Tanzania Budget 2026/27: How New Taxes Will Hit Your Wallet | TICGL Economic Analysis
TICGL Budget Analysis · June 2026
Tanzania Budget 2026/27: How New Taxes Will Hit Your Wallet — And Why the Government Keeps Taxing More Instead of Enabling More
A rigorous, data-driven assessment of the FY2026/27 fiscal proposals — who bears the burden, what remains unaddressed for private investment, and whether Tanzania is building a sustainable revenue base or simply squeezing existing taxpayers harder.
📅 Presented to Parliament: 11 June 2026👤 Author: TICGL Economic Research📑 Source: MoF Budget Speech 2026/27💰 Total Budget: TZS 62.33 Trillion
TZS 62.33T
Total Budget Size
▲ 10.3% vs 2025/26
TZS 36.99T
Tax Revenue Target
▲ 13.7% of GDP (target)
TZS 7.71T
Budget Deficit
2.9% of GDP
TZS 1.0T+
New Tax Revenue Expected
From FY2026/27 measures
6.3%
GDP Growth Target 2026
▲ from 5.9% in 2025
TZS 114.34T
National Debt (Mar 2026)
39.6% of GDP
The Big Picture
Understanding Tanzania's FY2026/27 Budget: Revenue at the Centre
With global aid shrinking and the government committed to self-financing, the 2026/27 budget is fundamentally about extracting more from the existing tax base while attempting selective protection of domestic industry.
Tanzania's Finance Minister, Ambassador Khamis Mussa Omar, presented the FY2026/27 Budget Speech to the National Assembly on 11 June 2026 — a budget totalling TZS 62.33 trillion, the largest in the country's history and a 10.3% increase over the previous year's budget of TZS 56.49 trillion.
The budget theme — "Building a resilient economy through digital transformation, strategic investment, and sustainable fiscal policies for inclusive economic growth" — signals ambition. But the mechanics of how that resilience is to be financed tells a different story: nearly every major law covering tax and revenue has been amended to raise rates, broaden taxable bases, or close exemptions.
This analysis dissects those measures through the lens of the ordinary Tanzanian — the smallholder farmer, the bodaboda rider, the small trader, the salaried employee — and asks the critical structural question: Is Tanzania building a tax system that incentivises economic activity, or one that increasingly taxes whatever activity already exists?
Why Aid Is No Longer the Answer
Official Development Assistance (ODA) is projected to fall by a dramatic 39.1% in 2026/27 compared to pledges for 2025/26. This is a structural, not temporary, shift — reflecting geopolitical realignments among major donors. The government's response is correct in principle: domesticate the revenue base. The question is how.
Budget Revenue Composition 2026/27
TZS 46.79 Trillion Total Revenue (Billions TZS)
Budget Size Trend (TZS Trillion)
Government total budget including all funding sources
Tax Revenue vs GDP Ratio (%)
Tax-to-GDP trajectory — still among Africa's lowest
Fiscal Architecture
Where the Money Comes From — and Where It Goes
The 2026/27 budget is the most ambitious spending plan Tanzania has presented. Understanding its architecture is essential to judging its sustainability.
Budget Line
2025/26 (TZS Bn)
2026/27 (TZS Bn)
Change
% of Total Budget
Tax Revenue
32,660
37,022
+13.4%
59.4%
Development Partners (Aid/Grants)
925
563
-39.1%
0.9%
Non-Tax & LGA Revenue
~7,800
9,206
+18.0%
14.8%
Wages & Benefits
7,710
10,127
+31.4%
16.2%
Goods & Services
7,810
5,215
-33.2%
8.4%
Interest Payments
14,210
6,860
-51.7%
11.0%
Grants & Subsidies
~23,980
25,320
+5.6%
40.6%
Capital Investment
~2,780
2,329
-16.2%
3.7%
Budget Deficit
~15,100
7,707
-49.0%
2.9% of GDP
TOTAL BUDGET
56,490
62,334
+10.3%
100%
⚠ Structural Concern: Wage Bill Explosion
The wage bill grows by 31.4% to TZS 10.13 trillion — the single largest spending jump in the budget. Meanwhile, capital investment contracts by 16.2% to TZS 2.33 trillion. This ratio — spending far more on recurrent consumption than productive investment — is a long-term competitiveness risk.
Expenditure Breakdown 2026/27 (TZS Billion)
Where every shilling of government spending goes
Deficit Financing Plan 2026/27 (TZS Billion)
How Tanzania plans to cover TZS 7.71T shortfall
Tax Policy 2026/27
The Full Catalogue of Tax Measures and Their Cost to Citizens
The Finance Bill 2026 amends at least 20 different laws. Below is a comprehensive analysis of the most impactful changes, grouped by law and assessed for citizen welfare effects.
📊 Total Revenue Impact Summary
New tax measures are projected to yield approximately TZS 1.02 trillion in additional annual revenue. The biggest contributors: Excise Duty reforms (TZS 355.09 billion), Income Tax changes (TZS 174.48 billion), Customs Processing Fee increase (TZS 203.23 billion), and the advance single instalment tax on agricultural buyers (TZS 99.87 billion).
1. Value Added Tax (VAT) — Sura 148: Mostly Reliefs, but Net Cost Minimal
Measure
Direction
Revenue Impact (TZS M)
Who Is Affected?
Welfare Assessment
VAT refunds paid within 30 days; taxpayer earns interest if delayed
✅ VAT Net Effect: Mild Revenue Reduction of TZS 26.6 Million
The VAT package is broadly business-friendly. The most significant citizen benefit is the mandatory 30-day VAT refund with interest penalty — a long-overdue reform that should unlock working capital for thousands of registered traders.
