was USD 190.3 million (USD 227.1 million in July), buoyed by gold and traditional commodity inflows and tourism, and the Bank sold a net USD 45.4 million to smooth volatility. On BoT's end-period series, the rate moved from TZS 2,463.3 (Aug-25) to TZS 2,639.9 (Aug-26): 7.2% depreciation (computed).

TZS per USD, End of Period

Aug-25 to Aug-26 (BoT Table A10)

Current-Account Balance, 2018–2025 and Year to Aug-26

USD million (calendar years; last bar is year ending August 2026)

Gross Official Reserves, 2018–2025 and Aug-26

USD million (BoT Table A1; Aug-26 per Section 2.7)

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A6 — ZanzibarZanzibar: Higher Inflation, a Growing Current-Account Surplus and Tourism-Led Receipts

Zanzibar's headline inflation eased to 5.6% in August 2026 from 6.0% in July, but remained above the 3.9% of August 2025, driven by food (Mbeya rice, sugar, fish and cooking bananas) and fuel-linked transport costs. Food inflation was 9.8% (11.1% in July; 4.2% a year earlier) and non-food 2.2%. Month on month, consumer prices fell 0.2%.

Zanzibar Annual Inflation

Percent: Aug-25, Jul-26, Aug-26 (BoT Table 3.1.1)

Zanzibar Government Resources, August 2026

TZS billion: 2025 actual, 2026 estimate, 2026 actual

Zanzibar indicator	Aug-25 / 2025	Aug-26 / 2026p	Note
Government resources (revenue & grants), Aug	—	TZS 251.3bn	10.4% above target; boosted by World Bank budget support
Domestic revenue, Aug	—	TZS 198.0bn	92.7% of target; tax TZS 174.5bn (88.7% of target); non-tax TZS 23.6bn (+38.2% vs target)
Government expenditure, Aug	—	TZS 459.0bn	73.3% for development projects
Current-account balance (12 mo.)	USD 799.3M	USD 953.7M	+19.3%; higher service receipts
Exports of goods & services (12 mo.)	USD 1,554.2M	USD 1,847.0M	+18.8%; tourism-related receipts
Goods exports (12 mo.)	USD 32.5M	USD 69.2M	Clove exports USD 42.5M (USD 3.6M a year earlier)
Imports of goods & services (12 mo.)	USD 648.0M	USD 909.5M	+40.4%; capital and intermediate goods
Services receipts (12 mo.)	USD 1,521.6M	USD 1,777.8M	+16.8%

Source: BoT MER Sept 2026, Sections 3.1–3.3; Tables 3.1.1, 3.3.1–3.3.3. Zanzibar's services account (net USD 1,707.2 million) far exceeds its goods deficit (USD 769.8 million), which gives Zanzibar a very different external profile from the Mainland.

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A7 — Global BackdropThe External Shock Behind the Domestic Numbers

Global growth is projected at 3.0% in 2026 (IMF WEO Update, July 2026), supported by resilient domestic demand and AI-related investment, but disruptions to shipping through the Strait of Hormuz have raised energy and fertiliser prices. In August 2026 crude oil averaged USD 84.4 per barrel (+5.8%; about 36% above the Q4 2025 pre-conflict average), European natural gas USD 21.11/mmbtu (+16.9%), and gold USD 4,411 per troy ounce (up from USD 4,073). Wheat (+6.5%), sugar (+11.8%) and palm oil (+1.5%) rose; Robusta (−2.2%) and urea (−2.5%) fell, while DAP rose 1.6%. US headline inflation held at 3.4%, euro-area inflation rose to 3.2% (energy inflation 14.3%), China's rose to 0.8% and India's to 4.8%. BoT flags prolonged Middle East conflict and a strengthening El Niño (late 2026 to early 2027) as the key downside risks.

Crude Oil (Average), Aug-25 to Aug-26

USD per barrel (World Bank Pink Sheet, BoT Table A8)

Gold and Urea Price Path

Gold USD per troy oz (left values) and urea USD per tonne

Commodity	Unit	Jun-26	Jul-26	Aug-26	m/m change
Crude oil, average	USD/barrel	81.7	79.8	84.4	+5.8%
Gold	USD/troy oz	4,228	4,073	4,411	+8.3%
Natural gas, Europe	USD/mmbtu	15.17	18.06	21.11	+16.9%
Wheat, US HRW	USD/tonne	286.0	310.0	330.0	+6.5%
Sugar, world	USD/kg	0.32	0.34	0.38	+11.8%
Coffee, Arabica	USD/kg	6.79	7.91	7.97	+0.8%
Coffee, Robusta	USD/kg	3.73	4.07	3.98	−2.2%
Palm oil	USD/tonne	1,104.0	1,101.0	1,117.0	+1.5%
DAP (fertiliser)	USD/tonne	783.8	781.3	793.5	+1.6%
Urea (fertiliser)	USD/tonne	453.1	400.0	390.0	−2.5%

Source: BoT MER Sept 2026, Table 1.1 and Table A8 (World Bank Pink Sheet).

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B1 — Risk WatchlistWhat Could Change These Numbers in the Next Quarter

The BoT's own outlook points to four risks that would change the numbers above.

1Prolonged Middle East conflict

Oil at USD 84.4 is 36% above its pre-conflict level; European gas +16.9% in a month.
A renewed rise would feed straight into transport inflation (already 13.8%) and the import bill.

2El Niño strengthening into 2027

Above-normal Vuli rainfall could disrupt transport and food distribution; drought in southern SADC may raise regional food demand.
Agriculture, transport and food prices are the channels to watch.

3Wider external deficit and shilling pressure

Current-account deficit up 45.9%; reserves at 4.2 months of imports; shilling −6.7% y/y.
Further depreciation would raise the shilling cost of dollar debt and imports.

4Credit boom and rate path

Private credit +33%; CBR raised to 6.25%; BoT expects gradual moderation.
A higher-for-longer rate path would raise borrowing costs for firms and government.

Positive offsets in the data

Inflation remains within target; revenue is above target (+5.4% in June; tax +12.5%); the 12-month goods-and-services export base grew 16.4%; reserves remain above benchmark; government securities are oversubscribed (bond bid-to-cover 3.4); and Zanzibar runs a growing current-account surplus. The balance of the data is "strong nominal momentum with a costlier external bill" .

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06 — SourcesMethod & Source Note

Basis

Macro data: Bank of Tanzania, Monthly Economic Review, September 2026 (August 2026 data) — Sections 1.0–3.3 and Statistical Tables A1–A10, citing the National Bureau of Statistics, Ministry of Finance, Tanzania Revenue Authority, Ministry of Finance and Planning (Zanzibar), Office of the Chief Government Statistician, National Food Reserve Agency, the World Bank Pink Sheet and IMF WEO (July 2026). Recent figures are provisional and subject to revision; derived ratios (real rates, shares, percentage changes) are TICGL/TERI computations from the cited tables.

Bank of Tanzania — Monthly Economic Review, September 2026
TERI — Tanzania Economic Research Institute

B2 — Quick AnswersFrequently Asked Questions

What was Tanzania's inflation rate in August 2026?

Headline inflation was 4.3%, up from 3.4% a year earlier and inside the 3–5% target band. Core inflation was 4.1%, food 3.7% and energy 8.5%; core now contributes 3.1 of the 4.3 percentage points.

What is the Central Bank Rate and why was it raised?

The CBR is 6.25%, raised in July 2026 to contain second-round effects of higher energy, fertiliser and transport costs linked to the Middle East conflict.

Which sectors are seeing the fastest credit growth?

Transport and communication (77.2%), mining and quarrying (75.9%), trade (47.1%), building and construction (41.8%) and agriculture (38.4%); total private-sector credit grew 33.0%, and manufacturing credit grew 12.9%.

How has the shilling moved?

The shilling averaged TZS 2,657.01 per US dollar in August 2026, 6.7% weaker than a year earlier.

How large is the current-account deficit?

USD 2,481.8 million in the year to August 2026, against USD 1,700.9 million a year earlier. Exports of goods and services rose 16.4% to USD 20,216.2 million, while imports rose 21.4%; petroleum imports were up 51.7%.

How large is Tanzania's public debt?

National debt stood at USD 52,224.4 million, with domestic debt of TZS 40,899.5 billion and external-debt arrears of USD 1,040.0 million; the dollar share of external debt is 64.9%.

Muhtasari

Muhtasari kwa Kiswahili

Taarifa za Uchumi wa Tanzania, Septemba 2026 — Data za Benki Kuu ya Tanzania (Agosti 2026) — Mfumuko wa bei wa jumla ulifikia asilimia 4.3 Agosti 2026 (asilimia 3.4 Agosti 2025), Kiwango cha Benki Kuu (CBR) ni asilimia 6.25 baada ya kuongezwa Julai, mikopo kwa sekta binafsi inakua kwa asilimia 33.0, na shilingi imeshuka thamani kwa asilimia 6.7 mwaka hadi mwaka (wastani TZS 2,657.01 kwa dola). Upungufu wa akaunti ya sasa umeongezeka hadi USD milioni 2,481.8.

Mfumuko wa bei: Mfumuko wa bei wa msingi (core) ni asilimia 4.1 na unachangia pointi 3.1 kati ya 4.3 za mfumuko wa jumla (Agosti 2025: 1.5 kati ya 3.4). Mfumuko wa chakula umeshuka hadi asilimia 3.7, lakini nishati ni asilimia 8.5, huduma asilimia 5.9 na usafirishaji asilimia 13.8.

Gharama ya fedha: Riba ya jumla ya mikopo ni asilimia 15.05, riba ya mikopo ya majadiliano ni asilimia 11.93, na mavuno ya hatifungani ya miaka 25 ni asilimia 11.48. Kwa mfumuko wa asilimia 4.3, riba halisi ya mikopo ni takriban asilimia 10.3 (hesabu za TICGL/TERI).

Sarafu na biashara ya nje: Mauzo ya bidhaa na huduma nje yalikua asilimia 16.4 hadi USD milioni 20,216.2 (dhahabu USD milioni 5,625.0, ongezeko la asilimia 30.2), lakini uagizaji ulikua kwa kasi zaidi (asilimia 21.4), huku bidhaa za mafuta zikipanda asilimia 51.7. Akiba ya fedha za kigeni ni USD milioni 5,888.2, sawa na miezi 4.2 ya uagizaji.

Bajeti na deni: Mapato ya serikali Juni 2026 yalikuwa TZS bilioni 4,658.2 (asilimia 5.4 juu ya lengo); deni la taifa ni USD milioni 52,224.4; deni la ndani TZS bilioni 40,899.5; malimbikizo ya deni la nje yamefikia USD milioni 1,040.0.

Zanzibar: Mfumuko wa bei ni asilimia 5.6 (Julai: 6.0), na ziada ya akaunti ya sasa ni USD milioni 953.7, ikichangiwa na mapato ya utalii.

Hitimisho: Uchumi una kasi imara ya kawaida (nominal), lakini gharama ya uagizaji kutoka nje na gharama ya fedha vinapanda; viashiria vya kufuatilia ni mfumuko wa bei wa msingi, kiwango cha riba, thamani ya shilingi na upungufu wa akaunti ya sasa.

Mfumuko wa bei: 4.3% (core 4.1%, chakula 3.7%, nishati 8.5%)
CBR 6.25%; riba ya mikopo 15.05%; mikopo ya sekta binafsi +33.0%
TZS 2,657.01 kwa USD (−6.7% mwaka hadi mwaka)
Upungufu wa akaunti ya sasa: USD milioni 2,481.8

Chanzo: TICGL/TERI, ikisoma Benki Kuu ya Tanzania, Monthly Economic Review, Septemba 2026. Kwa maelezo zaidi wasiliana na: economist@ticgl.com, WhatsApp +255 734 862 343.

Disclaimer & scope

Prepared by TERI for research and strategic-information purposes only. It is not investment, legal, tax or financial advice and does not state the position of the Bank of Tanzania, the Ministry of Finance or the Government. Where TICGL/TERI computes or converts a figure it is marked "TICGL calc." Debt-to-GDP ratios are not shown because the review does not publish current-year GDP in shillings.

00 — OverviewExecutive Summary

Tanzania's debt stock rose 1.7% in August alone, driven by Treasury bond issuance at home and fresh external disbursements. The headline looks heavy, but its composition and the currency effect matter more than the total.

Total debt

137.87 tn

Aug-25: 120.91 tn

At constant exchange rate

+8.7%

vs +14.0% in shillings

External arrears

2.75 tn

Aug-25: 1.43 tn

Foreign-currency share

100%

of external stock (64.9% in US dollars)

Central finding

Of the TZS 16.96 trillion added to the debt stock in twelve months, about TZS 6.0 trillion is the weaker shilling revaluing external debt, TZS 7.4 trillion is new net external borrowing and TZS 3.6 trillion is growth in domestic debt (TICGL calc.). The risk is therefore less the absolute size than the 70% external share, a stock that rises automatically whenever the shilling falls, and an interest bill already equal to 13.4% of revenue.

External: TZS 96.97 tn, of which multilateral lenders TZS 57.73 tn (59.5%) and commercial lenders TZS 33.35 tn (34.4%).
Domestic: TZS 40.90 tn, 85.1% in Treasury bonds, held mainly by commercial banks, pension funds and the Bank of Tanzania.
Cost: interest payments of TZS 5.61 tn in FY2025/26 (domestic 3.69 tn, foreign 1.91 tn); in August total debt service was about TZS 1.00 tn.
Buffers: gross official reserves of about TZS 15.54 tn cover roughly 16% of the external stock (TICGL calc.).

01 — The StockDebt Stock and Twelve-Month Trend

The Bank reports national debt rising 1.7% month on month. In shilling terms the stock has climbed from TZS 120.91 tn in August 2025 to TZS 137.87 tn, with external debt growing faster than domestic.

National Debt Stock: External and Domestic

TZS trillions, end of month, Aug-25 to Aug-26 (TICGL calc. from Table A10)

TZS trillions	Aug-25	Jul-26	Aug-26	y/y
External debt	83.60	96.59	96.97	+16.0%
Domestic debt	37.31	39.47	40.90	+9.6%
Total national debt	120.91	136.06	137.87	+14.0%

Source: Bank of Tanzania, Tables 2.6.5 and A10; external and total converted at end-period exchange rates by TICGL/TERI. At end-period TZS values the monthly rise is 1.3% because the shilling firmed 0.4% in August; the Bank reports 1.7% on its own basis.

Growth: Shilling Terms vs Constant Exchange Rate

Year-on-year, percent (TICGL calc.)

External Debt, Long-Run

TZS trillions, end-year 2018–2025 and Aug-26 (TICGL calc., Table A1)

Domestic Debt, Long-Run

TZS trillions, end-August each year (Chart 2.6.1)

How much is the shilling, how much is borrowing?

External debt rose 16.0% in shilling terms against only 8.2% at a constant exchange rate; total debt rose 14.0% against 8.7%. The shilling averaged 6.7% weaker than a year earlier (end-period about 7.2% weaker). That is why a number like TZS 137.87 tn can overstate the pace of new borrowing (about TZS 6.0 tn of the rise is revaluation), and also why a further depreciation would add to the stock with no new loan being signed.

02 — ExternalExternal Debt: Who Lends, to Whom, and in What Currency

The external stock stands at TZS 96.97 tn, up 0.8% in the month in original-currency terms. Public debt is 83.7% of it. August disbursements were about TZS 0.42 tn, mostly to central government, against debt service of about TZS 0.37 tn.

External Debt by Creditor

TZS trillions, end-Aug 2026 (TICGL calc.)

Disbursed Debt by Currency

TZS trillions equivalent (share × TZS 96.15 tn, TICGL calc.)

Creditor	TZS tn	Share Aug-25	Share Aug-26
Multilateral	57.73	59.0%	59.5%
Commercial	33.35	34.5%	34.4%
Bilateral	4.14	4.6%	4.3%
Export credit	1.75	2.0%	1.8%
External debt stock	96.97	100%	100%

By borrower	TZS tn	Share	Note
Central government	81.18	83.7%	Includes interest arrears of 0.21 tn
Private sector	15.79	16.3%	Private non-guaranteed borrowing
Public corporations	0.00	0.0%	TANESCO, ATCL, TRC, TPA, TFC, DAWASA: none outstanding

What the Money Was Used For

Disbursed outstanding debt by use of funds, TZS trillions equivalent (share × TZS 96.15 tn, TICGL calc.)

Balance-of-payments and budget support (TZS 22.7 tn) and transport and telecommunications (TZS 21.0 tn) are the largest uses, followed by social welfare and education (TZS 18.6 tn) and energy and mining (TZS 12.1 tn). Agriculture, the sector employing most Tanzanians, accounts for only TZS 5.0 tn (5.2%).

2.1 Arrears are rising

External Debt Arrears

TZS trillions, end of month (TICGL calc., Table A10)

Watch item

Arrears reached about TZS 2.75 tn (principal TZS 1.93 tn, interest TZS 0.82 tn), nearly double the TZS 1.43 tn of August 2025 and up from TZS 1.73 tn in January. Commercial creditors account for about 56% (TZS 1.54 tn). Arrears are small next to the stock (2.8%) but they signal liquidity strain and raise the cost of future commercial borrowing.

03 — DomesticDomestic Debt: A Bond-Driven, Locally Held Stock

Domestic debt rose 3.6% in August to TZS 40.90 tn, mostly through Treasury bond issuance. The Government raised TZS 0.63 tn from the market in the month, of which TZS 0.18 tn in Treasury bills and TZS 0.45 tn in Treasury bonds, while domestic debt service was TZS 0.63 tn (principal 0.16 tn, interest 0.47 tn).