2. Income Tax Act — Sura 332: More Rates, Wider Nets, Mixed Signals
Measure
Direction
Revenue Impact (TZS Bn)
Affected Population
Welfare Assessment
1-year income tax holiday for new small businesses (presumptive regime)
Relief
—
New entrepreneurs entering formal sector
Strongly positive: reduces startup burden
Presumptive regime threshold raised from TZS 100M to 200M
Relief
—
SMEs with turnover TZS 100–200M
Positive: aligns with VAT registration threshold
Presumptive tax rate raised from 3.5% to 4.5% (turnover TZS 11M–200M)
Increase
+75.11
~700,000+ small traders, vendors, mechanics
Negative: a 28.6% rate hike on small businesses
Digital services withholding tax (foreign providers): 2% → 3%
All government entities to withhold income tax on domestic purchases
New Tax
—
All suppliers to government
Cash flow risk for small government contractors
Advance tax 1% on crop buyers (agricultural produce)
New Tax
+99.87
Agricultural commodity buyers & intermediaries
Risk of being passed to farmers as lower farm-gate prices
WHT 1% on purchases of live animals, raw fish, unprocessed milk
New Tax
+49.49
Livestock keepers, fishers, dairy farmers
Could depress prices received by smallholders
Income Tax Act aligned with mining framework agreements
Relief
—
Mining investors
Positive for large-scale mining FDI
⚠ Critical Concern: The Smallholder Squeeze
The combined effect of the 1% advance tax on agricultural buyers and the 1% WHT on livestock/fish/milk transactions risks cascading down to the most vulnerable: smallholder farmers and pastoralists. Buyers under margin pressure will reduce farm-gate prices to maintain profitability. Tanzania's rural poor — 65.1% of the population living in villages — bear the cost through lower incomes on already thin margins.
3. Excise Duty — Sura 147: The Biggest Revenue Driver, with Broad Consumer Impact
Positive: fuel already up 44–49% since March 2026; relief maintained
⚠ The Bodaboda & Cheap Car Problem
Tanzania has over 3 million registered motorcycles, overwhelmingly used as commercial transport (bodaboda). A new 5% excise on motorcycle purchases will raise acquisition costs by TZS 200,000–400,000 per bike for affordable models — squeezing the capital access of self-employed transport workers at a time when fuel costs have already surged by up to 49%.
New Tax Revenue by Source 2026/27 (TZS Billion)
Expected incremental revenue from FY2026/27 measures
Excise Duty Impact by Product Category
Revenue contribution per major excise category (TZS Billion)
4. Customs Processing Fee — Sura 399: A Quiet But Costly Measure
⚠ 67% Increase in Import Processing Fee
The Customs Processing Fee rises from 0.6% to 1.0% of import value — a 67% increase. This single measure is expected to raise TZS 203.23 billion. For importers, this is a direct cost increase on every consignment. For consumers, it translates to higher prices for imported goods. For businesses relying on imported inputs (machinery, chemicals, raw materials), it raises production costs, undermining the competitiveness of domestic manufacturing.
5. Other Key Measures
Law / Area
Measure
Revenue (TZS Bn)
Citizen Impact
Local Government Finance Act — Sura 290
LGA allocation for youth/women loans raised from 10% to 15% of own revenue; 5% for market investment
—
Positive: more credit access for youth, women, and PWDs
Land Act — Sura 113
Land rent revenue redistributed: 10% to MoL, 10% to LGAs
—
Could improve land administration at local level
Central Bank Act — Sura 197
Government overdraft cap reduced from 18% to 14% of prior year domestic revenue
EAC Common External Tariff Changes: Industrial Protection vs Consumer Welfare Trade-offs
Tanzania's participation in the EAC Pre-Budget Consultations (Arusha, 15 May 2026) produced a series of tariff adjustments that balance domestic industry protection against the interests of ordinary consumers.
Key EAC Tariff Increases (New Rate %)
Selected products with significant tariff hikes
Key EAC Tariff Reductions (New Rate %)
Products with reduced duties to support investment or consumers
Domestic Industry Protection Measures
Industries receiving tariff shields 2026/27
Product
Old Duty
New Duty
Direction
Why It Matters
Electric vehicles (HS 8702–8704)
25%
10%
Reduced
Positive for EV adoption; lower cost for green transport
Used clothing (mitumba)
35% or $0.40/kg
35% only (flat rate)
Relief
Positive: removes per-kg penalty; lowers cost of affordable clothing
Vitenge/printed fabric
50%
35%
Reduced
Positive: lowers cost of traditional clothing for households
Crude palm oil (CPO)
0%
10%
Increased
Higher cost of imported cooking oil inputs; protects local oilseed farmers
Decorative/building stones (HS 68.02)
25%
35% or $2/sqm
Increased
Protects local stone quarries; raises construction costs
Aluminium bars & profiles (HS 76.04)
25%
25% or $550/tonne
Increased
Protects local aluminium processors; raises construction material costs
Mineral/aerated water (HS 2201.10.00)
35%
60%
Increased
Strong industry protection; may raise bottled water prices
Baby diapers (HS 9619.00.90)
10%
35%
Increased
Significant: much higher cost for a basic child welfare product
Soap (HS 3402.49/50/90)
25%
35% or $350/tonne
Increased
Protects local manufacturers; may raise household soap prices
Cotton grey fabric
25%
35% or $0.30/metre
Increased
Supports domestic textile industry
Table salt (HS 2501.00.90)
35%
50%
Increased
Protects local salt producers; higher cost for basic food staple
Sugar (emergency imports via TBS permit)
100% or $460/tonne
35%
Reduced
Positive: allows lower-cost emergency sugar imports to bridge domestic shortfall
Smart cards for NIDA
25%
0%
Exempt
Positive: facilitates cheaper national ID cards for all citizens
EFD/POS machines
10%
0%
Exempt
Supports small business tax compliance infrastructure
Motorcycle tyres (new)
10%
25%
Increased
Compounded with 5% excise on motorcycles — bodaboda operators face double hit
⚠ Baby Diapers: A Regressive Tax Choice
The 250% increase in customs duty on imported baby diapers (from 10% to 35%) in the name of protecting domestic manufacturers will significantly raise the cost of a basic child welfare necessity. Tanzania's domestic diaper manufacturing capacity is limited. Until domestic production scales up, the tax burden falls on mothers and caregivers — disproportionately affecting low-income families with young children.
Who Pays — Who Benefits
The Citizen Impact Matrix: Household by Household
Not all Tanzanians are equally affected. Here is how the 2026/27 tax package maps against different segments of the population.
🚲
Bodaboda Operator
New 5% excise on motorcycle purchases, higher import duties on tyres (10% → 25%), and fuel already up 44–49%. Three compounding pressures on operating costs. Little to no offsetting relief.
Net Hurt
👨🌾
Smallholder Farmer
New 1% advance tax on crop buyers and 1% WHT on livestock/milk/fish sales risks lowering the farm-gate prices buyers are willing to pay. On thin margins, even a 1% cut can eliminate profit. Some relief: fertiliser subsidy maintained.
Net Hurt
🏪
Small Trader / Duka
Presumptive tax rate raised from 3.5% to 4.5% — a 28.6% rate hike. However, new businesses get a 1-year holiday and the threshold doubles to TZS 200M. Net effect depends on whether the trader is established or new.
Positive: VAT deferment for capital goods extended indefinitely. Reduced retained earnings WHT (30% → 15%). EV tariff cut. Negative: customs processing fee up 67%, raising input costs.
Mixed
🚗
Second-Hand Car Buyer
Used cars (10–20 years old) face a 33% rate hike in excise duty (30% → 40%). Most Tanzanian car buyers can only afford older vehicles. This directly raises the cost of the most accessible form of private transport.
Net Hurt
🍃
Green Economy Pioneer
Electric vehicles: customs duty halved (25% → 10%). EV charging stations: VAT-exempt. LPG smart meters: VAT-exempt. The government sends consistent green signals — but the EV benefit primarily serves higher-income buyers for now.
Net Helped
👶
Young Mother / Caregiver
Baby diapers face a 250% tariff hike (10% → 35%). With limited domestic production, this directly increases the cost of child hygiene. In a country with a TFR of ~4.8, this affects millions of households.
Net Hurt
🧑💻
Digital Economy Startup
Digital services WHT rises to 3%. However, digital platforms for payment now gain additional incentives (extra credit access points for digital payment users). Formalisation push is strong — bodabodas and street vendors pushed toward digital payments.
Mixed
Overall Budget 2026/27 — Tax Burden Distribution: Who Bears What?
Estimated share of new tax burden by household income group (qualitative assessment)
TICGL Research Analysis
The Deeper Question: Why Tax More Instead of Enabling More?
Beyond the mechanics of rate changes lies a fundamental policy question about the government's theory of economic development and its role in it.
The Vicious Cycle of Narrow Tax Bases
Tanzania's tax-to-GDP ratio stands at approximately 13.2% in 2025/26, rising to a targeted 13.7% in 2026/27. This remains one of the lowest ratios in Sub-Saharan Africa — where peers like Rwanda exceed 15%, Kenya approaches 16%, and the EAC average stands around 14.5%.
The structural challenge is not a lack of tax rates — Tanzania has rates comparable to regional peers — but rather a narrow tax base. An estimated 70% or more of economic activity in Tanzania remains outside the formal tax net. The TRA is therefore intensifying collection from the same pool of registered businesses, while the informal economy continues to operate largely untaxed.
This creates a vicious cycle: higher rates on formal businesses push the marginal entrepreneur toward informality; the formal tax base shrinks; rates must rise again to maintain revenue targets. The 3.5% → 4.5% presumptive tax increase for small traders is a textbook example of this dynamic.
The Investment Environment Gap
Tanzania's 2026/27 budget introduces no major measure to address the core structural barriers to private investment: the cost and access of credit (average commercial lending rates of 16–18%); contract enforcement delays (average commercial dispute takes 3–5 years); the multiplicity of regulatory agencies and levies (noted directly in the budget speech as an ongoing challenge); and land title insecurity.
The government has reduced retained earnings WHT (a positive step) and extended VAT deferment for capital goods (excellent). But these are tactical adjustments, not systemic shifts. The Presidential Commission on Tax System Reforms (Tume ya Rais ya Maboresho ya Mfumo wa Kodi) reportedly submitted 284 recommendations — the budget addresses only a handful.
Is the State Still the Main Investor?
The 2026/27 budget allocates TZS 2.33 trillion to capital investment in physical assets — down 16.2% from the previous year. Yet the budget speech emphasises strategic investment in infrastructure: the SGR railway extension (Dodoma–Mwanza, Isaka–Kigoma), TAZARA rehabilitation, the Strategic Petroleum Reserve, and energy investments. These are financed primarily through borrowing.
Tanzania continues to borrow to invest, while its private sector — which should be the engine of asset formation — struggles to access affordable capital. This reflects a government that still sees itself as the primary delivery mechanism for developmental investment, rather than as a facilitator of private investment at scale.
The budget references PPP frameworks and private sector participation — but the 2026/27 budget does not include a single major announced PPP transaction in infrastructure, despite the rhetoric about private-sector-led growth.
The Fiscal Sustainability Question
With interest payments at TZS 6.86 trillion (13.1% of total expenditure), and a new borrowing programme of TZS 15.54 trillion planned for 2026/27, the debt service burden will grow in future years. Tanzania's overall debt remains technically sustainable at 39.6% of GDP against a 55% ceiling — but the trajectory bears watching, especially as concessional loan terms tighten and commercial borrowing (TZS 2.43 trillion planned) becomes a larger share of the mix.
"The budget speech calls for a private-sector-led economy — but the fiscal architecture of 2026/27 shows a government that still believes the most reliable path to development finance is extracting more from the taxpayers it already knows. Until Tanzania broadens its formal economy and reduces the cost of doing business, it will keep tightening the same screw."
— TICGL Economic Research Commentary, June 2026
Tanzania GDP Growth, Tax Revenue, and Debt Service Trajectory (2020–2027)
How the three key fiscal variables have moved and are projected to move
Complete Data
Full Revenue Impact of All 2026/27 Tax Measures
A comprehensive fiscal accounting of every tax measure in the Finance Bill 2026, ranked by revenue contribution.
The 2026/27 budget is crafted against a backdrop of solid growth but rising external pressures — notably the US-Iran-Israel conflict pushing fuel and fertiliser prices sharply higher.
Real GDP Growth Rate (%)
Tanzania vs EAC average
Inflation Rate Trend (%)
Tanzania headline CPI — within target band
National Debt Composition (TZS Trillion)
Domestic vs External debt as at March 2026
Indicator
2023
2024
2025
2026 (Target)
Status
Real GDP Growth (%)
5.1
5.5
5.9
6.3
On Track
Headline Inflation (%)
4.9
3.8
3.4
3.0–5.0
Within Target
Tax Revenue / GDP (%)
12.1
12.8
13.2
13.7
Improving
Domestic Revenue / GDP (%)
14.9
15.7
16.5
17.1
Improving
Public Debt / GDP (%)
40.4
39.8
~39.6
~40%
Stable
Forex Reserves (months import cover)
4.0
5.1
5.72 bn USD
≥4 months
Adequate
Budget Deficit / GDP (%)
3.5
3.2
~3.0
2.9
Narrowing
GDP in TZS (Trillion)
190.2
212.4
234.1
~260
Growing
GDP in USD (Billion)
76.3
84.1
91.8
~100
Growing
Poverty Rate (below basic needs) %
—
—
25.1
—
Needs Acceleration
📌 The Fuel Price Shock Context
Petrol and diesel prices in Dar es Salaam rose by 44% and 49% respectively between March and May 2026 — driven by the US-Iran-Israel conflict. Tanzania imports over 80% of its fertiliser, mostly from the Middle East. These are not budget-induced shocks, but they compound the welfare burden of new tax measures on transport and agricultural costs. The government's decision to hold fuel excise duties steady is therefore among the most significant welfare decisions in this budget.