Instrument (TZS tn)	Aug-25	Jul-26	Aug-26	Share Aug-26
Government bonds	29.84	33.62	34.79	85.1%
Treasury bills	2.08	1.78	1.79	4.4%
Government stocks	0.14	0.14	0.14	0.3%
Overdraft (non-securitised)	5.24	3.94	4.18	10.2%
Domestic debt stock	37.31	39.47	40.90	100%

Source: Bank of Tanzania, Table 2.6.5 (converted from TZS billions). Tax certificates are negligible. Totals exclude liquidity papers.

Domestic Debt by Instrument

TZS trillions

Who Holds Domestic Debt

TZS trillions (Table 2.6.6)

Holder (TZS tn)	Aug-25	Jul-26	Aug-26	Share
Commercial banks	10.56	11.45	11.60	28.4%
Pension funds	10.12	10.49	11.29	27.6%
Bank of Tanzania	7.05	6.82	7.05	17.2%
Insurance	2.00	2.06	2.05	5.0%
BoT special funds	0.80	0.85	0.87	2.1%
Others (public institutions, companies, individuals, non-residents)	6.78	7.79	8.03	19.6%

Monthly Issuance for Financing

TZS trillions, Aug-25 to Aug-26 (Chart 2.6.2)

Government Securities Yields

Percent per annum (Table A4)

3.1 Strong demand, falling yields

Oversubscribed auctions. Two Treasury bill auctions offered TZS 0.58 tn and drew bids of TZS 0.98 tn (cover 1.7), with TZS 0.52 tn accepted. The 15- and 25-year bond auctions offered TZS 0.62 tn, drew TZS 2.14 tn (cover 3.4) and accepted TZS 0.60 tn.
Long yields lower than a year ago. The 25-year yield fell to 11.48% from 14.42% in August 2025; the 10-year is 10.87% against 13.74%.
Concentration. Banks and pension funds hold 56% of domestic debt, and banks' holdings of securities rose to TZS 11.72 tn (up 40.3% on a year earlier), which links public borrowing to private credit conditions.

04 — The CostDebt Service and the Budget

Debt service is where the stock meets the budget. In the fiscal year July 2025 to June 2026, revenue (including LGAs) was TZS 41.93 tn, ahead of the TZS 40.47 tn estimate, while total spending was TZS 48.45 tn and the overall deficit TZS 6.15 tn.

Interest payments

5.61 tn

Budget: 6.49 tn

Interest / revenue

13.4%

June month: 12.8%

Domestic interest

3.69 tn

Foreign: 1.91 tn

Overall deficit

6.15 tn

Budget: 7.24 tn

Interest Payments: Budget vs Actual

TZS trillions, FY2025/26 (Table A2)

Where the Money Went

TZS trillions, FY2025/26 actual

How the Deficit Was Financed

TZS trillions, FY2025/26 actual (Table A2)

TZS trillions, FY2025/26	Budget	Actual	Reading
Total revenue (incl. LGAs)	40.47	41.93	Above target
Total expenditure	48.77	48.45	Slightly below
Interest payments	6.49	5.61	Foreign interest under-ran by 0.88 tn
Development expenditure	17.49	17.06	35% of spending
Overall balance	-7.24	-6.15	Narrower than planned
Foreign loans received	5.97	6.06	o/w non-concessional 1.89 tn
Domestic financing (net)	2.95	3.44	Borrowing/roll-over 3.29 tn

Source: Bank of Tanzania Table A2 (Ministry of Finance), converted from TZS millions. Budget column is the 2025/26 approved budget.

TICGL/TERI reading

The Government delivered a smaller deficit than budgeted, helped by strong tax collection (tax revenue TZS 34.58 tn). Interest below budget may partly reflect payment timing, so the saving should not be assumed to be permanent. At 13.4% of revenue, interest is the third-largest recurrent claim after wages (TZS 13.28 tn) and other goods, services and transfers (TZS 12.51 tn).

05 — RisksCurrency Sensitivity, Risks and Recommendations

Because the whole external stock is owed in foreign currency, each percentage point of shilling depreciation adds about TZS 0.97 tn to the debt, before any new borrowing.

External Debt at Different Exchange Rates

TZS trillions, holding the foreign-currency stock constant (TICGL calc.; August 2026 end-period rate TZS 2,639.9 per USD)

Exchange rate (TZS per USD)	External debt (TZS tn)	Change vs today	Total debt (TZS tn)
2,500	91.83	-5.14	132.73
2,639.9 (end-Aug 2026)	96.97	0.00	137.87
2,750	101.01	+4.04	141.91
2,850	104.68	+7.71	145.58
3,000	110.19	+13.22	151.09

Illustrative sensitivity, not a forecast. Domestic debt held at TZS 40.90 tn.

Risk	Why it matters	Evidence
Currency valuation	Stock rises as shilling weakens	14.0% growth vs 8.7% at constant external rate
Commercial exposure	Higher cost, shorter maturities	TZS 33.35 tn, 34.4% of external debt
Arrears build-up	Liquidity strain, higher future risk premium	TZS 2.75 tn vs 1.43 tn a year ago
Domestic crowding-in of banks	Competes with private credit	Banks hold TZS 11.72 tn securities (+40.3%)
Interest burden	Squeezes development spending	13.4% of revenue
Thin reserve cover	Limited buffer against a sudden stop	Reserves ≈16% of external stock

Recommendations

For policy makers

Prioritise concessional and multilateral financing; cap non-concessional borrowing relative to revenue.
Clear external arrears, especially commercial, before they reprice future borrowing.
Lengthen the domestic yield curve and widen the investor base beyond banks and pension funds.
Publish debt-to-GDP, currency mix and a medium-term debt-service profile with each quarterly review.

For businesses and investors

Model public-sector counterparties, PPP availability payments and tariffs under higher debt-service scenarios.
Expect continued heavy bond supply: consider long-term bonds and pension-fund co-investment for project funding.
Match revenue and debt currency; stress-test for TZS 2,850 to 3,000 per USD.
Track arrears and commercial loan terms when assessing sovereign-linked projects.

"A debt stock that is 70% external and fully in foreign currency is a shilling bet. The question is not only how much Tanzania owes, but how much of the stock moves with the exchange rate rather than with decisions in Dodoma."

— TICGL / Tanzania Economic Research Institute (TERI)

06 — What TICGL DoesFrom Debt Data to Bankable Projects

Public-debt capacity decides which projects are financed by government, which move to PPP, and what investors can expect in payment risk. TICGL (Tanzania Investment and Consultant Group Ltd), with its research arm TERI, combines original economic research with practical advisory outputs across Tanzania and East Africa. Three technical service lines connect directly to the issues in this report.

Feasibility Studies

Pre-feasibility and full feasibility studies for PPP and private projects.
Financial models with FX and inflation escalation, NPV, IRR, DSCR and affordability tests against public-sector budgets.
Value-for-money and risk-allocation analysis to support PPP over debt-financed procurement.
Sensitivity analysis on interest rates, exchange rates and payment delays.

Market Entry Advisory

Sector and location screening with sovereign and counterparty risk assessment.
Entry-mode choice, incentives mapping and regulatory pathway.
Currency and financing structure advice, including local-currency funding options.
Partner, lender and supplier identification.

Market Research

Macro, fiscal and sector outlooks built on Bank of Tanzania, NBS and Ministry data.
Demand sizing, consumer and stakeholder surveys, willingness-to-pay studies.
Policy briefs, training materials and SEO-ready research publications.
Capital-market and public-finance analysis for institutional clients.

Why this matters to clients

With interest at 13.4% of revenue and arrears rising, projects that depend on government payments need an explicit affordability and payment-risk layer. A refresh of the fiscal and currency assumptions in a feasibility model, PPP proposal or market-entry case is a low-cost way to avoid mispriced risk.

Talk to TICGL/TERI

Request a feasibility, market-entry or market-research scoping call, or a fuller briefing on this report.

What We Do → TICGL Markets → TERI Research → ✉️ economist@ticgl.com

07 — SourcesMethod & Source Note

Basis

Source: Bank of Tanzania, Monthly Economic Review, September 2026: Section 2.6 (Debt Developments), Section 2.7, Tables 2.6.1–2.6.6, and Statistical Tables A1, A2, A4 and A10, which cite the Ministry of Finance, Bank of Tanzania and Tanzania Revenue Authority. The review publishes external debt in US dollars; TICGL/TERI converts it to TZS trillions using end-of-period exchange rates from Table A10 (TZS 2,639.9 at end-August 2026; monthly series use each month's own rate; year-end A1 rates for 2018–2025). Currency-share and use-of-funds splits apply the published percentage shares to disbursed outstanding debt of TZS 96.15 tn. "Constant exchange rate" growth uses the original-currency series. Domestic debt excludes liquidity papers. August 2026 data are provisional. Scenario and sensitivity figures are illustrations, not forecasts.

08 — Quick AnswersFrequently Asked Questions

How large is Tanzania's national debt?

About TZS 137.9 trillion at end-August 2026: TZS 97.0 trillion external (70.3%) and TZS 40.9 trillion domestic (29.7%).

How much of the rise in debt is due to the weaker shilling?

Debt rose about 14.0% in shilling terms over the year but about 8.7% with external debt at a constant exchange rate; about TZS 6.0 trillion of the TZS 17.0 trillion rise is currency valuation.

Who does Tanzania owe?

Externally, multilateral lenders (59.5%), commercial lenders (34.4%), bilateral creditors (4.3%) and export credit (1.8%). Domestically, banks (28.4%), pension funds (27.6%) and the Bank of Tanzania (17.2%) are the largest holders.

What does Tanzania pay in interest?

TZS 5.61 trillion in FY2025/26 (domestic TZS 3.69 trillion, foreign TZS 1.91 trillion), about 13.4% of revenue.

Are external arrears a concern?

Arrears reached about TZS 2.75 trillion, nearly double a year earlier, though only 2.8% of the external stock. The trend deserves monitoring, particularly commercial arrears.

Muhtasari

Muhtasari kwa Kiswahili

Muhtasari wa Deni la Taifa la Tanzania. Kufikia mwisho wa Agosti 2026, deni la taifa lilikuwa takriban TZS trilioni 137.9: deni la nje TZS trilioni 97.0 (asilimia 70.3) na deni la ndani TZS trilioni 40.9 (asilimia 29.7). Deni liliongezeka kwa asilimia 1.7 ndani ya mwezi mmoja, kwa mujibu wa Benki Kuu ya Tanzania.

Ongezeko la mwaka: Deni limekua kwa asilimia 14.0 kwa shilingi, lakini ni asilimia 8.7 tu deni la nje likikadiriwa kwa kiwango cha ubadilishaji kisichobadilika. Maana yake, takriban TZS trilioni 6.0 za ongezeko la trilioni 17.0 zinatokana na kushuka kwa thamani ya shilingi, kwa sababu deni la nje ni la fedha za kigeni.

Deni la nje: Taasisi za kimataifa (multilateral) zinadai asilimia 59.5 (TZS trilioni 57.7), wakopeshaji wa kibiashara asilimia 34.4 (TZS trilioni 33.4). Asilimia 64.9 ya deni ni kwa dola ya Marekani. Malimbikizo ya deni la nje yamefikia TZS trilioni 2.75 kutoka trilioni 1.43 mwaka jana.

Deni la ndani: Asilimia 85.1 ni hati fungani (bonds). Wamiliki wakuu ni benki za biashara (28.4%), mifuko ya pensheni (27.6%) na Benki Kuu (17.2%). Minada imejaa maombi na riba za muda mrefu zimeshuka: hati fungani ya miaka 25 ni asilimia 11.48.

Gharama: Malipo ya riba mwaka wa fedha 2025/26 yalikuwa TZS trilioni 5.61 (ndani 3.69, nje 1.91), sawa na asilimia 13.4 ya mapato ya TZS trilioni 41.93. Upungufu wa jumla wa bajeti ulikuwa TZS trilioni 6.15.

Hatari na ushauri: Kila asilimia 1 ya kushuka kwa shilingi huongeza deni la nje kwa takriban TZS trilioni 0.97. Sera zilenge mikopo nafuu, kulipa malimbikizo na kupanua wawekezaji wa hati fungani. TICGL/TERI hutoa upembuzi yakinifu (feasibility), ushauri wa kuingia sokoni na utafiti wa soko.

Hitimisho: Deni linahimilika, lakini thamani ya shilingi na gharama za riba ndizo zitakazoamua uhimilivu wake. Kinachohitajika ni usimamizi makini wa mchanganyiko wa sarafu na malimbikizo.

Deni la taifa: TZS trilioni 137.87 · Nje: 96.97 · Ndani: 40.90
Ongezeko la mwaka: 14.0% (8.7% bila athari ya sarafu ya deni la nje)
Riba FY2025/26: TZS trilioni 5.61 (13.4% ya mapato)
Malimbikizo ya deni la nje: TZS trilioni 2.75

Chanzo: Benki Kuu ya Tanzania, Mapitio ya Kila Mwezi ya Uchumi, Septemba 2026; mabadiliko kwenda TZS trilioni na TICGL/TERI. Kwa maelezo zaidi: economist@ticgl.com.

Disclaimer & scope

Prepared by TERI for research and strategic-information purposes only. It is not investment, legal, tax or financial advice and does not state the position of the Bank of Tanzania or the Government. All figures come from the Bank's September 2026 Monthly Economic Review; where TICGL/TERI derives a figure (for example percentage changes in end-period exchange rates) it is marked as such.

00 — OverviewExecutive Summary

The Bank of Tanzania describes the domestic economy as stable: inflation low and inside the 3–5% target, a liquid foreign exchange market and adequate reserves. Our reading agrees on the headline but adds three cautions.

Headline inflation

4.3%

Jul 4.2% · Aug-25 3.4%

Transport inflation

13.8%

Unchanged; fuel pass-through

Current account deficit

$2,481.8M

Year to Aug; was $1,700.9M

Gross reserves

$5,888.2M

4.2 months of imports

Central finding

The shilling is stable month to month (average +0.13%, and the end-of-month rate actually firmed 0.4% in August), so it is not what pushed inflation up this month. But inflation is no longer food-led: core inflation supplies 3.1 of the 4.3 percentage points. Combined with a wider current account deficit, a 51.7% jump in petroleum imports and a debt stock that is 64.9% USD-denominated, the shilling's stability is a condition to protect, not a given.

Prices: headline 4.3%, core 4.1%, services 5.9%, energy, fuel and utilities 8.5% (highest since October 2024), food 3.7%.
Shilling: TZS 2,657.01 per USD in August versus 2,653.52 in July; -6.7% year on year against +0.5% appreciation a month earlier, a swing the Bank attributes largely to the August 2025 base.
Policy: the Central Bank Rate was raised to 6.25% in July; the Bank sold a net USD 45.4 million in the interbank FX market to smooth volatility.
Liquidity: M3 growth 25.5% and private-sector credit growth 33.0% mean domestic demand is strong, which keeps pressure on prices and imports.

01 — PricesInflation: Contained, but Changing Character

Headline inflation rose to 4.3% in August 2026 from 4.2% in July and 3.4% a year earlier. The Bank attributes the uptick to lagged pass-through of earlier fuel price increases into bus, taxi and motorcycle-taxi fares. Month on month, prices rose 0.1%.

Twelve-Month Inflation by Measure

Percent, Aug-25 to Aug-26 (National Bureau of Statistics, Table A9)

Group (weight)	Aug-25	Jul-26	Aug-26	Reading
Headline (100%)	3.4	4.2	4.3	Within 3–5% target
Core (73.9%)	2.0	3.9	4.1	Rising steadily since March
Food & non-alcoholic bev. (28.2%)	7.7	4.1	3.7	Easing on staples supply
Energy, fuel & utilities (5.7%)	2.6	6.9	8.5	Charcoal and firewood
Transport (14.1%)	1.4	13.8	13.8	Flat at high level
Services (37.2%)	0.8	5.7	5.9	Broad-based build-up
Goods (62.8%)	4.9	3.3	3.5	Edging up
Housing, water, electricity (15.1%)	2.1	1.6	2.5	Up 0.9pp in a month
Restaurants & accommodation (6.6%)	0.9	2.7	3.0	Services pressure
Information & communication (5.4%)	0.4	0.6	1.5	+0.9% m/m in August

Source: Bank of Tanzania, Table 2.1.1 and Table A9(i)–(ii).

What Is Driving Inflation

Contribution to headline, percentage points

Transport Inflation

Twelve-month change, percent

1.1 From food-led to core-led inflation

In August 2025 unprocessed food contributed 1.8 percentage points of a 3.4% rate and core 1.5. A year later unprocessed food contributes 0.8 and core 3.1. That matters for policy: food prices follow harvests and reverse quickly, while core inflation is stickier and is the part monetary policy can influence. The Bank's tightening in July is a response to exactly this build-up.

1.2 Food looks safe, for now

Wholesale prices of maize, rice and beans are below year-earlier levels, though National Food Reserve Agency stocks were 484,332 tonnes at end-August, down from 537,571 tonnes a year earlier. The Bank flags a strengthening El Niño and above-normal Vuli rains as risks to transport, distribution and regional food demand.

Domestic fuel prices fell, yet energy inflation rose

Petrol and diesel prices in Dar es Salaam stayed well below June 2026 levels, but charcoal and firewood pushed energy, fuel and utilities inflation to 8.5%. Rising global refined-product prices (white products averaged USD 1,167.21 per tonne in August versus USD 628.27 in December 2025) are an upside risk to domestic energy prices.