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Tanzania Budget 2026/27: Does It Deliver FYDP IV's 70/30 Private Investment Promise? | TICGL
📊 TICGL Economic Intelligence · June 2026
Tanzania Budget 2026/27: Does the First FYDP IV Budget Honour the 70/30 Private Investment Promise?
A TZS 62.33 trillion spending plan. Tanzania's first budget under the new Five-Year Development Plan. But with dozens of new taxes and fees added, are we creating the private-sector environment FYDP IV demands — or imposing new burdens that crowd it out?
⚠️TICGL Verdict: The budget is structurally misaligned with FYDP IV's 70/30 private investment model. Revenue targets dominate over investment facilitation — the first budget under a plan designed to unleash private capital instead adds tax complexity.
TZS 62.33T
Total Budget 2026/27
+10.3% vs 2025/26
TZS 46.79T
Total Revenue Target
74.2% from domestic sources
TZS 7.71T
Budget Deficit
2.9% of GDP — within target
5.9%
GDP Growth 2025 (actual)
Target 2026: 6.3%
3.4%
Avg Inflation Jul–Apr
Within 3.0–5.0% target
TZS 114.34T
Total Public Debt
39.6% of GDP (limit: 55%)
USD 91.8B
Nominal GDP 2025
FYDP IV target: USD 118B by 2031
–39.1%
Aid Decline 2026/27
Donor policy shifts
Context & Framework
What Makes This Budget Different: The FYDP IV Mandate
Tanzania's Fourth Five-Year Development Plan (FYDP IV, 2026/27–2030/31) is the country's most ambitious financing shift in a generation. Its core promise is a 70:30 private-to-public investment model — meaning TZS 324.5 trillion of the plan's projected TZS 477.7 trillion total investment must come from the private sector. This budget is the very first annual budget issued under that plan. The critical question is: does it create the conditions private investors need?
FYDP IV Total Investment: 70/30 Private-to-Public Split
TZS Billion · 5-Year Plan 2026/27–2030/31
Budget 2026/27: Revenue vs Expenditure Breakdown
TZS Trillion
💡
The 70/30 Equation
FYDP IV requires the private sector to invest TZS 324.49 trillion over five years — roughly TZS 64.9 trillion per year — while total GDP currently stands at TZS 234.1 trillion. This means annual private investment must exceed one-quarter of GDP, a target that requires fundamentally lower business costs and greater investor confidence. Every policy decision in this budget must be evaluated against that bar.
USD 183B
Total FYDP IV Investment Required (5 years)
70%
Share expected from Private Sector
30%
Share from Government & Public Corporations
USD 1T
Tanzania's GDP target by Dira 2050
10.5%
Real GDP growth needed by 2030/31 (FYDP IV)
Economic Performance
Tanzania's Economy: Solid Foundations, But Incomplete Transformation
The macroeconomic backdrop entering the FYDP IV era is one of resilience — GDP growth, inflation control, and foreign exchange stability are all on track. But inclusivity and structural transformation remain incomplete, and global shocks (US–Iran–Israel tensions, US–China tariff wars) are creating real inflationary pressure on energy and fertiliser.
GDP Growth Rate Trend (2020–2026 Target)
Real GDP Growth % — Actual & Projected
Inflation Rate vs Target Band
Annual Average % — Actual vs 3–5% Policy Target
Foreign Exchange Reserves
USD Billion — Adequacy in months of imports
Public Debt vs GDP Limits
Percent of GDP — Actual vs IMF/EAC Ceilings
⚠️
Global Shock: Fuel Prices Up 44–49%
Between March and May 2026, petrol and diesel prices in Dar es Salaam rose 44% and 49% respectively due to the US-Israel-Iran conflict. Fertiliser prices rose 4–46% depending on type, with Tanzania importing over 80% of its fertiliser (70% from the Middle East). The government responded with fuel subsidies of TZS 259/litre (May) and TZS 535/litre (June) for diesel — adding to expenditure pressure.
Key Macroeconomic Indicators: Performance vs Targets
Indicator
2025 Actual
2025/26 Target
2026/27 Target
FYDP IV 2030/31
Status
Real GDP Growth (%)
5.9%
5.8%
6.3%
10.5%
On Track
Nominal GDP (USD Billion)
91.8
—
~98
118.1
On Track
Inflation Rate (%)
3.4%
3.0–5.0%
3.0–5.0%
<5%
Achieved
Tax Revenue / GDP (%)
13.2%
13.2%
13.7%
18%+
Rising
Domestic Revenue / GDP (%)
16.5%
16.5%
17.1%
22%+
Rising
Budget Deficit / GDP (%)
—
≤3.0%
2.9%
≤3%
Within Limit
Public Debt / GDP (%)
39.6%
—
~40%
<55% limit
Sustainable
FX Reserves (months of imports)
4.4 months
≥4 months
≥4 months
6 months
Achieved
Poverty Rate (%)
25.1%
—
—
22%
Improving
Private Sector Credit Growth (%)
20.2%
—
—
25%+
Strong
FDI (USD Billion)
~21.7
—
—
50B+
Growing
Budget Architecture
The TZS 62.33 Trillion Budget: Where the Money Goes
The 2026/27 budget is TZS 62.33 trillion — a 10.3% increase on the prior year. Revenue self-sufficiency is improving (74.2% domestic-funded), but aid from development partners is falling sharply by 39.1%. Debt servicing (interest alone: TZS 6.86 trillion) remains the second largest expenditure line after grants/transfers.
The Tax Measures of 2026/27: How Many New Burdens Does the Private Sector Face?
The budget proposes an extensive range of tax changes across multiple laws. While some provide relief (duty remissions for manufacturers, EV incentives), a significant number impose new levies — raising questions about whether the cumulative effect creates a more or less conducive environment for the private sector investment FYDP IV demands.
🔴
TICGL Critical Observation
FYDP IV explicitly states the private sector must drive 70% of all national investment. Yet the 2026/27 budget introduces excise duty increases (8% blanket rise), customs processing fees raised from 0.6% to 1%, new crop withholding taxes, higher used vehicle import duties, motorcycle excise tax, new gambling levies, and 25+ sectoral fee changes. The net effect is higher input costs for businesses — the opposite of what a private-sector enabling environment requires.
1-year income tax exemption for new formal businesses
Income Tax Act
—
🟢 Encourages formalisation
Aligned
Duty remission for optical fibre cable manufacturers
Customs
—
🟢 Supports digital infrastructure investment
Aligned
LGA youth/women loan fund raised from 10% to 15%
Local Government Finance Act
—
🟢 Boosts grassroots entrepreneurship
Aligned
Selected measures total (revenue-raising)
~1,600+
Tax Measures: FYDP IV Alignment Score
Count of key measures by private sector impact
Projected Tax Revenue by Type 2026/27
TZS Billion — Composition of TZS 37.0 Trillion
Policy Gap Analysis
FYDP IV Vision vs Budget 2026/27 Reality: A Side-by-Side Analysis
FYDP IV articulates a clear theory of change: remove barriers, reduce the cost of doing business, position Tanzania as an industrial and logistics hub, and allow the private sector to lead investment. This analysis tests whether the first budget under the plan advances or impedes that theory.
🎯 FYDP IV Requires
Private sector to invest TZS 324.5 trillion over 5 years (70% share)
Reduced cost of doing business through regulatory simplification
Business environment that makes Tanzania a "regional industrial, logistical, and business hub"
Lower import duties on raw materials for manufacturers
Reduction of informal economy through incentives, not compliance burden
Skills development and employment creation — especially for youth
Clean energy transition: EV and gas adoption incentivised
Agricultural value chain investment enabled
Financial inclusion deepened; access to credit broadened
📋 Budget 2026/27 Delivers
Only TZS 2.33 trillion in direct government capital investment (–16.2% vs prior year)
8% blanket excise duty rise + new customs processing fee + new withholding taxes
MKUMBI II (business reform) still "in final stages" — not yet implemented
New duty remissions for selected sectors (fibre, EV batteries, dairy packaging)
New taxes on motorcycles, crops, livestock, gambling, vehicles, beauty products
1-year income tax exemption for new formal businesses — a positive step
TZS 1.58T for VETA/education + TZS 135.8B in microloans to youth/women
EV duty cut to 10%, EV charging VAT exemption, CNG supply chain VAT exemption
New 1% crop withholding tax on buyers — raises agri transaction costs
TIPS digital payment system expanded, new Islamic banking regulations
🔍
The MKUMBI II Gap
The government's Business Environment Improvement Programme (MKUMBI I) reformed 55 laws and eliminated 374 fees and charges — a genuine achievement. MKUMBI II, which would go further, is described as "in final stages of completion" but was not enacted in this budget. Meanwhile, the budget adds new levies. This creates an asymmetry: the reform agenda trails the revenue agenda.
✅ Where Budget Aligns with FYDP IV
EV ecosystem incentives (duty cuts, VAT exemptions), duty remissions for strategic manufacturers (fibre, dairy, cotton), new income tax exemption for formalising businesses, LGA loan fund increase for youth/women entrepreneurs, expansion of TIPS digital payments, Islamic banking enabling framework, Strategic Petroleum Reserve investment, rural electrification (39,003 villages electrified), SGR Dar–Dodoma completed.
⚠️ Where Budget Partially Aligns
Higher excise on used vehicles may shift market toward new vehicles but raises transport costs. EAC CET adjustments protect local industries but increase input costs. Agricultural sector receives subsidies but also faces new withholding taxes. DIFC (Dar es Salaam International Financial Centre) announced as a concept — execution uncertain. Fuel subsidies protect consumers short-term but don't address structural energy dependence.
❌ Where Budget Contradicts FYDP IV
A blanket 8% excise duty rise affects all consumer goods producers. Customs processing fee rise to 1% increases cost of every import. New crop and livestock withholding taxes raise agricultural transaction costs. Motorcycle registration fee increase burdens the informal transport and delivery sector. No major business environment law (MKUMBI II) enacted. Capital development spending fell by 16.2% in absolute terms. The private sector enabling environment message is undermined.
Development Spending
How the Government Is Deploying Development Capital in 2025/26
The 2025/26 budget execution reveals substantial government investment in infrastructure — the foundation for private sector activity. SGR Dar–Dodoma completion, Julius Nyerere Hydropower Station (2,115 MW), and rural electrification stand out. These are FYDP IV-enabling investments.
✅ JNHPP (2,115 MW) commissioned; capacity now 4,522 MW
Industrial base critical
Rural Electrification (REA)
Bilioni 521.3
✅ 39,003 villages connected
Rural SME enabler
Education (VETA, student loans, primary)
Trilioni 1.58
✅ 284,487 student loans; 16.8M primary students
Human capital for FYDP IV
SGR Railway (Dar es Salaam – Dodoma)
Trilioni 1.12
✅ Completed & operational
Core logistics corridor
Water & Dam Projects
Bilioni 870.4
🔄 Kidunda dam (benefits 3 regions) in progress
Water security for agriculture & industry
Health Drugs & Infrastructure
Bilioni 681.7
🔄 Medicines procurement + facility upgrades
Healthy workforce for productivity
Debt Service (verified suppliers, contractors)
Bilioni 667.3
✅ Cleared domestic contractor arrears
Restores private sector trust
Sports Infrastructure (AFCON 2027 prep)
Bilioni 302.0
🔄 Stadia and facilities under construction
Tourism & services boost
✅
Infrastructure as Foundation: A Genuine Win
The government's completed SGR Dar–Dodoma line and the 2,115 MW JNHPP power station represent exactly the kind of public investment FYDP IV envisions from the 30% government share. Reliable power (now 4,522 MW capacity) and a modern rail corridor materially reduce the cost of doing business and are prerequisites for the private investment FYDP IV requires. These are the budget's most significant contributions to the 70/30 model.
Business & Investment Environment
Creating the Conditions for Private Investment: Progress & Gaps
FYDP IV demands an investment-grade business environment. The budget contains several positive announcements — DIFC, MKUMBI II (pending), Single Window Payment for regulators — but also acknowledges ongoing challenges with regulatory complexity, too many inspection agencies, and a proliferating fee structure that contradicts the open-for-business narrative.
1
MKUMBI I: 374 Fees & Charges Eliminated
The government's first Business Environment Improvement Programme reformed 55 laws, removing or reducing 374 fees. FDI rose from USD 14.1 billion (2018) to USD 21.7 billion (2024) over this period — partly attributed to these improvements. A genuine achievement that forms a baseline.