02 — Exchange RateThe Shilling: Stable Month to Month, Weaker Over the Year

The Interbank Foreign Exchange Market remained liquid, supported by gold and traditional commodity exports and tourism. Transactions totalled USD 190.3 million in August, down from USD 227.1 million in July. The shilling averaged TZS 2,657.01 per USD, marginally weaker than July's 2,653.52.

Aug-26 average

2,657.01

TZS per USD

Jul-26 average

2,653.52

+0.13% m/m (TICGL calc.)

Annual change

-6.7%

Vs +0.5% in July

BoT net FX sales

$45.4M

To smooth volatility

Shilling End-of-Month Rate

TZS per USD, Aug-25 to Aug-26 (Table A10). Higher = weaker shilling

2.1 Why the annual figure overstates the move

The shilling appreciated sharply in August 2025 to an average of TZS 2,490.16 per USD, from 2,666.79 in July 2025. Measured against that unusually strong base, August 2026 shows a 6.7% depreciation. A year ago the same comparison showed an appreciation of 0.5%. The Bank itself calls the swing a base effect.

Exchange-rate measure	Value	Note
Average, Aug-26	TZS 2,657.01	Bank of Tanzania
Average, Jul-26	TZS 2,653.52	Bank of Tanzania
Average, Aug-25	TZS 2,490.16	Sharp appreciation month
Average, Jul-25	TZS 2,666.79	Base for July comparison
End-period, Aug-25	TZS 2,463.3	Table A10
End-period, Dec-25	TZS 2,447.5	Table A10
End-period, Jul-26	TZS 2,649.7	Table A10
End-period, Aug-26	TZS 2,639.9	-0.4% vs July (firmer)
End-period change, Dec-25 to Aug-26	+7.9%	TICGL computation

TICGL/TERI reading

Using end-period rates, the shilling lost roughly 7.9% between December 2025 and August 2026, most of it between January and July, and has flattened since. That is a gradual adjustment, not a disorderly one. Stability in the Bank's sense means no volatility spikes, which is what the net USD 45.4 million of sales aimed to secure.

03 — The LinkShilling vs Inflation: How Tight Is the Connection?

A weaker currency raises the local-currency price of imported fuel, fertiliser, capital goods and intermediate inputs. Tanzania imports about USD 17.8 billion of goods a year, of which petroleum products alone were USD 3,425.6 million (up 51.7%). So exchange-rate pass-through is real. The data show two parallel trends since early 2026.

Exchange Rate vs Headline and Core Inflation

End-of-month TZS per USD (left) and twelve-month inflation, percent (right)

Crude Oil Price (USD per barrel)

Monthly average, World Bank (Table A8)

Oil Price vs Transport Inflation

USD per barrel (left), percent (right)

3.1 What the evidence supports

Oil is the common cause. Crude jumped from USD 68.01 (February) to 95.58 (March) and 103.91 (April). Transport inflation followed from 4.0% in February to 9.2% in April and 13.8% by July, tracking the shock with a lag.
The shilling weakened over the same window. End-period TZS per USD moved from 2,542.5 in February to 2,649.7 in July (+4.2%), while headline rose from 3.2% to 4.2%.
But oil is easing and the rate has flattened. Crude averaged USD 84.4 in August (still about 36% above the Q4 2025 pre-conflict level) and the end-period rate firmed slightly.

A caution on causation

Monthly data over 13 months cannot separate exchange-rate pass-through from the oil shock, because both moved together and the shilling was already softening in January before oil spiked. TICGL/TERI therefore treats the shilling as an amplifier of imported inflation rather than its proven source. A formal pass-through estimate needs a longer series of import-price and exchange-rate data.

3.2 Why the pass-through risk is rising

Channel	Aug-25 (year to)	Aug-26 (year to)	Change
Goods imports (USD m)	14,321.5	17,770.9	+24.1%
Petroleum products imports (USD m)	2,257.4	3,425.6	+51.7%
Freight payments (USD m)	1,300.4	1,683.4	+29.5%
Fertiliser imports (USD m)	392.5	428.7	+9.2%
Capital goods imports (USD m)	3,030.2	4,099.7	+35.3%

Source: Bank of Tanzania, Tables 2.7.1, A7 and Chart 2.7.5; percentage changes for freight, fertiliser and capital goods are TICGL/TERI computations.

04 — PolicyMonetary Policy: A Deliberate Tightening

In July 2026 the Monetary Policy Committee raised the Central Bank Rate (CBR) to 6.25% to contain second-round inflation from higher energy, fertiliser and transport costs. Operations kept the 7-day interbank rate inside the 4.75–7.75% corridor, using full-allotment reverse repos and liquidity paper auctions.

CBR

6.25%

Corridor 4.75–7.75%

Real policy rate

≈1.95pp

CBR less headline (TICGL calc.)

Overall IBCM rate

6.67%

Jul 6.57%

T-bill weighted yield

4.86%

Jul 4.74%

Policy Rate, Interbank Rate and T-Bill Yield vs Inflation

Percent, Aug-25 to Aug-26 (Table A4 and A9)

Money and Credit Growth

Annual growth, percent (Table 2.2.1)

Credit Growth by Sector, Aug-26

Annual growth, percent (Table 2.2.2)

Indicator	Aug-25	Jul-26	Aug-26
Extended broad money, M3 (annual %)	20.5	26.9	25.5
Credit to private sector (annual %)	16.2	31.2	33.0
Reserve money, M0 (annual %)	22.5	20.6	27.4
Overall lending rate (%)	15.07	15.10	15.05
12-month deposit rate (%)	9.99	9.34	9.36
Short-term interest spread (pp)	—	6.20	5.95
25-year bond yield (%)	14.42	11.89	11.48
Net foreign assets of banking system (TZS bn)	15,766.0	14,646.0	13,575.4

Source: Bank of Tanzania, Tables 2.2.1, 2.3.1, A3, A4. The 25-year bond figure for Aug-25 is the Table A4 monthly yield.

4.1 Reading the stance

Tightening is modest. A real policy rate near 2 percentage points, with private-sector credit growing 33% and M3 at 25.5%, is not restrictive by itself. The Bank expects the stance to moderate credit gradually.
Liquidity is strong, FX cover is thinning at the bank level. Net foreign assets of the banking system fell to TZS 13,575.4 billion, and those of other depository corporations turned negative (TZS -155.5 billion).
Government borrowing is well absorbed. Bond auctions were oversubscribed (bid-to-cover 3.4), and the 25-year yield eased to 11.48%, signalling investor confidence.

05 — External SectorExternal Position and Debt: The Foundations of the Shilling

The Bank judges the external sector sustainable, but higher costs of petroleum and intermediate inputs pushed import growth above export growth. In the year to August 2026, exports of goods and services rose 16.4% to USD 20,216.2 million while imports rose 21.4% to USD 21,269.2 million.

Trade, Services and the Current Account

USD million, year ending August (Table 2.7.1 and Chart 2.7.2)

Item (year ending Aug)	2025	2026p	Change
Goods exports (USD m)	9,981.2	11,960.8	+19.8%
o/w Gold exports	4,321.5	5,625.0	+30.2%
Manufactured goods exports	1,533.9	2,213.4	+44.3%
Service receipts	7,389.8	8,255.4	+11.7%
o/w Travel	4,314.7	4,389.7	+1.7%
o/w Transport	2,612.5	3,303.3	+26.4%
Goods trade balance	-4,340.3	-5,810.2	+33.9%
Current account balance	-1,700.9	-2,481.8	+45.9%

Source: Bank of Tanzania, Tables 2.7.1 and A6. Gold, manufactured goods and travel/transport changes are TICGL/TERI computations from the published values.

Gold is doing the heavy lifting

Gold exports added USD 1,303.5 million, nearly two-thirds of the USD 1,979.6 million rise in goods exports. This supports the shilling today but ties its stability to bullion prices (USD 4,411 per ounce in August, up from USD 4,073 in July) and to the Bank's gold purchase programme.

Currency Composition of External Debt

Share of disbursed outstanding debt, Aug-26 (Table 2.6.4)

Total Debt Stock

USD million, end-period (Table A10)

Debt and reserves, end-Aug 2026	Value	Why it matters for the shilling
National debt stock	USD 52,224.4M	+1.7% in a month
External debt (70.3% of total)	USD 36,731.5M	Public share 83.7%
Share denominated in USD	64.9%	Servicing cost rises as TZS weakens
External debt service (Aug)	USD 139.1M	USD 69.2M principal
Domestic debt	TZS 40,899.5bn	+3.6% in a month
Gross official reserves	USD 5,888.2M	4.2 months of imports
External debt arrears	USD 1,040.0M	Up from USD 578.9M a year earlier

Source: Bank of Tanzania, Sections 2.6, 2.7, Tables 2.6.1–2.6.6 and A10.

06 — OutlookRisks, Scenarios and Recommendations

The Bank lists prolonged Middle East conflict and a strengthening El Niño as the main downside risks. TICGL/TERI adds the domestic transmission channels that connect them to the shilling and to prices.

Risk	Transmission to shilling and inflation	Evidence in the review
Renewed oil and shipping shock	Higher fuel and freight costs, wider import bill, FX demand	Crude USD 84.4 (+5.8%); petroleum imports +51.7%; freight +29.5%
Core and services inflation build-up	Sticky prices that outlast the oil shock	Core 4.1%, services 5.9%, rising since March
Widening current account	Pressure on FX supply if gold or tourism weakens	Deficit USD 2,481.8M vs 1,700.9M
El Niño and regional drought	Food supply and transport disruption	NFRA stocks lower than a year ago
USD-heavy debt	Higher local-currency service costs on depreciation	64.9% USD share; arrears USD 1,040.0M
Strong credit growth	Demand-led imports and price pressure	Private credit +33.0%; transport and communication credit +77.2%

Where Inflation Could Go: Illustrative Paths

Headline inflation, percent. TICGL/TERI illustration, not a forecast

Reading the scenarios

Benign: oil eases, food stays low, core plateaus near 4%.
Base: core keeps drifting up, energy stays elevated, headline holds around the upper half of the 3–5% band.
Adverse: renewed Hormuz disruption plus a weaker shilling pushes headline toward the 5% ceiling. These paths are stylised to show sensitivity, not predictions.

Recommendations

For policy makers

Keep the stance data-dependent, focusing on core and services inflation rather than headline.
Maintain FX buffers and reserve accumulation through gold purchases while diversifying export earnings.
Publish exchange-rate pass-through estimates so markets can anticipate policy responses.
Manage the currency mix and arrears in external borrowing.

For businesses and investors

Stress-test models for a TZS 2,750–2,850 per USD range and 5–6% inflation.
Match currency of revenue and debt; hedge imported inputs where markets allow.
Index contracts and tariffs to inflation or FX where regulation permits.
Watch core inflation and the CBR, not only headline CPI, when pricing multi-year projects.

"A stable shilling and low headline inflation are the result of good management, but the ingredients of the next squeeze are visible: a core-led price build-up, a wider import bill and a debt stock priced in dollars. Stability is something to defend before it is tested."

— TICGL / Tanzania Economic Research Institute (TERI)

07 — What TICGL DoesFrom Macro Data to Bankable Decisions

Exchange-rate and inflation assumptions decide whether a project clears its return hurdle. TICGL (Tanzania Investment and Consultant Group Ltd), with its research arm TERI, combines original economic research with practical advisory outputs for investors, government institutions and development partners across Tanzania and East Africa. Three technical service lines are most directly affected by the issues in this report.

Feasibility Studies

Pre-feasibility and full feasibility studies for PPP and private projects (markets, buildings, transport, infrastructure).
Financial models with explicit FX and inflation escalation, TZS and USD cash flows, NPV, IRR and DSCR.
Sensitivity and scenario analysis on tariffs, capex indexation and interest rates.
Legal, institutional and risk-allocation review aligned to PPP requirements.

Market Entry Advisory

Sector and location screening, demand sizing and competitor mapping.
Pricing and margin strategy under currency and cost-pass-through scenarios.
Entry-mode choice (import, JV, local production) and regulatory pathway including incentives.
Partner and supplier identification, and landed-cost modelling.

Market Research

Consumer, demographic and demand studies built on official BoT, NBS and sector data.
Macro and sector outlooks with 3–5 year projections.
Primary surveys, stakeholder interviews and willingness-to-pay analysis.
Policy briefs, training materials and SEO-ready research publications.

Why this report matters to clients

With core inflation at 4.1%, a policy rate of 6.25% and an exchange rate near TZS 2,657 per USD, project assumptions set even a year ago may now be stale. A refresh of the macro layer in a feasibility model, pricing plan or market-entry case is a low-cost way to avoid mispriced risk.

Talk to TICGL/TERI

Request a feasibility, market-entry or market-research scoping call, or a fuller briefing on this report.

What We Do → TICGL Markets → TERI Research → ✉️ economist@ticgl.com

08 — SourcesMethod & Source Note

Basis

All figures are taken from the Bank of Tanzania Monthly Economic Review, September 2026 (data to August 2026): Sections 1.0–3.0 and Statistical Tables A1–A10, which cite the National Bureau of Statistics, Ministry of Finance, Tanzania Revenue Authority, World Bank and Bank of Tanzania computations. Figures marked "TICGL calc." are percentage changes or differences computed from those published values. The scenario chart is an illustration and not a forecast. External debt arrears and exchange-rate end-period values are from Table A10; August 2026 data are provisional.

09 — Quick AnswersFrequently Asked Questions

What was Tanzania's inflation rate in August 2026?

Headline inflation was 4.3%, up from 4.2% in July and 3.4% in August 2025, inside the 3–5% target. Core inflation was 4.1%, food 3.7% and energy, fuel and utilities 8.5%.

How did the Tanzanian shilling perform in August 2026?

It averaged TZS 2,657.01 per USD versus 2,653.52 in July. The 6.7% annual depreciation largely reflects the strong August 2025 base (TZS 2,490.16 per USD).

What is the Bank of Tanzania's Central Bank Rate?

6.25%, raised in July 2026, with the 7-day interbank rate kept inside a 4.75–7.75% corridor.

Is the shilling the main driver of inflation?

Not on this evidence. Fuel, transport and services costs explain most of the rise. But a weaker shilling amplifies imported inflation, and with the current account deficit at USD 2,481.8 million it is a risk to monitor.

Are Tanzania's foreign exchange reserves adequate?

Yes. Gross official reserves were USD 5,888.2 million at end-August 2026, equal to 4.2 months of projected imports excluding FDI-related imports, above the national benchmark.

Muhtasari

Muhtasari kwa Kiswahili

Je, Shilingi ya Tanzania Inaweza Kuhimili Mfumuko wa Bei? Kwa mujibu wa Mapitio ya Kila Mwezi ya Uchumi ya Benki Kuu ya Tanzania (Septemba 2026), mfumuko wa bei wa jumla ulifikia asilimia 4.3 Agosti 2026 (Julai 4.2%, Agosti 2025 3.4%), ukiwa ndani ya lengo la asilimia 3 hadi 5. Mfumuko wa bei wa msingi (core) ni asilimia 4.1, chakula 3.7, na nishati 8.5.

Shilingi: Wastani wa Agosti ulikuwa TZS 2,657.01 kwa USD, ikilinganishwa na 2,653.52 Julai. Kushuka kwa asilimia 6.7 kwa mwaka kunatokana zaidi na "base effect" kwa sababu shilingi iliimarika sana Agosti 2025 (TZS 2,490.16). Kwa mwezi hadi mwezi, shilingi imetulia.

Mfumuko wa bei umebadilika sura: Mwaka jana chakula kilichangia pointi 1.8 za mfumuko; sasa kinachangia 0.8, wakati mfumuko wa msingi unachangia pointi 3.1. Mfumuko wa usafiri ni asilimia 13.8 kutokana na bei za mafuta kupita hadi nauli.

Sera ya fedha: Benki Kuu iliongeza Kiwango cha Benki Kuu (CBR) hadi asilimia 6.25 Julai 2026. Mikopo kwa sekta binafsi inakua kwa asilimia 33 na M3 kwa asilimia 25.5, kuonesha mahitaji makubwa ya ndani.

Sekta ya nje: Nakisi ya akaunti ya sasa imeongezeka hadi USD milioni 2,481.8 (kutoka 1,700.9), huku uagizaji wa mafuta ukipanda asilimia 51.7 hadi USD milioni 3,425.6. Akiba ya fedha za kigeni ni USD milioni 5,888.2, sawa na miezi 4.2 ya uagizaji. Asilimia 64.9 ya deni la nje liko kwa dola ya Marekani.

Hatari na ushauri: Mgogoro wa Mashariki ya Kati, El Niño na ongezeko la mfumuko wa msingi ni hatari kuu. Wawekezaji wapime miradi kwa hali ya TZS 2,750–2,850 kwa USD na mfumuko wa asilimia 5–6. TICGL/TERI hutoa upembuzi yakinifu (feasibility), ushauri wa kuingia sokoni na utafiti wa soko.

Hitimisho: Utulivu wa shilingi na mfumuko wa chini ni mafanikio, lakini viashiria vya shinikizo lijalo vinaonekana. Utulivu unahitaji kulindwa kabla haujajaribiwa.

Mfumuko wa jumla: 4.3% · Msingi: 4.1% · Nishati: 8.5%
Shilingi: TZS 2,657.01 kwa USD (-6.7% kwa mwaka, base effect)
CBR: 6.25% · Akiba: USD milioni 5,888.2 (miezi 4.2)
Nakisi ya akaunti ya sasa: USD milioni 2,481.8

Chanzo: Benki Kuu ya Tanzania, Mapitio ya Kila Mwezi ya Uchumi, Septemba 2026. Kwa maelezo zaidi: economist@ticgl.com.