2
MKUMBI II: Announced but Not Yet Enacted
The second wave of business environment reform is described as "in its final stages of completion" in the 2026/27 budget speech. Until enacted, the new fee reductions and regulatory harmonisation it promises are unavailable — and the business environment actually faces new costs from 2026/27 tax measures.
3
Dar es Salaam International Financial Centre (DIFC) Announced
The government announced the creation of a Dar es Salaam International Financial Centre to attract foreign capital. This is a concept-stage announcement consistent with FYDP IV's ambition to reposition Tanzania as a regional business and financial hub. Execution details and timeline are pending.
4
Government Guarantee Fund Formally Corporatised
The previously Bank of Tanzania-managed Government Guarantee Funds are being corporatised into a single company. This should improve governance and access to guarantees for manufacturers producing for export — directly lowering borrowing costs for private investors.
5
Single Window Payment for Regulatory Fees (In Progress)
The government is developing a Single Window Payment System for all regulatory agency fees — a major simplification that would reduce the multiple compliance costs businesses face. Currently "in development." When live, this would significantly improve the business environment.
6
Digital Payments Expansion: TIPS System
The Tanzania Instant Payment System (TIPS) processed 651 million transactions worth TZS 54.95 trillion in 2025, up from TZS 29.82 trillion in 2024. Enhanced to allow cross-border remittances and QR code business payments. This infrastructure reduces the cost of commerce and expands financial inclusion — supporting the FYDP IV formalisation agenda.
Business & Investment Environment: Progress Tracker
EV duty cut, CNG VAT exemption, charging station incentives
Sector-Specific Analysis
Which Sectors Gain, and Which Face Higher Costs?
Not all sectors are treated equally. The budget offers targeted incentives in energy, manufacturing, and agriculture's upstream, while placing new cost pressures on transport, import-dependent trade, and the informal sector. Understanding the sector-level impact is essential for investors and business operators planning under the new regime.
Sector Policy Stance 2026/27
Budget Policy Score (+ve = favourable)
FDI Trend & Target
USD Billion — Actual & FYDP IV Aspirations
TIPS Digital Transactions Growth
Millions of Transactions / TZS Trillion Value
Measures
Net Investor Impact
FYDP IV Priority?
Rating
Energy & Clean Tech
EV import duty 25%→10%; EV charging VAT exemption; CNG full VAT exemption; EV battery duty remission
🟢 Broader financial market development; new Islamic products
High Priority
Positive
Real Estate & Construction
Waterproofing membrane duty relief; land rent revenue split to LGAs; EPZ/SEZ infrastructure fund
🟡 Some input cost relief; land formalisation incremental
Medium
Mixed
Consumer Goods / FMCG
8% blanket excise rise; beauty product excise to 15%; sugar levy TZS 10/kg; gambling excise 5%
🔴 Across-the-board cost increase for producers & consumers
Medium
Negative
TICGL Verdict: A Capable Budget in Tension With Its Own Plan
Tanzania's 2026/27 budget is technically sound: deficit discipline is maintained at 2.9% of GDP, domestic revenue collection exceeded targets in 2025/26, infrastructure investment is real and transformative, and global shocks are being managed with responsive policy. These are genuine strengths that should not be understated.
But evaluated against FYDP IV's 70/30 private-sector mandate — which is the exact plan this budget is supposed to implement — the picture becomes more complicated. FYDP IV is a private-sector-led plan in design. This budget is a revenue-maximisation plan in execution. Those objectives are not inherently contradictory, but they require careful sequencing: you cannot ask private investors to contribute TZS 324 trillion over five years while simultaneously raising the cost of importing, the cost of excisable goods, the cost of agricultural transactions, and the cost of vehicle ownership. The cumulative burden sends a conflicting signal.
The government's infrastructure record — SGR Dar–Dodoma completed, JNHPP 2,115 MW online, 39,003 villages electrified — is exactly what the public 30% of FYDP IV should deliver. The challenge is in the surrounding tax and regulatory environment. MKUMBI II remains unenacted, the DIFC is concept-stage, and the Single Window Payment System is still in development. Meanwhile, revenue measures are live from July 1, 2026.
For investors and businesses: watch the MKUMBI II enactment date, the DIFC framework law, the Single Window Payment rollout, and whether TAZARA revitalisation and SGR Dodoma–Mwanza extensions attract private co-investment. Those will determine whether 2026/27 is a transition year or a missed opportunity for the 70/30 promise.
B+
Macro Stability & Fiscal Discipline
A–
Infrastructure & Public Investment
C+
Private Sector Enabling Environment
C
FYDP IV 70/30 Policy Alignment
B
Clean Energy Transition
D+
Business Cost Reduction Agenda
Continue Your Research
TICGL Economic Intelligence — More on Tanzania's growth story, investment landscape, and live data tools
Tanzania National Debt Analysis 2026: TZS 132.9 Trillion Debt Stock | TICGL
🇹🇿 TICGL Debt Monitor · April 2026
Tanzania National Debt: TZS 132.9 Trillion — Structure, Risks & Sustainability
A data-driven breakdown of Tanzania's total debt position as of April 2026, covering external and domestic debt in Tanzanian Shillings, creditor composition, currency exposure, debt service flows, and long-term fiscal sustainability trends.
📅 Reference Date: April 2026💱 FX Rate Used: TZS 2,602 / USD (Apr-26 end-period)📊 Source: Bank of Tanzania · Ministry of Finance✍️ TICGL Research Desk
Total National Debt: TZS 132.9 Trillion as of April 2026
Tanzania's national debt encompasses all public and private external obligations plus central government domestic borrowing. Total debt reached TZS 132.9 trillion at end-April 2026, up from TZS 121.6 trillion in April 2025 — a year-on-year increase of TZS 11.3 trillion (9.3%). External debt continues to dominate, representing 70.4% of the total stock. The exchange rate used for USD-to-TZS conversions throughout this page is TZS 2,602 per USD (Bank of Tanzania end-April 2026 rate).
TZS 132.9T
Total Debt Apr-26
TZS 93.5T
External Debt (TZS equiv.)
TZS 39.3T
Domestic Debt
TZS 121.6T
Total Debt Apr-25 (prior year)
+TZS 11.3T
Year-on-Year Increase
National Debt Composition — April 2026
TZS Trillions | External vs Domestic | Source: Bank of Tanzania & Ministry of Finance
National Debt Stock Trend (April 2018 – April 2026)
TZS Trillions (converted at prevailing annual exchange rates) | Source: Bank of Tanzania
Monthly Total Debt Movement: April 2025 – April 2026 (TZS Trillions)
External debt converted using prevailing end-of-period exchange rates from BOT | Source: Bank of Tanzania
Debt Component
Apr-25 (TZS T)
Jun-25 (TZS T)
Sep-25 (TZS T)
Dec-25 (TZS T)
Feb-26 (TZS T)
Mar-26 (TZS T)
Apr-26 (TZS T)
YoY Change
External Debt (USD converted to TZS)
90.5
88.7
87.1
86.9
90.7
93.4
93.5
+3.3%
— USD Millions
33,764.5
34,053.0
34,953.6
35,023.9
35,343.0
35,886.2
35,949.6
+6.5%
— TZS/USD Rate Used
2,679.2
2,604.6
2,442.8
2,447.5
2,542.5
2,577.4
2,602.0
—
Domestic Debt (TZS Trillions)
34.8
35.6
40.1
40.3
39.7
38.4
39.3
+13.2%
Total National Debt (TZS Trillions)
121.6*
125.2*
132.8*
132.7*
130.0*
132.2*
132.9*
+9.3%
* Approximated using end-of-period exchange rates. Original BOT data in USD and TZS billions. Note: domestic debt stock in table excludes liquidity papers per BOT methodology.
External debt (public and private) stood at TZS 93.5 trillion (USD 35.9 billion) at end-April 2026. Public external debt accounted for 82.7% (TZS 77.3 trillion / USD 29.7 billion) of the total. Multilateral institutions remain the dominant creditor block, followed by commercial lenders. Transport & Telecommunication and Budget Support are the leading uses of disbursed external funds.
TZS 93.5T
Total External Debt (DOD)
TZS 77.3T
Public External Debt (82.7%)
TZS 15.1T
Private Sector External Debt
TZS 630.0B
Debt Service Paid — Apr-26
TZS 5.7T
Total External Debt Arrears
External Debt by Creditor Category (April 2026)
TZS Trillions (USD × TZS 2,602) | Source: Ministry of Finance & Bank of Tanzania
External Debt by Borrower Category (April 2026)
TZS Trillions | Source: Ministry of Finance & Bank of Tanzania
The combined share of Transport & Telecommunications (22.4%) and Budget/BoP Support (22.3%) constitutes nearly 45% of Tanzania's entire external disbursed debt — totalling TZS 41.8 trillion. This reflects the government's sustained investment in infrastructure (particularly TAZARA, port development, and road networks) alongside reliance on balance of payments support from multilateral partners. The declining share of Energy & Mining (from 12.9% to 12.0%) warrants monitoring given Tanzania's ongoing energy infrastructure needs under FYDP IV. Social sector allocations at 19.3% remain the third-largest use of external funds, consistent with Tanzania's development priorities.
Section 3 — Currency Risk
Currency Composition of External Debt: USD Dominance at 66.0%
Tanzania's external debt is heavily concentrated in US Dollars, which constituted 66.0% of disbursed outstanding debt in April 2026. This creates significant exchange rate exposure — every 1% depreciation of the TZS against the USD increases the TZS value of external debt by approximately TZS 617 billion.
Currency Composition of External Debt — April 2026
% share of disbursed outstanding debt | Source: Ministry of Finance & Bank of Tanzania
% share across periods | Source: Ministry of Finance & Bank of Tanzania
Currency
Apr-25 Share (%)
Apr-25 (USD Mn equiv.)
Apr-25 (TZS T)
Feb-26 Share (%)
Apr-26 Share (%)
Apr-26 (USD Mn equiv.)
Apr-26 (TZS T)
FX Risk Level
US Dollar (USD)
66.6
22,487.2
60.2
66.3
66.0
23,727.0
61.7
HIGH
Euro (EUR)
17.4
5,874.9
15.7
17.6
17.7
6,363.1
16.6
MEDIUM
Chinese Yuan (CNY)
6.4
2,160.9
5.79
6.5
6.6
2,372.6
6.17
MEDIUM
Other Currencies
9.7
3,275.2
8.77
9.7
9.7
3,487.1
9.07
LOW-MED
Total External Debt
100.0
33,764.5
90.5
100.0
100.0
35,949.6
93.5
—
⚠️ TICGL Currency Risk Assessment
With 66.0% of external debt denominated in USD (TZS 61.7 trillion), Tanzania faces concentrated currency risk. However, the Tanzanian Shilling has actually appreciated 2.7% against the USD year-on-year as of April 2026 (TZS 2,612 vs TZS 2,684), which reduces the TZS burden of debt service in the near term. The 6.6% Chinese Yuan share (TZS 6.2 trillion) largely reflects infrastructure financing from Chinese institutions. Euro-denominated debt at 17.7% (TZS 16.6 trillion) primarily corresponds to multilateral and bilateral European creditors. Sustained foreign exchange reserve adequacy (4.4 months import cover) provides an important buffer against currency shock transmission.
Section 4 — Domestic Debt
Domestic Debt: TZS 39.3 Trillion — Bonds Dominate at 80.8%
Government domestic debt reached TZS 39.3 trillion at end-April 2026, a 2.3% increase from March 2026 and a 13.2% rise from April 2025. The increase was driven primarily by expansion of the overdraft facility (+15.0% in April alone). Government bonds constitute the largest instrument at TZS 31.8 trillion (80.8%), reflecting Tanzania's shift toward longer-term domestic financing.
TZS 39.3T
Total Domestic Debt Apr-26
TZS 31.8T
Government Bonds (80.8%)
TZS 5.9T
Overdraft / Non-Securitized
TZS 1.52T
Treasury Bills (3.9%)
+TZS 4.6T
YoY Increase from Apr-25
Domestic Debt by Instrument — April 2026
TZS Trillions | Source: Ministry of Finance & Bank of Tanzania
Domestic Debt by Creditor Category — April 2026
TZS Trillions | Source: Ministry of Finance & Bank of Tanzania
Domestic Debt Stock Trend — April 2018 to April 2026 (TZS Trillions)
Absolute stock and year-on-year growth | Source: Ministry of Finance & Bank of Tanzania
Instrument
Apr-25 (TZS T)
Apr-25 Share (%)
Mar-26 (TZS T)
Apr-26 (TZS T)
Apr-26 Share (%)
MoM Change
YoY Change
Government Securities (total)
29.6
85.1%
33.3
33.4
85.0%
+0.3%
+13.2%
Treasury Bills
1.94
5.6%
1.58
1.52
3.9%
−3.6%
−21.6%
Government Bonds
27.5
79.0%
31.6
31.8
80.8%
+0.5%
+15.7%
Government Stocks
0.19
0.5%
0.14
0.14
0.4%
0.0%
−27.1%
Tax Certificates
0.0
0.0%
0.0
0.0
0.0%
—
—
Non-Securitized Debt (Overdraft)
5.16
14.9%
5.13
5.90
15.0%
+15.0%
+14.3%
TOTAL DOMESTIC DEBT
34.8
100%
38.4
39.3
100%
+2.3%
+13.2%
Creditor Category
Apr-25 (TZS T)
Apr-25 Share (%)
Mar-26 (TZS T)
Apr-26 (TZS T)
Apr-26 Share (%)
YoY Change
Commercial Banks
10.0
28.9%
10.9
11.1
28.1%
+10.0%
Pension Funds
9.2
26.4%
10.5
10.4
26.5%
+13.3%
Bank of Tanzania
7.1
20.5%
6.9
7.7
19.6%
+8.4%
Others (incl. individuals, public inst.)