Disclaimer & scope

Prepared by TERI for research purposes only; not investment, legal or financial advice, and not the position of the Government of Tanzania or the Bank of Tanzania. All figures come from the BoT September 2026 review; derived figures are labelled as TICGL calculations.

01 - OVERVIEWExecutive Summary

The BoT describes the external sector as sustainable and reserves as adequate, yet the data show a currency and a debt stock moving in the same uncomfortable direction. The shilling lost ground steadily from TZS 2,436.8 per USD (end-November 2025) to 2,639.9 (end-August 2026), while national debt climbed from US$49.1 billion to US$52.2 billion in twelve months.

End-period depreciation

7.2%

2,463.3 to 2,639.9 (TICGL calc.)

External debt in TZS

+16.0%

USD +8.2%, plus FX effect (TICGL calc.)

External arrears

$1,040m

vs $578.9m a year ago (+79.7%)

Current account deficit

$2,481.8m

vs $1,700.9m (+45.9%)

Central finding

Stability is intact but increasingly bought with buffers. Reserves still exceed benchmark, the central bank sold only a net US$45.4 million in August, and interbank liquidity is orderly. But a wider current account deficit (oil imports +51.7%), falling net foreign assets (-13.9% y/y) and a debt stock that is two-thirds dollar-linked mean each further shilling slide raises the cost of servicing debt directly.

02 - CURRENCYThe Shilling: Gradual Slide, Not a Shock

The shilling averaged TZS 2,657.01 in August against 2,653.52 in July. The 6.7% annual depreciation largely reflects a base effect, since the shilling appreciated sharply in August 2025 to an average of TZS 2,490.16 from 2,666.79 in July 2025. The end-period series nonetheless shows a clear, persistent weakening since December 2025.

Shilling: End-of-Period Exchange Rate

TZS per US dollar, Aug 2025 - Aug 2026

FX indicator	Aug-25	Jul-26	Aug-26
Monthly average (TZS/USD)	2,490.16	2,653.52	2,657.01
End of period (TZS/USD)	2,463.3	2,649.7	2,639.9
IFEM transactions (US$m)	n/a	227.1	190.3
BoT net FX sales (US$m)	n/a	n/a	45.4

Interbank FX was liquid, supported by gold and traditional export inflows and tourism; BoT intervention was aimed at smoothing volatility.

03 - DEBTNational Debt: US$52.2 Billion and Rising

The debt stock grew 1.7% in August alone. External debt was US$36,731.5 million (+0.8% m/m, 83.7% public) and domestic debt TZS 40,899.5 billion (+3.6% m/m, +9.6% y/y, driven by Treasury bond issuance). Measured in dollars, domestic debt appears flat only because the shilling has weakened.

Total Debt Stock: External vs Domestic

US$ million, end of month

External Debt by Creditor

Aug 2026, share of US$36,731.5m

External Debt Arrears

US$ million, end of month

Debt indicator	Aug-25	Jul-26	Aug-26
Total debt (US$m)	49,086.4	51,350.8	52,224.4
External debt (US$m)	33,940.1	36,454.3	36,731.5
Domestic debt (TZS bn)	37,309.8	39,472.2	40,899.5
Multilateral share of external	59.0%	59.6%	59.5%
Commercial share of external	34.5%	34.3%	34.4%
External arrears (US$m)	578.9	984.7	1,040.0

Concessional multilateral lenders hold 59.5% of external debt; commercial lenders 34.4%, whose terms are costlier and less forgiving of currency weakness. In August, disbursements were US$160.1m against debt service of US$139.1m (principal 69.2, interest 69.9).

04 - THE LINKWhere Currency Meets Debt

Debt is owed in foreign currency but serviced from shilling revenue, so the exchange rate transmits straight into the fiscal burden.

External Debt vs Average Exchange Rate

US$ million (bars) and TZS/USD annual average (line), 2018-2025

Currency Composition of External Debt

% of disbursed outstanding debt

Illustrative sensitivity (TICGL calc.)	Value
External debt at TZS 2,639.9/USD	≈ TZS 96,967 bn
Same debt at Aug-25 rate (2,463.3)	≈ TZS 83,605 bn
Added shilling cost from depreciation	≈ +16.0%
Cost of each further 1% depreciation	≈ TZS 970 bn
Cost of a 10% depreciation	≈ TZS 9,700 bn
Interest paid FY2025/26 / total revenue	13.4% (TZS 5,605.3bn / 41,930.4bn)

Method: US$ external debt stock multiplied by end-period rate. Illustrative only; it assumes no change in the stock and ignores hedging and concessional repayment schedules.

Why this matters

USD accounts for 64.9% of disbursed external debt, the euro 18.4% (up from 17.9%) and the yuan 6.7%. A weaker shilling raises debt service in shilling terms, while a stronger euro, which rose to US$6,696.7m-equivalent in the stock, adds a second channel. Foreign interest paid in FY2025/26 was TZS 1,914.7bn and domestic interest TZS 3,690.6bn.

05 - BUFFERSExternal Balance and Reserves

Higher oil and intermediate-input costs pushed imports above exports. Goods imports rose 24.1% to US$17,770.9m while goods exports rose 19.8% to US$11,960.8m, driven by gold (US$5,625.0m, from 4,321.5m), which supplied nearly two-thirds of the export gain. Net foreign assets of the banking system fell to TZS 13,575.4bn (-13.9% y/y), and commercial banks' net foreign assets turned negative (TZS -155.5bn).

Trade Flows, Year Ending August

US$ million

External indicator (year to Aug)	2025	2026p	Change
Current account (US$m)	-1,700.9	-2,481.8	+45.9%
Goods account (US$m)	-4,340.3	-5,810.2	+33.9%
Petroleum imports (US$m)	2,257.4	3,425.6	+51.7%
Freight payments (US$m)	1,300.4	1,683.4	+29.5%
Travel receipts (US$m)	4,314.7	4,389.7	+1.7%
Gold exports (US$m)	4,321.5	5,625.0	+30.2%

Gross official reserves stood at US$5,888.2m, equivalent to 4.2 months of projected imports (excluding FDI-related), above the national benchmark but below the 4.9 months recorded at end-2025 (US$6,329.0m).

06 - POLICYMonetary Policy and Domestic Debt

The MPC raised the Central Bank Rate to 6.25% in July 2026 to contain second-round inflation from energy, fertiliser and transport costs. Headline inflation was 4.3% (core 4.1%, energy 8.5%, transport 13.8%), within the 3-5% target. Tighter policy supports the shilling, but M3 grew 25.5% and private credit 33.0%, which sustains import demand.

Domestic Debt by Holder

Aug 2026, share of TZS 40,899.5bn

Policy & yields	Latest
Central Bank Rate	6.25%
7-day IBCM rate (Aug avg)	6.67%
Policy corridor	4.75-7.75%
T-bill weighted yield	4.86%
15-yr / 25-yr bond yield	10.55% / 11.48%
Overall lending rate	15.05%
Bond auction bid-to-cover	3.4x
Domestic debt service (Aug)	TZS 633.4bn

Government bonds make up 85.1% of domestic debt, T-bills 4.4% and the overdraft 10.2%. Strong auction demand shows investor confidence, and a deep local market is the natural hedge against dollar exposure.

Read alongside TICGL/TERI's investment climate analysis

Currency and debt pressures are central to how investors price Tanzania in 2026.

Opportunities & Risks in Tanzania, 2026 →

07 - RISKSWhat Could Break Stability

Key pressure points

Oil and shipping: Hormuz disruption keeps crude at US$84.4/bbl (about 36% above pre-conflict), widening the import bill.
El Niño: a strengthening event into early 2027 threatens harvests, food prices and agricultural exports.
Dollar debt service: 64.9% USD plus 18.4% euro exposure magnifies any depreciation.
Arrears build-up: external arrears are up nearly 80% in a year, led by commercial debt (US$417.8m principal arrears).
Thinner buffers: reserves covered 4.2 months versus 4.9 at end-2025.

Mitigants

Tax revenue ran 12.5% above target in June 2026 (TZS 3,733.2bn).
Gold purchases and export earnings support reserve rebuilding; tourism remains resilient.
A deep domestic bond market and a 59.5% concessional multilateral share limit refinancing stress.

Recommendations

Prioritise export-earning and import-substituting investments (energy, agro-processing, industry) to narrow the current account.
Clear commercial arrears and favour concessional or shilling-denominated borrowing to cut FX exposure.
Publish annual currency-composition and sensitivity analysis alongside debt sustainability reports.
Keep reserve cover above benchmark while using intervention only to smooth volatility.

"A currency that slides slowly is easy to ignore. But when two-thirds of the debt is in dollars, every shilling lost is a bill that arrives later. Stability is not only the exchange rate. It is whether the economy earns the dollars it owes."

- TICGL / Tanzania Economic Research Institute (TERI)

08 - FAQFrequently Asked Questions

How much did the shilling depreciate in August 2026?

It averaged TZS 2,657.01 per USD (July: 2,653.52), depreciating 6.7% y/y, largely a base effect.

How large is Tanzania's national debt?

US$52,224.4 million at end-August 2026: external US$36,731.5m (70.3%) and domestic TZS 40,899.5bn.

Why does a weaker shilling matter for debt?

64.9% of external debt is in US dollars and 18.4% in euros, so depreciation raises the shilling cost of service. TICGL/TERI estimates about TZS 970bn per 1%.

Are reserves adequate?

Yes: US$5,888.2m, 4.2 months of imports, above the national benchmark, but lower than 4.9 months at end-2025.

Method & sources

Built from the Bank of Tanzania Monthly Economic Review, September 2026: Sections 2.2-2.7 and Tables A1, A5, A7, A10. Exchange rates for debt conversion use Table A10 end-of-period rates. "TICGL calc." figures are derived by TERI.

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Muhtasari kwa Kiswahili

Utulivu wa Shilingi dhidi ya Deni la Taifa - Shilingi ilikuwa wastani wa TZS 2,657.01 kwa dola Agosti 2026, ikidhoofika kwa asilimia 6.7 kwa mwaka. Deni la taifa lilifikia Dola milioni 52,224.4 (ongezeko la asilimia 6.4 kwa mwaka).

Deni la nje: Dola milioni 36,731.5 (asilimia 70.3 ya deni lote). Asilimia 64.9 ni dola za Marekani na asilimia 18.4 ni euro, kwa hiyo shilingi ikidhoofika gharama za kulipa deni huongezeka. Makadirio ya TICGL: kila asilimia 1 ya kushuka kwa shilingi huongeza takriban TZS bilioni 970.

Akiba ya fedha za kigeni: Dola milioni 5,888.2, sawa na miezi 4.2 ya uagizaji, juu ya kiwango cha taifa lakini chini ya miezi 4.9 mwishoni mwa 2025. Upungufu wa akaunti ya sasa umeongezeka hadi Dola milioni 2,481.8, ukichochewa na uagizaji wa mafuta (+51.7%).

Hatari: Malimbikizo ya madeni ya nje yamepanda hadi Dola milioni 1,040 (+79.7%), bei za mafuta, El Niño, na utegemezi wa deni la dola.

Mapendekezo: Kuongeza mauzo ya nje, kulipa malimbikizo ya madeni ya kibiashara, kupendelea mikopo nafuu au ya shilingi, na kulinda akiba ya fedha za kigeni.

Kiwango cha Benki Kuu (CBR): asilimia 6.25
Mfumuko wa bei: asilimia 4.3
Deni la ndani: TZS bilioni 40,899.5

Chanzo: Benki Kuu ya Tanzania, Monthly Economic Review, Septemba 2026. Mawasiliano: economist@ticgl.com.

Disclaimer & scope

Prepared by TERI for research purposes only; not investment, legal or financial advice, and not the position of the Government of Tanzania or the Bank of Tanzania. "Budget" means the approved 2025/26 budget; "Estimate" is the revised profile in Table A2. Where revised estimates appear to reclassify lines, this is flagged as a TICGL reading.

01 - OVERVIEWExecutive Summary

Tax administration gains lifted collections above target in a year when the macro environment turned harder: oil prices rose, the shilling weakened and the Bank of Tanzania tightened policy in July. Revenue strength allowed spending to be maintained while borrowing came in below plan.

Income tax vs budget

+16.3%

TZS 13,220.6bn

Local VAT & excise

-7.5%

TZS 6,492.3bn vs 7,016.5bn

Wage bill vs budget

+21.6%

TZS 13,279.3bn

Interest vs budget

-13.7%

TZS 5,605.3bn

Central finding

The outturn is better than the budget on the bottom line, but the quality of the improvement is mixed. Roughly TZS 1.1 trillion of the deficit improvement came from lower interest and under-spent development, while the revenue beat was concentrated in two tax heads. Weak local VAT and a rising wage-plus-interest bill (45.0% of revenue, TICGL calc.) narrow the room for development spending.

02 - REVENUECentral Government Revenue, FY2025/26

Total revenue including local government own sources reached TZS 41,930.4bn against a budget of 40,466.1bn. Central government revenue was TZS 40,323.7bn (+9.4% vs budget), of which tax was TZS 34,579.2bn (82.5% of total revenue, TICGL calc.) and non-tax TZS 5,744.5bn.

Revenue by Source: Budget vs Actual

TZS billion, July 2025 - June 2026

Composition of Tax Revenue

Share of TZS 34,579.2bn actual

Tax head	Share of tax
Income taxes	38.2%
Taxes on imports	36.3%
VAT & excise (local)	18.8%
Other taxes	6.7%
Total tax	100%

Revenue line (TZS bn)	Budget	Estimate	Actual	vs Budget
Total revenue (incl. LGAs)	40,466.1	40,466.1	41,930.4	+3.6%
Central government revenue	36,857.7	38,785.6	40,323.7	+9.4%
Tax revenue	32,176.0	32,176.0	34,579.2	+7.5%
Taxes on imports	11,563.0	11,563.0	12,559.2	+8.6%
VAT & excise on local goods	7,016.5	7,016.5	6,492.3	-7.5%
Income taxes	11,367.9	11,268.6	13,220.6	+16.3%
Other taxes	4,887.7	2,328.0	2,307.2	-52.8%
Non-tax revenue	4,681.7	6,609.6	5,744.5	+22.7%
LGA own sources	1,680.5	1,680.5	1,606.7	-4.4%

The "Other taxes" budget falls from 4,887.7 to 2,328.0 in the revised estimate while non-tax rises from 4,681.7 to 6,609.6, which suggests a reclassification between the two lines (TICGL reading). Compare against the Estimate column for those two items. Non-tax actual was 13.1% below its revised estimate.

03 - JUNE 2026June Revenue: Strongest Month, Non-Tax Lagging

June collections reached TZS 4,658.2bn, 5.4% above the monthly target. Central government collected TZS 4,512.1bn (96.9% of the total). Tax revenue of TZS 3,733.2bn was 12.5% above target and about 20% above June 2025 (TICGL calc.). Non-tax revenue of TZS 778.9bn missed its 953.8bn target by 18.3%.

June Revenue: 2025 Actual vs 2026 Estimate vs 2026 Actual

TZS billion

June (TZS bn)	2025 actual	2026 est.	2026 actual	y/y
Taxes on imports	1,012.1	995.6	1,213.3	+19.9%
Income tax	1,441.8	1,436.4	1,702.9	+18.1%
Local VAT & excise	490.9	684.6	587.5	+19.7%
Other taxes	164.0	203.2	229.5	+40.0%
Non-tax revenue	470.4	953.8	778.9	+65.6%
Grants	53.0	188.8	118.7	+124.0%

Local VAT grew 19.7% y/y in June but still ran 14.2% below its monthly estimate (TICGL calc.), consistent with the full-year VAT shortfall.

04 - EXPENDITURECentral Government Expenditure, FY2025/26

Total spending was TZS 48,451.0bn, 0.7% under budget. Recurrent expenditure was TZS 31,393.7bn (64.8%) and development expenditure TZS 17,057.2bn (35.2%), 97.5% of the budgeted 17,493.7bn (TICGL calc.).

Expenditure by Category: Budget vs Actual

TZS billion, July 2025 - June 2026

Expenditure line (TZS bn)	Budget	Estimate	Actual	vs Budget
Total expenditure	48,775.0	48,775.0	48,451.0	-0.7%
Recurrent expenditure	31,281.3	31,169.6	31,393.7	+0.4%
Wages and salaries	10,917.5	13,121.5	13,279.3	+21.6%
Interest payments	6,493.7	6,938.9	5,605.3	-13.7%
Domestic interest	3,697.3	3,856.4	3,690.6	-0.2%
Foreign interest	2,796.4	3,082.5	1,914.7	-31.5%
Other goods, services & transfers	7,088.6	11,109.2	12,509.2	+76.5%
Development & net lending	17,493.7	17,605.4	17,057.2	-2.5%
Locally financed	12,117.8	12,253.0	13,044.2	+7.6%
Foreign financed	5,375.9	5,352.4	4,013.0	-25.4%

Wages / tax revenue

38.4%

TICGL calc.

Interest / total revenue

13.4%

TICGL calc.

Wages + interest / revenue

45.0%

TZS 18,884.6bn

Foreign-funded dev. executed

74.6%

of TZS 5,375.9bn budget

The wage and "other goods" budget lines were revised sharply upward (10,917.5 to 13,121.5 and 7,088.6 to 11,109.2), again suggesting reclassification; against the revised estimate, wages were 1.2% above and other goods 12.6% above.

05 - JUNE 2026June Spending: Development Outlays Double

In June the Government aligned spending with available resources: TZS 4,720.1bn in total, of which TZS 2,797.9bn was recurrent and TZS 1,922.2bn development, 5.2% below the TZS 4,979.8bn estimate. Development spending was 2.1 times its June 2025 level (TZS 909.4bn), reflecting year-end project payments (TICGL calc.).

June Expenditure: 2025 Actual vs 2026 Estimate vs 2026 Actual

TZS billion

June (TZS bn)	2025 actual	2026 est.	2026 actual	y/y
Wages and salaries	970.7	1,119.8	1,163.1	+19.8%
Interest costs	571.3	644.0	597.4	+4.6%
Other recurrent	898.6	1,201.6	1,037.5	+15.5%
Development	909.4	2,014.4	1,922.1	+111.4%

Read alongside TICGL/TERI's shilling and debt analysis

Interest costs, foreign-financed projects and external borrowing connect the budget directly to the exchange rate.

Shilling Stability vs National Debt →

06 - FINANCINGDeficit and How It Was Financed

The balance before grants was TZS -6,520.6bn (budget -8,308.9bn) and the overall deficit TZS -6,147.7bn (budget -7,239.0bn). Grants were TZS 917.6bn, below the 1,069.9bn plan. Net foreign financing was TZS 2,705.9bn (44%) against 4,286.3bn planned; net domestic financing was TZS 3,441.7bn (56%) against 2,952.6bn planned.

Fiscal Balance and Financing: Budget vs Actual

TZS billion (deficits negative)

Financing (TZS bn)	Budget	Actual
Foreign loans (gross)	5,966.4	6,064.5
Foreign amortization	-4,389.7	-3,427.5
Foreign financing (net)	4,286.3	2,705.9
Bank borrowing	2,466.1	1,544.0
Non-bank (net of amortization)	486.5	1,897.8
Domestic financing (net)	2,952.6	3,441.7
Overall financing	7,239.0	6,147.7

June alone showed a primary-style surplus: balance after grants of +TZS 56.9bn, and overall deficit of TZS 362.6bn after adjustments of -419.5bn. Zanzibar (August 2026): resources TZS 251.3bn (+10.4% vs target) and spending TZS 459.0bn, 73.3% on development.

07 - OUTLOOKRisks and Recommendations

Fiscal pressure points

Weak local VAT: a 7.5% annual shortfall and 14.2% June miss point to refund pressure, compliance gaps or soft domestic demand; verify before relying on 2026/27 VAT targets.
Rigid recurrent bill: wages and interest absorb 45% of revenue, limiting fiscal space for capital projects.
Foreign project execution: only 74.6% of foreign-financed development spending was delivered, delaying growth-supporting infrastructure.
Non-tax revenue: 18.3% below target in June, with delivery on institution collections still uneven.

Strengths

Income tax (+16.3%) and import taxes (+8.6%) show improved administration and a larger tax base.
Borrowing came in below plan, with the deficit TZS 1.09tn narrower than budgeted.
Domestic financing leans increasingly on non-bank investors (TZS 1,897.8bn), easing bank crowding-out.

Recommendations

Audit VAT refunds and e-invoicing coverage to recover the local VAT gap.
Publish a reconciled budget-to-estimate bridge so reclassifications between "other taxes", non-tax, wages and other goods are transparent.
Speed up disbursement of foreign-financed projects by clearing procurement and counterpart-fund bottlenecks.
Cap wage-bill growth through payroll audits while protecting priority-sector hiring.

"A budget beat is not the same as a budget at ease. When wages and interest take 45 cents of every shilling collected, the test of fiscal strength is how much is left to build."

- TICGL / Tanzania Economic Research Institute (TERI)

08 - FAQFrequently Asked Questions

How much revenue did Tanzania collect in FY2025/26?

TZS 41,930.4bn including LGAs (+3.6% vs budget); central government revenue was TZS 40,323.7bn, with tax of TZS 34,579.2bn.

Which taxes beat and missed targets?

Income taxes (+16.3%) and import taxes (+8.6%) beat budget; local VAT and excise missed by 7.5%.

What was the fiscal deficit?

TZS 6,147.7bn against 7,239.0bn budgeted, financed 44% foreign and 56% domestic.

What drove spending?

Development TZS 17,057.2bn (35%), wages TZS 13,279.3bn, other goods and services TZS 12,509.2bn and interest TZS 5,605.3bn.

Method & sources

Built from BoT Monthly Economic Review, September 2026: Section 2.5, Charts 2.5.1-2.5.2, Table A2 (Central Government Operations, cheques issued, Tanzania Mainland) and Section 3.2 (Zanzibar). Variances are computed against the approved budget unless stated; 2026 actuals are provisional.

Request a Full Briefing

Government agencies, investors and partners may request a fuller fiscal briefing from TERI.

✉️ economist@ticgl.com →

Muhtasari kwa Kiswahili

Mapato na Matumizi ya Serikali Kuu, Mwaka wa Fedha 2025/26 - Serikali ilikusanya TZS trilioni 41.93, asilimia 3.6 juu ya bajeti. Matumizi yalikuwa TZS trilioni 48.45 (asilimia 0.7 chini ya bajeti) na nnakisi ya jumla TZS trilioni 6.15 badala ya 7.24 iliyopangwa.

Mapato: Kodi ya mapato (+16.3%) na kodi ya uagizaji (+8.6%) zilizidi malengo, lakini VAT na ushuru wa ndani ulipungua kwa asilimia 7.5. Mwezi Juni, kodi ilizidi lengo kwa asilimia 12.5 na mapato yasiyo ya kodi yalipungua kwa asilimia 18.3.

Matumizi: Mishahara TZS bilioni 13,279.3 (+21.6% juu ya bajeti), riba TZS bilioni 5,605.3 (-13.7%), na maendeleo TZS bilioni 17,057.2. Mishahara na riba pamoja vinatumia asilimia 45 ya mapato.

Ufadhili: Nakisi ilifidiwa kwa mikopo ya nje (TZS bilioni 2,705.9) na ya ndani (TZS bilioni 3,441.7). Miradi ya maendeleo inayofadhiliwa na nje ilitekelezwa kwa asilimia 74.6 tu.

Mapendekezo: Kuboresha makusanyo ya VAT, kudhibiti ukuaji wa mishahara, kuharakisha miradi ya nje, na kuchapisha maelezo ya mabadiliko ya uainishaji wa bajeti.

Chanzo: Benki Kuu ya Tanzania, Monthly Economic Review, Septemba 2026. Mawasiliano: economist@ticgl.com.

Disclaimer & scope

Prepared by TERI for research purposes only; not investment, legal or financial advice, and not the position of the Revolutionary Government of Zanzibar or the Bank of Tanzania. Figures are from the BoT September 2026 review; derived figures are labelled as TICGL calculations.

01 - OVERVIEWExecutive Summary

Zanzibar's economy is service-led and externally strong, but its price level and budget are more exposed than the mainland's. Services (mostly tourism) generate a US$1.7 billion surplus that more than covers a US$770 million goods deficit.

Food inflation

9.8%

vs 4.2% a year ago

Services surplus (12m)

$1,707.2m

+20.2%

Goods deficit (12m)

$769.8m

+49.7%

Cloves share of goods exports

61.4%

US$42.5m of 69.2m (TICGL calc.)

Central finding

The external position is strong and diversifying into capital-goods imports (3.1 times last year's level), but it rests on tourism receipts and one volatile crop. On the fiscal side, spending ran 1.8 times monthly resources (a TZS 207.7bn gap, TICGL calc.), with grants and World Bank support filling the space left by tax shortfalls.

02 - PRICESInflation: Easing, but Food-Led

Headline inflation eased to 5.6% in August from 6.0% in July, but was above the 3.9% of August 2025. Prices fell 0.2% month on month (August 2025: +0.1%). The annual rise reflects food prices, especially Mbeya rice, sugar, fish and yellow cooking bananas, plus higher transport costs from fuel. Food (weight 41.9%) contributes roughly 4.0 of the 5.6 percentage points (TICGL calc.).

Annual Inflation by Main Group

Percent, selected groups

Main group (annual %)	Weight	Aug-25	Jul-26	Aug-26	m/m Aug-26
Food & non-alcoholic beverages	41.9	4.8	10.9	9.6	-0.4
Housing, water, electricity, gas	25.8	3.0	0.5	1.0	-0.5
Transport	9.1	1.9	4.7	5.2	0.3
Clothing & footwear	6.3	5.5	1.4	1.5	0.1
Furnishings & household	4.8	3.7	4.0	4.3	0.0
Information & communication	4.2	2.7	0.3	0.3	0.0
Restaurants & accommodation	1.4	1.6	6.2	6.2	0.0
Education	1.6	3.8	0.3	1.1	0.8
Recreation, sport & culture	1.1	4.3	2.7	3.0	0.4
Personal care & misc.	1.7	5.4	1.6	1.1	0.0
Alcohol, tobacco & narcotics	0.2	2.7	3.5	4.2	0.1
Health	1.3	1.6	0.9	0.9	0.0
Headline (all items)	100.0	3.9	6.0	5.6	-0.2

Food inflation: 4.2% (Aug-25), 11.1% (Jul-26), 9.8% (Aug-26). Non-food: 3.7%, 1.9%, 2.2%. Table 3.1.1 reports food and non-alcoholic beverages at 9.6% and the "Food" selected group at 9.8%. Base: July 2022 = 100.

03 - PUBLIC FINANCEGovernment Budget: Grants Fill the Gap

Resources (revenue and grants) were TZS 251.3bn in August 2026, 10.4% above target, thanks to World Bank budget support. Domestic revenue of TZS 198.0bn was 78.8% of resources but only 92.7% of target. Tax revenue (TZS 174.5bn, 88.1% of domestic revenue) reached 88.7% of target. Every major tax head missed its target except VAT and excise, which beat theirs; non-tax revenue of TZS 23.6bn exceeded its target by 38.2%.

Domestic Revenue, August: 2025 Actual vs 2026 Estimate vs 2026 Actual

TZS billion

Revenue (TZS bn)	Aug-25	2026 est.	Aug-26	vs est.
Tax on imports	35.1	40.5	35.6	-12.1%
Local VAT & excise	40.0	56.8	60.5	+6.5%
Income tax	13.4	39.0	31.3	-19.7%
Other taxes	70.2	60.3	47.1	-21.9%
Non-tax revenue	15.8	17.0	23.6	+38.8%
Domestic revenue	174.5*	213.6	198.0	-7.3%

*Sum of 2025 components (TICGL calc.: 174.5). "Other taxes" include hotel and restaurant levies, tour operator levy, stamps, airport and seaport charges, road fund and petroleum levy. Note: the BoT chart labels grants at 105.6bn for August 2026, while the text gives total resources of 251.3bn, which implies grants of about 53.3bn; we use the text figure.

Government expenditure was TZS 459.0bn, 73.3% for development projects. That is 10.3% above the revised estimate and 49.0% above August 2025 (TICGL calc.). Development spending (TZS 336.3bn) was 2.4 times its August 2025 level, while other recurrent spending fell 46.5%.

Expenditure, August

TZS billion

Spending Composition, Aug 2026

Share of TZS 459.0bn

Expenditure (TZS bn)	Aug-25	2026 est.	Aug-26	y/y
Wages and salaries	65.8	68.1	68.0	+3.3%
Other recurrent	102.2	62.0	54.7	-46.5%
Development	140.1	286.1	336.3	+140.0%
Total	308.1	416.2	459.0	+49.0%

Read alongside the mainland fiscal analysis

Compare Zanzibar's budget structure with the mainland's FY2025/26 revenue and spending outturn.

Central Government Revenue & Expenditure →

04 - EXTERNAL SECTORA Tourism-Powered Surplus

The current account surplus widened 19.3% to US$953.7m in the year to August 2026, from US$799.3m, on higher service receipts that benefited from more visitors and lower service payments. Exports of goods and services rose 18.8% to US$1,847.0m (services receipts are 96.2% of that, TICGL calc.), while imports rose 40.4% to US$909.5m.

Current Account Components, Year Ending August

US$ million

US$ million	Aug-25	Jul-26	Aug-26	2025	2026p	Change
Goods account	-47.7	-55.9	-56.1	-514.2	-769.8	49.7%
Services account	182.8	191.0	221.4	1,420.3	1,707.2	20.2%
Service receipts	191.8	196.0	226.3	1,521.6	1,777.8	16.8%
Service payments	9.1	5.0	5.0	101.3	70.5	-30.3%
Goods & services (net)	135.1	133.7	163.5	789.1	935.6	18.6%
Exports of goods & services	193.6	199.4	228.2	1,554.2	1,847.0	18.8%
Imports of goods & services	58.6	64.2	63.0	648.0	909.5	40.4%
Primary income (net)	0.2	2.2	2.6	9.1	14.6	59.9%
Secondary income (net)	0.0	0.7	0.9	1.0	3.5	>100%
Current account balance	135.3	136.6	166.9	799.3	953.7	19.3%

Monthly: exports of goods and services USD 228.2m in August 2026 versus 193.6m a year earlier (+17.9%); monthly current account surplus US$166.9m versus 135.3m (+23.4%), TICGL calc.

05 - EXPORTSGoods Exports: A Clove-Driven Doubling

Goods exports more than doubled to US$69.2m. Cloves alone earned US$42.5m (versus US$3.6m), with volumes up from 0.8 to 7.2 thousand tonnes and unit prices up 27% to US$5,936.7 per tonne. Clove output is known to swing sharply between seasons, so this should be read as a rebound, not a trend. Non-traditional exports fell 7.9%: seaweed dropped 57.4% and manufactured goods 33.2%, offset by fish (+44.1%) and other exports (+62.8%).

Goods Exports, Year to Aug 2026

US$ million, total 69.2

Export (US$ '000)	2025	2026p
Cloves	3,574.0	42,494.6
Seaweed	3,079.7	1,311.4
Manufactured goods	17,329.0	11,574.6
Fish & fish products	730.5	1,052.5
Other exports	7,834.1	12,756.9
Grand total	32,547.3	69,190.0

Services dominate: transport and travel receipts are the engine of the economy, supported by increased visitor arrivals through 2026 (BoT).

06 - IMPORTSImports: Investment-Led, Not Consumption-Led

Goods imports (fob) rose 53.4% to US$839.0m, led by capital goods (US$224.2m, 3.1 times last year) and industrial supplies (+84.1%), notably iron and steel (US$76.1m). Capital goods are 26.7% of imports, intermediate 59.7% and consumer goods 13.6% (TICGL calc.). Fuel imports fell 17.7%.

Goods Imports by Category, Year Ending August

US$ million

Imports (US$ m)	2025	2026p	Change
Capital goods	71.8	224.2	>100%
Machinery & mechanical appliances	28.3	81.5	>100%
Industrial transport equipment	23.0	76.2	>100%
Electrical machinery	13.5	49.3	>100%
Intermediate goods	403.3	500.5	24.1%
Industrial supplies	135.4	249.3	84.1%
Fuel and lubricants	146.8	120.9	-17.7%
Food & beverages (industrial use)	82.8	59.8	-27.9%
Consumer goods	71.7	114.3	59.4%
Total imports (fob)	546.8	839.0	53.4%

07 - CONTEXTZanzibar vs Mainland

Indicator (Aug 2026)	Zanzibar	Mainland
Headline inflation	5.6%	4.3%
Food inflation	9.8%	3.7%
Food weight in CPI	41.9%	28.2%
Current account (12m)	+US$953.7m	-US$2,481.8m
Exports of goods & services (12m)	US$1,847.0m	US$20,216.2m
Imports of goods & services (12m)	US$909.5m (+40.4%)	US$21,269.2m (+21.4%)

Zanzibar's exports are about 9.1% of the mainland's (TICGL calc.), yet it runs a surplus where the mainland runs a deficit, reflecting its tourism-based service economy.

08 - OUTLOOKRisks and Recommendations

Pressure points

Food price exposure: food is 41.9% of the CPI and 9.8% inflation; a strong El Niño into early 2027 and rice imports from the mainland keep risk elevated.
Fiscal gap: spending was 1.8 times resources in August; tax collection reached only 88.7% of target.
Single-crop and single-sector concentration: cloves are 61% of goods exports and tourism almost all service receipts.
Rising goods deficit: up 49.7% to US$769.8m as imports outpace exports.

Strengths

Current account surplus of US$953.7m, with services surplus 2.2 times the goods deficit (TICGL calc.).
Capital-goods imports tripled, signalling investment in capacity; development spending is 73% of the budget.
Monthly price level fell 0.2% and VAT and non-tax revenue beat targets.

Recommendations

Strengthen tax collection on income, import and hotel-related levies, where targets were missed.
Diversify exports beyond cloves: seaweed, fish and processed goods recovery plans.
Secure food supply chains and buffer stocks to contain rice, sugar and fish price pressures.
Anchor development spending in projects with measurable returns, since donor support cannot fill the gap indefinitely.

"Zanzibar earns its dollars from visitors and spends its shillings on building. The question is whether tomorrow's tax base grows fast enough to carry what today's grants are paying for."

- TICGL / Tanzania Economic Research Institute (TERI)

09 - FAQFrequently Asked Questions

What was Zanzibar's inflation in August 2026?

5.6% (July: 6.0%; August 2025: 3.9%), with food at 9.8% and non-food at 2.2%.

How big is Zanzibar's current account surplus?

US$953.7 million in the year to August 2026, up 19.3%, driven by tourism-related service receipts.

Why did goods exports more than double?

Cloves rose to US$42.5 million (about 61% of goods exports) on higher volumes and prices.

How did government finances look in August 2026?

Resources TZS 251.3bn (+10.4% vs target) against spending of TZS 459.0bn, 73.3% on development.

Method & sources

Built from BoT Monthly Economic Review, September 2026: Sections 3.1-3.3, Charts 3.2.1-3.2.2 and Tables 3.1.1, 3.3.1-3.3.3 (Office of the Chief Government Statistician, Ministry of Finance and Planning Zanzibar, TRA, and BoT computations). The grants figure for August 2026 is derived from reported total resources because chart and text differ.

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Muhtasari kwa Kiswahili

Utendaji wa Uchumi wa Zanzibar, Agosti 2026 - Mfumuko wa bei ulipungua hadi asilimia 5.6 kutoka 6.0 Julai, lakini bado uko juu ya asilimia 3.9 ya Agosti 2025, ukichochewa na bei za chakula (asilimia 9.8). Ziada ya akaunti ya sasa iliongezeka kwa asilimia 19.3 hadi Dola milioni 953.7.

Bajeti: Rasilimali za serikali zilikuwa TZS bilioni 251.3 (asilimia 10.4 juu ya lengo, kutokana na msaada wa Benki ya Dunia). Matumizi yalikuwa TZS bilioni 459.0, asilimia 73.3 kwa miradi ya maendeleo. Mapato ya kodi yalifikia asilimia 88.7 tu ya lengo.

Sekta ya nje: Mauzo ya bidhaa yalifikia Dola milioni 69.2, na karafuu pekee zikichangia Dola milioni 42.5 (asilimia 61). Mapato ya huduma, hasa utalii, yalikuwa Dola milioni 1,777.8. Uagizaji wa bidhaa za mtaji uliongezeka mara 3.1.

Hatari: Bei za chakula, pengo la bajeti, utegemezi wa karafuu na utalii, na nakisi ya akaunti ya bidhaa (Dola milioni 769.8).

Mapendekezo: Kuimarisha ukusanyaji wa kodi, kuongeza aina za mauzo ya nje, kulinda usambazaji wa chakula, na kuelekeza matumizi kwenye miradi yenye tija.

Chanzo: Benki Kuu ya Tanzania, Monthly Economic Review, Septemba 2026. Mawasiliano: economist@ticgl.com.

Disclaimer & scope

Prepared by TERI for research and strategic-information purposes only; it is not investment, legal, tax or financial advice. Figures come from the Bank of Tanzania's Monthly Economic Review (September 2026). Real rates and spreads marked "TERI calculation" are derived from published figures. Preliminary data for August 2026 may be revised.

01 — OverviewExecutive Summary

Banks' lending and deposit rates were largely unchanged in August 2026. The overall lending rate eased to 15.05% from 15.10%, negotiated lending rates for prime borrowers fell to 11.93% from 12.04%, the overall time deposit rate stayed at 8.78%, and negotiated deposit rates edged up to 11.06% from 10.99%. The spread between the up-to-one-year lending rate and the 12-month deposit rate narrowed to 5.95 percentage points from 6.20.

Prime borrowers

11.93%

Negotiated lending rate, from 12.04%

Credit growth

33.0%

Private sector credit, from 31.2% in July

Real lending rate

10.75%

15.05% less 4.3% inflation (TERI calculation)

The central finding

Policy tightening has not yet reached the loan book. The CBR is 6.25%, the Treasury bill yield is 4.86% and the 25-year bond yield is 11.48%, but borrowers still pay about 15%, roughly 8.8 percentage points above the policy rate (TERI calculation). Price of credit in Tanzania is set more by bank risk premia and funding structure than by the policy rate, which is why credit grew 33.0% despite a "less accommodative" stance.

1. The Policy Anchor: CBR, Corridor and Interbank Rates

The Monetary Policy Committee raised the CBR to 6.25% in July 2026 to contain second-round inflation from higher energy, fertiliser and transport costs linked to the Middle East conflict. The 7-day interbank rate is managed within a corridor of 4.75% to 7.75%. The overall interbank cash market rate averaged 6.67% in August, up from 6.57% in July.

Policy & money-market rate	Aug 2025	Jun 2026	Jul 2026	Aug 2026
REPO rate	5.30%	5.75%	6.25%	6.25%
Lombard rate	7.75%	7.25%	7.75%	7.75%
Discount rate	8.25%	8.25%	8.75%	8.75%
Overall interbank cash market rate	6.48%	6.00%	6.57%	6.67%
Overall Treasury bill rate	6.83%	4.83%	4.74%	4.86%

Policy Rate vs Interbank vs Treasury Bill Rate

Percent, Aug 2025 – Aug 2026

02 — Cost of CreditLending Rates: Sticky Near 15%

The overall lending rate has stayed in a narrow 15.05%–15.33% band for twelve months, peaking at 15.33% in April 2026. Prime borrowers, who negotiate, pay about 3 percentage points less (11.93%). Short-term (up to one year) loans were 15.31%, down from 15.54% in July.

Lending Rate Trends

Percent, Aug 2025 – Aug 2026

2.1 Lending rates by maturity

Maturity (TZS loans)	Aug 2025	Jul 2026	Aug 2026	Change y/y
Short-term (up to 1 year)	15.64%	15.54%	15.31%	−0.33pp
Medium-term (1–2 years)	16.45%	16.51%	16.53%	+0.08pp
Medium-term (2–3 years)	15.01%	15.11%	15.02%	+0.01pp
Long-term (3–5 years)	14.02%	14.44%	14.44%	+0.42pp
Term loans (over 5 years)	14.22%	13.92%	13.93%	−0.29pp
Overall lending rate	15.07%	15.10%	15.05%	−0.02pp
Negotiated lending rate	12.72%	12.04%	11.93%	−0.79pp

Lending Rate by Maturity

Percent, August 2025 vs August 2026

2.2 Credit demand is not rate-sensitive

Credit to the private sector expanded 33.0% in the year to August (31.2% in July), reaching TZS 55,229.9 billion. Annual growth was led by transport and communication (77.2%), mining and quarrying (75.9%), trade (47.1%), building and construction (41.8%) and agriculture (38.4%). Personal loans remain the largest share of bank portfolios at 34.1%, followed by trade and agriculture.

Sector	Aug 2025	Jun 2026	Jul 2026	Aug 2026
Transport & communication	18.8%	59.5%	66.0%	77.2%
Mining & quarrying	3.2%	39.9%	65.2%	75.9%
Trade	29.2%	46.4%	43.5%	47.1%
Building & construction	14.8%	34.4%	38.9%	41.8%
Agriculture	30.1%	30.1%	37.3%	38.4%
Personal	15.0%	21.8%	24.7%	24.9%
Hotels & restaurants	11.4%	0.9%	25.1%	24.6%
Manufacturing	3.4%	8.3%	5.1%	12.9%

Source: Bank of Tanzania, Table 2.2.2. Manufacturing credit grew only 12.9%, well below the 33.0% aggregate.

03 — Return on SavingsDeposit Rates: Time Deposits Edge Higher

The overall time deposit rate was 8.78% in July and August 2026, up from 8.33% in January. Negotiated deposits, mostly large and institutional, earned 11.06%. Ordinary savings deposits paid just 2.77%, the lowest in the series and below inflation of 4.3%.

Deposit Rate Trends

Percent, Aug 2025 – Aug 2026

Deposit tenor	Aug 2025	Jul 2026	Aug 2026
Savings deposit	2.90%	2.90%	2.77%
1 month	10.70%	9.51%	9.41%
3 months	8.59%	9.61%	9.74%
6 months	10.44%	10.54%	10.56%
12 months	9.99%	9.34%	9.36%
24 months	7.16%	7.91%	7.97%
Overall time deposit	8.61%	8.78%	8.78%
Negotiated deposit	10.99%	10.99%	11.06%

Deposit Rate by Tenor

Percent, August 2025 vs August 2026

3.1 Foreign-currency deposits and loans

In foreign currency, the overall time deposit rate was 4.12% (4.11% a year earlier), savings rates rose to 1.80% from 0.93%, and the 12-month rate reached 5.31%. FX lending averaged 8.96% (8.59% a year earlier), with short-term FX loans at 10.03%. FX deposits stood at USD 6,077.7 million, or TZS 16,043.5 billion.

04 — IntermediationSpreads and Real Interest Rates

The short-term interest spread narrowed to 5.95 percentage points in August from 6.20 in July. It has ranged between 5.22 and 6.20 points since January 2026.

Short-Term Interest Spread

Percentage points, Jan – Aug 2026

Indicator (August 2026)	Nominal	Real (less 4.3% inflation)
Overall lending rate	15.05%	10.75%
Negotiated lending rate	11.93%	7.63%
12-month deposit rate	9.36%	5.06%
Overall time deposit rate	8.78%	4.48%
Savings deposit rate	2.77%	−1.53%
Treasury bill rate	4.86%	0.56%

Real rates are TERI calculations using headline inflation of 4.3% (August 2026); core inflation is 4.1%. Rates are not directly comparable across instruments of different risk.

Watch the inflation turn

Core inflation has risen steadily since March 2026 to 4.1%, and services inflation reached 5.9%. If inflation drifts toward the 5% ceiling of the 3–5% target, real returns on savings narrow and the case for further tightening strengthens.

05 — Market BenchmarksThe Government Yield Curve

Government securities auctions were oversubscribed. Treasury bills drew bids of TZS 981.7 billion against TZS 580 billion offered (bid-to-cover 1.7); the 15- and 25-year bonds drew TZS 2,136.3 billion against TZS 621.5 billion (bid-to-cover 3.4). The 25-year yield fell to 11.48% from 11.89%, while the 15-year yield edged up to 10.55%.

Government Bond Yields by Maturity

Percent, August 2025 vs August 2026

Long yields (up to 11.48%) are far below the 12-month deposit rate paths of 2025 and roughly in line with prime lending at 11.93%. For banks, government paper at 9.5%–11.5% offers a low-risk alternative to lending at about 15%, with securities held by banks at TZS 11,718.3 billion.

06 — AnalysisWhat This Means

Borrowers: expect little relief near term. Prime and well-collateralised borrowers can negotiate close to 12%; SMEs and personal borrowers face rates above 15%.
Savers: time deposits at 8.78%–10.56% beat inflation, but savings accounts at 2.77% lose value in real terms.
Banks: the 5.95 point spread plus high yields on long government bonds support margins, but external arrears and net foreign assets of other depository corporations turned negative at TZS −155.5 billion.
Investors and project sponsors: a TZS financing cost near 15% versus 8.96% in foreign currency creates exchange-rate exposure; the shilling depreciated 6.7% y/y to TZS 2,657.01 per USD.

Key risks

Oil and fertiliser prices from the Middle East conflict could force further CBR increases.
A strengthening El Niño threatens food prices and inflation into early 2027.
Rapid credit growth of 33.0% could build asset-quality risk if rates rise.

07 — RecommendationsPolicy and Business Recommendations

1. Strengthen transmission

Publish bank-level lending rate and spread data regularly to increase competition.
Monitor whether the July CBR rise feeds into loan pricing in coming months.

2. Reduce risk premia

Expand credit-reference coverage and collateral registries for SMEs.
Scale up credit guarantee schemes for manufacturing and agriculture.

3. Protect small savers

Encourage banks to offer inflation-competitive savings products.
Promote retail access to Treasury bonds.

4. Plan financing carefully

Businesses should compare TZS and FX financing on a hedged, all-in basis.
Negotiate rates using audited accounts and security; prime-borrower pricing is about 3 points lower.

"A policy rate of 6.25% and a lending rate of 15.05% describe two different economies. Until risk premia, collateral systems and bank competition change, the central bank moves one rate while borrowers face another."

— TICGL / Tanzania Economic Research Institute (TERI)

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08 — Quick AnswersFrequently Asked Questions

What was Tanzania's overall lending rate in August 2026?

15.05%, down from 15.10% in July. Negotiated lending rates for prime borrowers fell to 11.93%.

What are Tanzania's deposit rates?

The overall time deposit rate was 8.78%, the 12-month rate 9.36%, negotiated deposits 11.06% and savings deposits 2.77%.

What is the Central Bank Rate?

6.25% since July 2026, with a corridor of 4.75% to 7.75%.

What is the interest rate spread?

5.95 percentage points between up-to-one-year lending and 12-month deposit rates, down from 6.20.

Method & Source Note

Built directly from the Bank of Tanzania Monthly Economic Review, September 2026: Section 2.2 (Monetary Policy), 2.3 (Interest Rates), 2.4 (Financial Markets), Tables 2.2.2, 2.3.1, A3 and A4. Real rates, y/y changes in rates and the policy-lending gap are TERI calculations.

Muhtasari kwa Kiswahili

Viwango vya Riba ya Mikopo na Amana Tanzania, Agosti 2026 — Kiwango cha jumla cha riba ya mikopo kilishuka kidogo hadi asilimia 15.05 kutoka 15.10, na riba kwa wakopaji wakubwa (negotiated) ilishuka hadi 11.93%. Riba ya jumla ya amana za muda ilibaki 8.78%, na amana za mazungumzo zilipanda hadi 11.06%.

Sera ya fedha: Benki Kuu iliongeza Kiwango cha Riba cha Benki Kuu (CBR) hadi 6.25% Julai 2026, lakini riba za mikopo za benki bado ziko karibu 15%. Mikopo kwa sekta binafsi ilikua 33.0%.

Tofauti ya riba (spread): Pengo kati ya riba ya mikopo ya hadi mwaka mmoja na amana ya miezi 12 lilipungua hadi pointi 5.95 kutoka 6.20.

Riba halisi: Kwa mfumuko wa bei wa 4.3%, riba halisi ya mikopo ni takriban 10.75%, amana za muda 4.48%, na akiba ya kawaida (2.77%) inapoteza thamani.

Hatari: Bei za mafuta, mbolea na El Niño zinaweza kuongeza mfumuko wa bei na kulazimisha ongezeko zaidi la CBR.

CBR: 6.25% | Mikopo: 15.05% | Amana za muda: 8.78%
Spread: pointi 5.95 | Mikopo ya sekta binafsi: +33.0%
Mavuno ya hati fungani ya miaka 25: 11.48%

Chanzo: Benki Kuu ya Tanzania, Monthly Economic Review, Septemba 2026. Maelezo zaidi: economist@ticgl.com.

Disclaimer & scope

Prepared by TERI for research and strategic-information purposes only; it is not investment, legal, tax or financial advice. Figures are from the Bank of Tanzania; August 2026 data are provisional and July 2026 is revised. Growth rates, shares of arrears and exchange-rate effects marked "TERI calculation" are derived from published figures. Tables 2.6.3 and 2.6.4 cover disbursed outstanding debt (DOD) of USD 36,422.5 million, which excludes USD 309.0 million of interest arrears.

01 — OverviewExecutive Summary

The stock of national debt rose 1.7% month on month to USD 52,224.4 million at end-August 2026, with external debt accounting for 70.3%. The external component, public and private, stood at USD 36,731.5 million, up 0.8% from July. During August, external loan disbursements were USD 160.1 million, mostly to the central government, and debt service was USD 139.1 million, of which USD 69.2 million was principal. Multilaterals hold 59.5% of the stock, commercial lenders 34.4%, bilateral creditors 4.3% and export credit agencies 1.8%.

Stock growth y/y

+8.2%

USD 33,940.1m to 36,731.5m (TERI calculation)

Private sector debt

+15.2%

Faster than central government's +7.0% (TERI calculation)

Interest arrears

$1,040.0M

Up from $578.9m in Aug 2025; 2.8% of stock (TERI calculation)

The central finding

The debt is concentrated, concessional-heavy and dollar-linked. Four-fifths is sovereign, nearly 60% is multilateral, and 64.9% is in US dollars. That structure is manageable while the shilling is stable, but the shilling depreciated 6.7% against the dollar over the year, and the fastest growth is in private-sector borrowing and in arrears, where oversight is weakest.

1. External Debt Stock by Borrower

The central government owed USD 30,751.9 million (83.7%) at end-August 2026, the private sector USD 5,979.6 million (16.3%), and public corporations nothing: TANESCO, ATCL, TRC, TPA, TFC and DAWASA have no outstanding external debt. The private sector's share has crept up from 15.3% a year earlier.

Borrower (USD million)	Aug 2025	Share	Jul 2026	Aug 2026	Share	y/y
Central government	28,745.9	84.7%	30,512.1	30,751.9	83.7%	+7.0%
Disbursed outstanding debt	28,667.2	84.5%	30,431.6	30,671.3	83.5%	+7.0%
Interest arrears	78.7	0.2%	80.5	80.6	0.2%	+2.4%
Private sector	5,192.9	15.3%	5,942.2	5,979.6	16.3%	+15.2%
Disbursed outstanding debt	5,088.1	15.0%	5,732.0	5,751.2	15.7%	+13.0%
Interest arrears	104.8	0.3%	210.2	228.4	0.6%	+118.0%
Public corporations	1.3	0.0%	0.0	0.0	0.0%	—
External debt stock	33,940.1	100%	36,454.3	36,731.5	100%	+8.2%

Source: Bank of Tanzania, Table 2.6.1. Year-on-year changes are TERI calculations.

External Debt Stock

USD million (disbursed outstanding debt by borrower)

Interest Arrears

USD million, total external debt arrears

Private-sector arrears are doubling

Private-sector interest arrears reached USD 228.4 million, up from USD 104.8 million a year earlier, equal to 3.8% of private external debt compared with 0.26% for central government (TERI calculation). Total external debt arrears rose to USD 1,040.0 million, with commercial creditors owed USD 417.8 million in principal and USD 163.8 million in interest.

1.1 Creditor structure

Creditor (USD million)	Aug 2025	Share	Aug 2026	Share
Multilateral	20,014.9	59.0%	21,867.4	59.5%
Commercial	11,694.9	34.5%	12,633.7	34.4%
Bilateral	1,557.5	4.6%	1,568.2	4.3%
Export credit	672.8	2.0%	662.1	1.8%

02 — Use of FundsWhat the Borrowing Financed

Balance of payments and budget support is the largest use of disbursed outstanding debt at 23.6%, followed by transport and telecommunications (21.8%), social welfare and education (19.3%) and energy and mining (12.6%). Together these four account for 77.3% of DOD. The composition was broadly unchanged from July.

Use of funds	Share Aug 2025	Share Jul 2026	Share Aug 2026	Aug 2025 $M	Aug 2026 $M	y/y
BoP and budget support	23.2%	23.6%	23.6%	7,834.4	8,582.7	+9.6%
Transport and telecommunication	21.0%	21.6%	21.8%	7,096.1	7,930.4	+11.8%
Social welfare and education	19.9%	19.3%	19.3%	6,711.7	7,014.7	+4.5%
Energy and mining	11.9%	12.7%	12.6%	4,026.5	4,600.1	+14.2%
Agriculture	5.1%	5.2%	5.2%	1,722.6	1,903.6	+10.5%
Real estate and construction	5.5%	4.8%	4.7%	1,844.6	1,727.8	−6.3%
Finance and insurance	3.6%	4.2%	4.2%	1,212.7	1,525.3	+25.8%
Industries	2.9%	2.6%	2.7%	992.2	966.9	−2.5%
Tourism	1.8%	1.6%	1.6%	597.1	598.0	+0.2%
Other	5.1%	4.3%	4.3%	1,718.7	1,573.0	−8.5%
Total DOD	100.0%	100.0%	100.0%	33,756.6	36,422.5	+7.9%

Sources: Bank of Tanzania, Table 2.6.3 (shares) and Table A10 (amounts). Year-on-year changes are TERI calculations.

Share of DOD by Use of Funds

Percent, Aug 2025 vs Aug 2026

Growth in DOD by Use of Funds

Percent change, Aug 2025 to Aug 2026 (TERI calculation)

Growth is fastest in finance and insurance (+25.8%) and energy and mining (+14.2%), reflecting private-sector and project borrowing.
Productive sectors are small: agriculture and industries together are only 7.9% of DOD, although agriculture employs most Tanzanians.
Budget support rose faster than education and social welfare, raising the share of debt that finances recurrent needs rather than assets that generate foreign exchange.

03 — Currency CompositionWhich Currencies the Debt Is Owed In

The US dollar accounts for 64.9% of disbursed outstanding external debt, down from 65.4% a year earlier. The euro's share rose to 18.4% from 17.9%, the Chinese yuan holds 6.7% and other currencies 10.0%.

Currency	Share Aug 2025	Share Jul 2026	Share Aug 2026	Aug 2025 $M	Aug 2026 $M	y/y
United States dollar	65.4%	65.1%	64.9%	22,090.5	23,632.6	+7.0%
Euro	17.9%	18.2%	18.4%	6,045.9	6,696.7	+10.8%
Chinese yuan	6.6%	6.7%	6.7%	2,218.0	2,452.7	+10.6%
Other	10.1%	10.0%	10.0%	3,402.0	3,640.5	+7.0%
Total DOD	100.0%	100.0%	100.0%	33,756.6	36,422.5	+7.9%

Sources: Bank of Tanzania, Table 2.6.4 and Table A10. Year-on-year changes are TERI calculations.

Currency Composition, August 2026

Percent of disbursed outstanding debt

Debt by Currency

USD million, Aug 2025 – Aug 2026

Exchange-rate exposure

The end-of-period rate moved from TZS 2,463.3 to TZS 2,639.9 per USD over the year, a 7.2% depreciation (TERI calculation). On a dollar-linked stock of USD 23,632.6 million, that adds roughly TZS 4.2 trillion to the shilling value of the dollar debt alone, before euro and yuan effects. Gross official reserves of USD 5,888.2 million cover 4.2 months of imports.

04 — AnalysisRisks and Strengths

Strength, concessional mix: with 59.5% multilateral, much of the stock should carry long maturities and lower rates than commercial debt.
Strength, no public-corporation debt: central government control limits hidden contingent liabilities from state enterprises.

Key risks

Dollar dependence: 64.9% of DOD is in USD, so depreciation or a strong dollar raises the shilling cost of servicing.
Commercial debt of USD 12,633.7 million (34.4%) is costlier and arrears to commercial creditors are growing fastest.
A rising share of budget support means more borrowing finances consumption, not export-generating assets.
Higher oil and freight costs are widening the current account deficit to USD 2,481.8 million, tightening foreign-exchange availability.

Undisbursed commitments fell to USD 15,302.9 million from USD 18,855.9 million a year ago, so total committed external debt is USD 51,725.3 million, and the pipeline for new disbursements is shrinking even as the stock rises.

05 — RecommendationsPolicy Recommendations

1. Manage currency risk

Raise the share of shilling and concessional multi-currency borrowing.
Publish a hedging and currency-risk strategy within the medium-term debt strategy.

2. Align borrowing with productive use

Prioritise projects that earn foreign exchange, such as agriculture, energy and industry.
Publish project-level use-of-funds reports.

3. Clear and monitor arrears

Set a plan to clear commercial arrears of USD 581.6 million (principal and interest).
Strengthen oversight of private external borrowing and its reporting.

4. Plan for investors and lenders

Investors should weigh sovereign exposure and FX conditions when pricing Tanzania risk.
Project sponsors should match revenue currency to debt currency.

"Debt that is 84% sovereign, 60% multilateral and 65% in dollars is a sound structure only as long as the shilling holds and the borrowing builds assets that earn dollars. The composition tells us where the risk sits."

— TICGL / Tanzania Economic Research Institute (TERI)

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06 — Quick AnswersFrequently Asked Questions

How large is Tanzania's external debt?

USD 36,731.5 million at end-August 2026, up 0.8% from July and 8.2% from a year earlier.

Which currencies is the debt in?

US dollar 64.9%, euro 18.4%, Chinese yuan 6.7% and other currencies 10.0%.

What was the borrowing used for?

Balance of payments and budget support 23.6%, transport and telecommunications 21.8%, social welfare and education 19.3%, energy and mining 12.6%.

Who owes the debt?

Central government 83.7% (USD 30,751.9m) and private sector 16.3% (USD 5,979.6m).

Method & Source Note

Built from the Bank of Tanzania Monthly Economic Review, September 2026: Section 2.6, Tables 2.6.1 to 2.6.4 and Table A10. Y/Y growth rates, arrears ratios and the exchange-rate effect are TERI calculations; the exchange-rate effect is illustrative and ignores hedges and repayment timing.

Muhtasari kwa Kiswahili

Deni la Nje la Tanzania, Agosti 2026 — Deni la nje (sekta ya umma na binafsi) lilifikia Dola milioni 36,731.5 mwishoni mwa Agosti 2026, ongezeko la 0.8% kutoka Julai na 8.2% kwa mwaka. Serikali Kuu inadaiwa 83.7% na sekta binafsi 16.3%; mashirika ya umma hayana deni la nje.

Matumizi ya mikopo: Msaada wa urari wa malipo na bajeti 23.6%, usafirishaji na mawasiliano 21.8%, huduma za jamii na elimu 19.3%, nishati na madini 12.6%. Kilimo ni 5.2% tu.

Sarafu: Dola ya Marekani 64.9%, Euro 18.4%, Yuan ya China 6.7%, nyingine 10.0%. Shilingi ilishuka thamani takriban 7.2% kwa mwaka (hesabu za TERI), hivyo gharama ya kulipa deni la dola imeongezeka.

Hatari: Madeni ya riba yaliyochelewa yamefikia Dola milioni 1,040.0 (kutoka 578.9), na ya sekta binafsi yameongezeka mara mbili. Wakopeshaji wa kibiashara wanamiliki 34.4% ya deni.

Mapendekezo: Kupunguza hatari ya sarafu, kuelekeza mikopo kwenye miradi inayozalisha fedha za kigeni, kulipa malimbikizo, na kusimamia mikopo ya sekta binafsi.

Deni la nje: $36,731.5M | Serikali Kuu: 83.7%
Dola: 64.9% | Wakopeshaji wa pande nyingi: 59.5%
Malimbikizo: $1,040.0M

Chanzo: Benki Kuu ya Tanzania, Monthly Economic Review, Septemba 2026. Maelezo zaidi: economist@ticgl.com.

Disclaimer & scope

Prepared by TERI for research and strategic-information purposes only; it is not investment, legal, tax or financial advice. Figures are from the Bank of Tanzania and the Ministry of Finance; August 2026 data are provisional. Growth rates, contributions and shares combined across categories are TERI calculations from published figures. The "others" category includes public institutions, private companies, individuals and non-residents, and is not broken down further in the source.

01 — OverviewExecutive Summary

The Government's domestic debt stock increased by 3.6% during August 2026 to TZS 40,899.5 billion, driven mainly by Treasury bond issuance. Over six years the stock has grown from TZS 15,163.3 billion in August 2020, a 2.7-fold rise, or about 18% a year (TERI calculation). Commercial banks and pension funds continue to hold the largest shares.

Growth y/y

+9.6%

TZS 37,309.8bn to 40,899.5bn (TERI calculation)

Pension funds, m/m

+TZS 801.1bn

56% of the month's increase (TERI calculation)

Bond share of stock

85.1%

Treasury bonds, from 79.9% a year earlier

The central finding

Domestic debt is increasingly a pension-fund and "others" story. Of the TZS 1,427.3 billion added in August, pension funds supplied TZS 801.1 billion and "others" TZS 241.8 billion, while commercial banks added only TZS 148.7 billion. Over the year the fastest-growing holders were "others" (+18.5%) and pension funds (+11.6%), while the Bank of Tanzania's holdings were flat. (All TERI calculations.)

1. Government Domestic Debt by Creditor Category

Creditor (TZS billion)	Aug 2025	Share	Jul 2026	Share	Aug 2026	Share	y/y
Commercial banks	10,558.3	28.3%	11,450.6	29.0%	11,599.3	28.4%	+9.9%
Pension funds	10,116.5	27.1%	10,491.4	26.6%	11,292.5	27.6%	+11.6%
Bank of Tanzania	7,052.2	18.9%	6,819.7	17.3%	7,054.9	17.2%	+0.0%
Insurance	2,001.9	5.4%	2,063.0	5.2%	2,050.4	5.0%	+2.4%
BoT special funds	799.3	2.1%	854.6	2.2%	867.6	2.1%	+8.5%
Others	6,781.7	18.2%	7,792.9	19.7%	8,034.7	19.6%	+18.5%
Domestic debt stock	37,309.8	100%	39,472.2	100%	40,899.5	100%	+9.6%

Source: Bank of Tanzania, Table 2.6.6; shares as published and may not sum to exactly 100%. Year-on-year changes are TERI calculations.

Creditor Shares, August 2026

Percent of domestic debt stock

Holdings by Creditor

TZS billion, Aug 2025 vs Aug 2026

1.1 What each creditor group tells us

Commercial banks (28.4%): the largest holder. Banks held TZS 11,718.3 billion in securities in August, up 40.3% y/y, even as credit to the private sector grew 33.0%.
Pension funds (27.6%): long-horizon investors anchoring demand for 15- to 25-year bonds. Their share rose from 27.1% a year ago.
Bank of Tanzania (17.2%): down from 18.9% in share terms; holdings were unchanged at about TZS 7,053 billion over the year.
Insurance (5.0%) and BoT special funds (2.1%): small, slow-growing holders.
Others (19.6%): the fastest-growing group at +18.5% y/y, covering public institutions, private companies, individuals and non-residents.

02 — DriversWho Financed the August Increase?

Domestic debt rose TZS 1,427.3 billion between July and August 2026. The contribution by creditor shows how concentrated the financing was.

Creditor	Change m/m (TZS bn)	Growth m/m	Share of increase
Pension funds	+801.1	+7.6%	56.1%
Others	+241.8	+3.1%	16.9%
Bank of Tanzania	+235.2	+3.4%	16.5%
Commercial banks	+148.7	+1.3%	10.4%
BoT special funds	+13.0	+1.5%	0.9%
Insurance	−12.6	−0.6%	−0.9%
Total	+1,427.3	+3.6%	100%

Source: TERI calculations from Table 2.6.6.

Government Domestic Debt Stock

TZS billion, end-August each year and July 2026

Contribution to the August Increase

TZS billion, by creditor (TERI calculation)

The Bank of Tanzania's rising holdings

The BoT's holdings rose TZS 235.2 billion in the month after falling in prior months, and overdraft rose to TZS 4,176.9 billion from TZS 3,941.6 billion (10.2% of the stock). The source does not state the creditor of the overdraft, so the link to central bank financing should be confirmed against the Ministry of Finance data.

03 — InstrumentsHow the Debt Is Structured

Government securities are 89.8% of the stock. Treasury bonds alone are TZS 34,793.4 billion (85.1%), up from 79.9% a year ago, while Treasury bills have fallen to 4.4% from 5.6%. Non-securitised debt, which is the overdraft, declined from 14.1% to 10.2% of the stock over the year, shifting financing toward longer-dated market instruments.

Instrument (TZS billion)	Aug 2025	Share	Jul 2026	Aug 2026	Share
Government securities	32,048.0	85.8%	35,530.5	36,722.5	89.8%
Treasury bonds	29,836.5	79.9%	33,615.9	34,793.4	85.1%
Treasury bills	2,075.7	5.6%	1,778.7	1,793.4	4.4%
Government stocks	135.7	0.4%	135.7	135.7	0.3%
Non-securitised debt (overdraft)	5,261.8	14.2%	3,941.7	4,176.9	10.2%
Domestic debt stock	37,309.8	100%	39,472.2	40,899.5	100%

Source: Bank of Tanzania, Table 2.6.5. Non-securitised debt includes overdraft (TZS 5,243.4bn in Aug 2025) and minor other liabilities.

Instrument Shares of Domestic Debt

Percent, Aug 2025 vs Jul 2026 vs Aug 2026

04 — Financing & ServiceIssuance, Auctions and Debt Service

In August 2026 the Government raised TZS 632.5 billion from the domestic market to finance development projects: TZS 178.1 billion in Treasury bills and TZS 454.4 billion in Treasury bonds. Domestic debt service amounted to TZS 633.4 billion, of which TZS 163.5 billion was principal and TZS 469.9 billion interest, so the month's financing was almost entirely consumed by servicing (TERI observation).

Government Securities Issued for Financing

TZS billion, Aug 2025 – Aug 2026

Auction results, August 2026	Tender (TZS bn)	Bids (TZS bn)	Bid-to-cover	Accepted (TZS bn)
Treasury bills (two auctions)	580.0	981.7	1.7	520.8
15- and 25-year bonds	621.5	2,136.3	3.4	595.4

Auction amounts include liquidity management and differ from the TZS 632.5bn issued for financing. The weighted average T-bill yield rose to 4.86% from 4.74%; the 25-year bond yield fell to 11.48% from 11.89% and the 15-year yield rose to 10.55% from 10.39%.

05 — AnalysisWhat the Creditor Mix Means

Crowding-out risk is limited so far: private credit grew 33.0%, faster than domestic debt at 9.6%, but banks' securities holdings grew 40.3%, so government paper competes for bank balance sheets.
Pension funds are structural buyers, supporting long maturities. Their growing role ties public debt to workers' retirement savings, so debt sustainability matters for pensioners.
Demand is strong: a bond bid-to-cover of 3.4 shows investors can absorb larger issuance without yield pressure.

Key risks

Interest costs: TZS 469.9 billion of interest in one month, with 10- to 25-year yields of 10.9% to 11.5%.
Concentration: banks and pension funds together hold 56.0%, so stress in either sector would transmit to government financing.
Rollover: 85.1% bond share means large future redemptions; the maturity profile is not in this report.

06 — RecommendationsPolicy Recommendations

1. Broaden the investor base

Expand retail and non-resident participation in government securities.
Publish a detailed breakdown of the "others" category (19.6%).

2. Protect private-sector credit

Monitor banks' securities holdings against lending to SMEs and manufacturing.
Pace bond issuance with the interest-rate cycle.

3. Manage rollover and cost

Publish the maturity profile and a redemption calendar.
Set limits on interest costs relative to revenue.

4. For investors and institutions

Pension funds and banks can use 25-year yields near 11.5% as a long-dated benchmark.
Project sponsors should expect domestic funding costs to track sovereign yields.

"Domestic debt is no longer just a banking-sector story. When pension funds fund more than half of a month's increase, public borrowing and retirement savings are the same conversation."

— TICGL / Tanzania Economic Research Institute (TERI)

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07 — Quick AnswersFrequently Asked Questions

How large is Tanzania's government domestic debt?

TZS 40,899.5 billion at end-August 2026, up 3.6% in the month and 9.6% in a year.

Who holds it?

Commercial banks 28.4%, pension funds 27.6%, Bank of Tanzania 17.2%, insurance 5.0%, BoT special funds 2.1%, others 19.6%.

Which instruments dominate?

Treasury bonds at 85.1%, Treasury bills at 4.4%, and overdraft at 10.2%.

What was the August debt service?

TZS 633.4 billion: TZS 163.5 billion principal and TZS 469.9 billion interest.

Method & Source Note

Built from the Bank of Tanzania Monthly Economic Review, September 2026: Section 2.6 (Domestic Debt), Charts 2.6.1 and 2.6.2, and Tables 2.6.5 and 2.6.6. Monthly issuance values are read from Chart 2.6.2. Y/Y growth, monthly contributions and 6-year growth are TERI calculations.

Muhtasari kwa Kiswahili

Deni la Ndani la Serikali kwa Kundi la Wakopeshaji, Agosti 2026 — Deni la ndani la Serikali lilifikia TZS bilioni 40,899.5 mwishoni mwa Agosti 2026, ongezeko la 3.6% ndani ya mwezi mmoja, likichochewa hasa na utoaji wa hati fungani za Hazina.

Wakopeshaji: Benki za biashara 28.4%, mifuko ya pensheni 27.6%, Benki Kuu 17.2%, bima 5.0%, mifuko maalum ya BoT 2.1%, na wengineo 19.6%.

Nani alichochea ongezeko: Mifuko ya pensheni iliongeza TZS bilioni 801.1, sawa na 56% ya ongezeko la mwezi (hesabu za TERI). Benki za biashara ziliongeza bilioni 148.7 tu.

Vyombo: Hati fungani ni 85.1% ya deni, hati za Hazina 4.4%, na overdraft 10.2%.

Huduma ya deni: Agosti ilikuwa TZS bilioni 633.4, ikiwa na mtaji bilioni 163.5 na riba bilioni 469.9. Hatari ni gharama za riba, mkusanyiko kwa benki na pensheni, na urejeshaji wa hati fungani.

Deni la ndani: TZS bilioni 40,899.5 | +9.6% y/y
Benki + Pensheni: 56.0% ya deni
Mahitaji ya hati fungani: bid-to-cover 3.4

Chanzo: Benki Kuu ya Tanzania, Monthly Economic Review, Septemba 2026. Maelezo zaidi: economist@ticgl.com.

Disclaimer & scope

Prepared by TERI for research and strategic-information purposes only; it is not investment, legal, tax or financial advice. Figures are from the Bank of Tanzania, Tanzania Revenue Authority and banks; 2026 data are provisional. Services balances by category, shares and growth rates marked "TERI calculation" are derived from published figures. Rounding differences of USD 0.1 million may occur.

01 — OverviewExecutive Summary

External-sector conditions remained sustainable, but the Middle East conflict and the resulting disruption to commodity and shipping markets weighed on performance. Higher costs of petroleum products and intermediate inputs pushed import growth above export growth, widening the trade deficit. Foreign-exchange reserves of USD 5,888.2 million, equal to 4.2 months of projected imports excluding FDI-related imports, remain above the national benchmark.

Goods trade deficit

$5,810.2M

+33.9% y/y; imports +24.1%, exports +19.8%

Services surplus

$4,757.2M

+13.4% y/y, offsetting 82% of the goods deficit (TERI calculation)

Export cover of imports

95.0%

Goods and services, from 99.2% a year earlier (TERI calculation)

The central finding

Tanzania's current account is a goods problem partly solved by services. Goods and services together moved from a USD 146.6 million deficit to USD 1,053.0 million, and the deterioration of USD 780.9 million in the current account came entirely from goods (−USD 1,469.9 million), partly offset by services (+USD 563.6 million) and a smaller primary income deficit (+USD 156.3 million). Within services, transport receipts grew fastest (+26.4%), while travel receipts grew only 1.7%. (All TERI calculations.)

1. The Current Account

USD million	Aug 2025	Jul 2026	Aug 2026	Yr to Aug 2024	Yr to Aug 2025	Yr to Aug 2026p	Change
Goods account	−327.7	−638.9	−478.0	−6,086.3	−4,340.3	−5,810.2	33.9%
Exports	1,032.4	1,116.8	1,080.1	8,055.2	9,981.2	11,960.8	19.8%
Imports	1,360.1	1,755.8	1,558.1	14,141.5	14,321.5	17,770.9	24.1%
Services account	454.5	563.0	627.1	4,127.4	4,193.6	4,757.2	13.4%
Goods and services	126.8	−75.9	149.2	−1,958.9	−146.6	−1,053.0	618.2%
Primary income	−176.3	−87.2	−111.3	−1,719.7	−2,026.5	−1,870.2	−7.7%
Secondary income	24.8	54.8	58.2	597.0	472.2	441.4	−6.5%
Current account balance	−24.7	−108.3	96.0	−3,081.6	−1,700.9	−2,481.8	45.9%

Source: Bank of Tanzania, Table 2.7.1. Exports include adjustments for informal cross-border trade. The August 2026 monthly balance was a USD 96.0 million surplus, a reversal from a USD 108.3 million deficit in July.

Current Account Components

USD million, years ending August

What Widened the Deficit

Change in balance, yr to Aug 2026 vs 2025, USD million (TERI calculation)

1.1 Longer view: annual current account

Current Account Balance, Calendar Years

USD million (2025 provisional)

Calendar-year deficits narrowed from USD 5,482.2 million in 2022 to USD 2,049.4 million in 2025 (2.2% of GDP), so the year to August 2026 marks a reversal of that improvement.

1.2 Drivers on the goods side

Exports: goods exports rose 19.8% to USD 11,960.8 million. Gold exports rose to USD 5,625.0 million from USD 4,321.5 million on higher prices and volumes, contributing nearly two-thirds of the increase; manufactured goods rose to USD 2,213.4 million; tobacco, tea and cotton also grew.
Imports: petroleum products rose 51.7% to USD 3,425.6 million, about one third of the increase in the goods import bill; capital goods rose to USD 4,099.7 million from USD 3,030.2 million; industrial supplies reached USD 5,718.2 million.
Income accounts: the primary income deficit narrowed to USD 1,870.2 million on lower payments to non-residents, while the secondary income surplus fell to USD 441.4 million.

02 — Services ExportsServices Receipts by Category

Service receipts increased 11.7% to USD 8,255.4 million in the year ending August 2026, backed by transport and travel receipts. Monthly receipts rose to USD 926.0 million in August 2026 from USD 772.9 million a year earlier (+19.8%, TERI calculation), largely on travel.

Category (USD million)	Yr to Aug 2024	Yr to Aug 2025	Yr to Aug 2026p	Growth y/y	Share 2025	Share 2026
Travel (tourism)	3,767.7	4,314.7	4,389.7	+1.7%	58.4%	53.2%
Transport	2,305.0	2,612.5	3,303.3	+26.4%	35.4%	40.0%
Other services	592.4	462.6	562.4	+21.6%	6.3%	6.8%
Total service receipts	6,665.1	7,389.8	8,255.4	+11.7%	100%	100%

Source: Bank of Tanzania, Chart 2.7.3 and Table 2.7.1. Growth and shares are TERI calculations. Other services include construction, insurance, financial, telecommunication, computer and information, intellectual property charges, government, personal and other business services.

Services Receipts by Category

USD million, years ending August

Composition of Receipts, Yr to Aug 2026

Percent of USD 8,255.4 million

Travel (USD 4,389.7m, +1.7%) reflects continued resilience in tourism but has slowed sharply after growth of 14.5% the year before (TERI calculation), so its share fell to 53.2% from 58.4%.
Transport (USD 3,303.3m, +26.4%) was underpinned by freight earnings from transit trade, which is the fastest-growing services export.
Other services (USD 562.4m, +21.6%) recovered from USD 462.6 million but remain below the USD 592.4 million of 2024.

03 — Services ImportsServices Payments

Service payments increased to USD 3,498.2 million from USD 3,196.2 million, driven largely by freight. Freight payments rose to USD 1,683.4 million from USD 1,300.4 million, indicating strong import demand and persistent pressure on international shipping costs. Monthly service payments were USD 298.9 million in August 2026, against USD 318.4 million a year earlier.

Category (USD million)	Yr to Aug 2024	Yr to Aug 2025	Yr to Aug 2026p	Growth y/y	Share 2026
Transport	1,342.5	1,454.0	1,829.8	+25.8%	52.3%
Other services	756.1	1,066.6	976.4	−8.5%	27.9%
Travel	439.0	675.7	692.1	+2.4%	19.8%
Total service payments	2,537.7	3,196.2	3,498.2	+9.4%	100%

Source: Bank of Tanzania, Chart 2.7.5 and Table 2.7.1. Growth and shares are TERI calculations; category figures may differ from the total by USD 0.1 million due to rounding.

Services Payments by Category

USD million, years ending August

Selected Services and Related Imports

USD million, years ending August 2025 vs 2026

Freight is the pressure point

Transport payments (USD 1,829.8m) are 52.3% of services payments and grew 25.8%, in step with the 24.1% growth in goods imports and with shipping costs raised by the Middle East conflict. Because Tanzania earns freight receipts from transit trade (USD 3,303.3m in transport receipts) but also pays heavily for import freight, the net transport surplus of USD 1,473.5 million depends on keeping corridor volumes high (TERI calculation).

04 — Net PositionServices Balance by Category

USD million	Receipts 2026p	Payments 2026p	Net 2025	Net 2026p
Travel	4,389.7	692.1	3,639.0	3,697.6
Transport	3,303.3	1,829.8	1,158.5	1,473.5
Other services	562.4	976.4	−604.0	−414.0
Services account	8,255.4	3,498.2	4,193.5	4,757.1

TERI calculation from Charts 2.7.3 and 2.7.5; the totals differ from Table 2.7.1 (USD 4,193.6m and 4,757.2m) by rounding.

Net Services Balance by Category

USD million, yr to Aug 2025 vs 2026p (TERI calculation)

Travel contributes 78% of the net services surplus. Transport's net surplus rose by USD 315.0 million (TERI calculation), the main reason the services surplus grew 13.4%. "Other services" remain a net outflow, though the deficit narrowed by USD 190 million.

05 — AnalysisRisks and Strengths

Strength, services surplus: USD 4,757.2 million, covering 82% of the goods deficit.
Strength, gold and reserves: gold exports of USD 5,625.0 million and the Bank's gold purchase programme support reserves of USD 5,888.2 million.

Key risks

Oil: a prolonged Middle East conflict keeps petroleum imports (USD 3,425.6m) and freight costs elevated.
Gold dependence: about two-thirds of the export increase came from one commodity, exposed to price reversals.
Tourism slowdown: travel receipts grew only 1.7%, and travel is 53% of services receipts and 78% of the services surplus.
Financing: the shilling depreciated 6.7% y/y; a wider deficit adds to external borrowing needs.

06 — RecommendationsPolicy Recommendations

1. Diversify services exports

Promote ICT, business and financial services alongside tourism.
Report "other services" in more detail to track new exports.

2. Cut the freight and fuel bill

Strengthen the railway and port corridor to lower logistics cost and retain transit trade.
Advance domestic energy and local fuel-storage options.

3. Broaden goods exports

Add value to gold, agriculture and minerals to reduce commodity concentration.
Address the drop in cashew, cereals and oilseed exports.

4. For investors and importers

Budget for freight and FX volatility in import-dependent projects.
Tourism and logistics remain the largest services opportunities.

"Tanzania sells more services than it buys, but oil, freight and a single commodity now decide how wide the gap gets. Services are the cushion, not the cure."

— TICGL / Tanzania Economic Research Institute (TERI)

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07 — Quick AnswersFrequently Asked Questions

What is Tanzania's current account deficit?

USD 2,481.8 million in the year to August 2026, up from USD 1,700.9 million.

How much does Tanzania earn from services?

USD 8,255.4 million: travel USD 4,389.7 million, transport USD 3,303.3 million, other USD 562.4 million.

What are services payments?

USD 3,498.2 million, driven by freight payments of USD 1,683.4 million.

Why did imports rise?

Intermediate and capital goods, and a 51.7% jump in petroleum imports to USD 3,425.6 million.

Method & Source Note

Built from the Bank of Tanzania Monthly Economic Review, September 2026: Section 2.7 (External Sector Performance), Table 2.7.1, Charts 2.7.1–2.7.5, and Tables A5–A7. Growth rates, shares, net services balances and the current account bridge are TERI calculations.

Muhtasari kwa Kiswahili

Sekta ya Nje ya Tanzania, Agosti 2026 — Pengo la akaunti ya sasa (current account) liliongezeka hadi Dola milioni 2,481.8 kwa mwaka ulioishia Agosti 2026 kutoka 1,700.9, kwa sababu uagizaji wa bidhaa na huduma (+21.4%) ulikua haraka kuliko mauzo ya nje (+16.4%).

Mapato ya huduma: Dola milioni 8,255.4 (+11.7%): utalii 4,389.7 (+1.7% tu), usafirishaji 3,303.3 (+26.4%, kutokana na biashara ya usafirishaji wa mizigo ya nchi jirani), na huduma nyingine 562.4.

Malipo ya huduma: Dola milioni 3,498.2 (+9.4%), yakichochewa na usafirishaji wa mizigo (freight) uliofikia 1,683.4 kutoka 1,300.4.

Urari wa huduma: ziada ya Dola milioni 4,757.2, ikifidia karibu 82% ya nakisi ya bidhaa. Utalii unachangia 78% ya ziada hiyo (hesabu za TERI).

Hatari: bei za mafuta (uagizaji wa mafuta +51.7%), gharama za usafirishaji, utegemezi wa dhahabu, na kupungua kwa kasi ya ukuaji wa utalii.

Akaunti ya sasa: −$2,481.8M | Akiba: $5,888.2M (miezi 4.2)
Mapato ya huduma: $8,255.4M | Malipo: $3,498.2M
Mauzo ya dhahabu: $5,625.0M

Chanzo: Benki Kuu ya Tanzania, Monthly Economic Review, Septemba 2026. Maelezo zaidi: economist@ticgl.com.

00 — OverviewExecutive Summary

Read this alongside TICGL/TERI's investment-climate analysis

A1 — Macro DashboardTanzania's Macro Variables at a Glance, August 2026

Longer-run context: 2018–2025

Real GDP Growth and Inflation, 2018–2025

Private-Sector Credit to GDP, 2018–2025

A2 — Prices & InflationInflation Has Changed Character: From Food-Driven to Core-Driven

Twelve-Month Inflation: Headline, Core, Food and Energy

Contribution to Headline Inflation

Underlying Pressures: Core, Services and Goods

Inflation by main group, August 2026

Food supply and fuel: the swing factors

A3 — Rates, Money & CreditThe Cost of Money: Higher Policy Rate, Falling Yields, Booming Credit

Government Yield Curve: Aug-25 vs Aug-26

Overall Treasury Bill Yield, Aug-25 to Aug-26

Treasury yields by tenor

Bank lending and deposit rates

Lending Rates, Deposit Rate and Spread, Jan–Aug 2026

Money supply and private-sector credit

Extended Broad Money (M3), Aug-25 to Aug-26

Credit to the Private Sector

Annual Credit Growth by Economic Activity: Aug-25 vs Aug-26

A4 — Fiscal Operations & DebtRevenue Is Beating Targets; Debt Is Rising Faster Than the Headline Suggests

June 2026 Revenue and Grants: Actual vs Estimate

June 2026 Expenditure: Actual vs Estimate

June 2026 outturn versus estimate, and financial-year totals

National debt: size, currency and creditor

Government Domestic Debt Stock

External Debt by Creditor, Aug-26

External Debt by Currency, Aug-26

External Debt by Use of Funds, Aug-26

A5 — External Sector & Exchange RateExports Are Strong, but Imports Are Stronger: The Current-Account Deficit Is Widening

Select Exports of Goods and Services

Select Imports of Goods and Services

Exports: gold leads, manufactured goods surge, traditional crops mixed

Services Receipts by Category

Imports: capital goods, intermediate goods and petroleum

The shilling and the Interbank Foreign Exchange Market

TZS per USD, End of Period

Current-Account Balance, 2018–2025 and Year to Aug-26

Gross Official Reserves, 2018–2025 and Aug-26

A6 — ZanzibarZanzibar: Higher Inflation, a Growing Current-Account Surplus and Tourism-Led Receipts

Zanzibar Annual Inflation

Zanzibar Government Resources, August 2026

A7 — Global BackdropThe External Shock Behind the Domestic Numbers

Crude Oil (Average), Aug-25 to Aug-26

Gold and Urea Price Path

B1 — Risk WatchlistWhat Could Change These Numbers in the Next Quarter

1Prolonged Middle East conflict

2El Niño strengthening into 2027

3Wider external deficit and shilling pressure

4Credit boom and rate path

06 — SourcesMethod & Source Note

B2 — Quick AnswersFrequently Asked Questions

What was Tanzania's inflation rate in August 2026?

What is the Central Bank Rate and why was it raised?

Which sectors are seeing the fastest credit growth?

How has the shilling moved?

How large is the current-account deficit?

How large is Tanzania's public debt?

07 — Explore MoreTICGL Economic: Related Insights & Tools

What Opportunities and Risks Define Doing Business in Tanzania in 2026?

Is Tanzania's Economy Growing?

Why Tanzania's Economic Growth Has Not Been Sufficiently Inclusive

Gold Dependence and Tanzania's Economic Future

Government Securities Dominance: The Crowding-Out Problem

Tanzania's Capital Market: Growing Fast, Still Shallow

China's Capital Surge Into Tanzania's SEZ Agriculture & Forestry Sector

Invest in Tanzania

Tanzania Business Intelligence Dashboard

Muhtasari kwa Kiswahili

00 — OverviewExecutive Summary

01 — The StockDebt Stock and Twelve-Month Trend

National Debt Stock: External and Domestic

Growth: Shilling Terms vs Constant Exchange Rate

External Debt, Long-Run

Domestic Debt, Long-Run

02 — ExternalExternal Debt: Who Lends, to Whom, and in What Currency

External Debt by Creditor

Disbursed Debt by Currency