6.0
17.3%
7.3
7.3
18.7%
+22.1%
Insurance Companies
1.86
5.3%
2.0
2.0
5.1%
+8.3%
BOT Special Funds
0.56
1.6%
0.79
0.80
2.0%
+41.5%
TOTAL
34.8
100%
38.4
39.3
100%
+13.2%
📊 TICGL Domestic Debt Observation
The 15.0% single-month jump in the overdraft (non-securitized) debt in April 2026 — rising from TZS 5.1 trillion to TZS 5.9 trillion — deserves attention. Overdraft utilization signals short-term government cash flow pressures, even when overall revenue performance is strong. Commercial banks remain the largest single domestic creditor at TZS 11.1 trillion (28.1%), closely followed by pension funds at TZS 10.4 trillion (26.5%). The growth of government bond stock to TZS 31.8 trillion over the year reflects active domestic capital market development. Treasury yields have declined significantly — 10-year bond WAY fell from 14.26% (April 2025) to 9.40% (April 2026) — indicating strong investor demand and improving sovereign risk perception.
Section 5 — Debt Service
Debt Service Flows: External & Domestic Obligations
External debt service payments in April 2026 totalled TZS 630 billion (USD 242 million), comprising TZS 495 billion (USD 190.4 million) in principal repayments and TZS 135 billion (USD 51.7 million) in interest payments. For the full FY2025/26 budget, total domestic interest payments are budgeted at TZS 6.5 trillion, of which TZS 4.1 trillion had been paid by end-March 2026.
TZS 630.0B
External Debt Service — Apr-26
TZS 495.0B
External Principal Repaid — Apr-26
TZS 135.0B
External Interest Paid — Apr-26
TZS 1,436.1B
Domestic Debt Service — Apr-26
TZS 6.5T
Budget for Interest Payments FY25/26
Monthly External Debt Service Payments (Apr 2025 – Apr 2026)
TZS Billions (USD × end-period exchange rate) | Source: Bank of Tanzania
Domestic Debt Service: FY2025/26 Budget vs Actual (Jul–Mar 2026)
TZS Billions | Source: Ministry of Finance
Period
Total Service (USD Mn)
Total Service (TZS B)
Principal (USD Mn)
Principal (TZS B)
Interest (USD Mn)
Interest (TZS B)
Apr-25
155.5
416.7
142.3
381.3
13.2
35.4
May-25
404.7
1,087.0
286.2
768.9
118.4
318.1
Jun-25
259.1
674.9
185.4
482.6
73.7
191.9
Jul-25
122.3
311.2
92.7
235.9
29.6
75.3
Aug-25
85.6
210.8
32.9
81.1
52.6
129.6
Sep-25
130.9
319.9
75.3
184.0
55.6
135.9
Oct-25
344.3
843.9
262.0
642.2
82.3
201.8
Nov-25
110.1
268.2
76.4
186.0
33.7
82.1
Dec-25
183.5
449.1
136.8
334.8
46.7
114.3
Jan-26
99.0
249.3
81.5
205.2
17.5
44.1
Feb-26
100.8
256.3
35.4
90.0
65.4
166.2
Mar-26
129.5
333.8
60.0
154.6
69.5
179.1
Apr-26
242.0
630.0
190.4
495.0
51.7
135.0
Section 6 — Arrears
External Debt Arrears: TZS 5.7 Trillion as of April 2026
Total external debt arrears stood at USD 2,191.9 million (TZS 5.70 trillion) at end-April 2026, comprising TZS 4.33 trillion in principal arrears and TZS 1.37 trillion in interest arrears. Commercial lenders account for the largest share of arrears at 60.1% of principal arrears. Multilateral arrears (largely private sector obligations) remain relatively contained.
TZS 5.70T
Total External Arrears Apr-26
TZS 4.33T
Principal Arrears
TZS 1.37T
Interest Arrears
TZS 3.31T
Commercial Arrears (Principal)
Arrears by Creditor — April 2026 (TZS Billions)
Principal + Interest components | Source: Bank of Tanzania
Total arrears converted at end-period exchange rates | Source: BOT
Arrear Type
Apr-25 (USD Mn)
Apr-25 (TZS B)
Mar-26 (USD Mn)
Apr-26 (USD Mn)
Apr-26 (TZS B)
Change Apr-25 to Apr-26
Principal Arrears (Total)
1,452.1
3,890
1,609.4
1,665.5
4,333
+14.7%
— Bilateral
157.0
421
188.0
189.2
492
+20.5%
— Multilateral
53.0
142
2.0
7.9
21
−85.1%
— Commercial
1,021.1
2,736
1,226.3
1,273.0
3,312
+24.7%
— Export Credits
221.1
593
193.1
195.4
508
−11.6%
Interest Arrears (Total)
671.6
1,799
507.9
526.3
1,369
−21.6%
— Bilateral
78.0
209
80.0
80.1
208
+2.7%
— Multilateral
33.8
91
23.2
24.2
63
−28.4%
— Commercial
383.8
1,028
349.4
365.1
950
−4.9%
— Export Credits
176.1
472
55.3
56.9
148
−67.7%
TOTAL Arrears
2,123.7
5,689
2,117.3
2,191.9
5,703
+3.2%
🔴 TICGL Risk Alert: Commercial Arrears Rising
Principal arrears to commercial lenders increased by 24.7% year-on-year to TZS 3,312 billion (USD 1,273 million). Commercial lenders now account for 76.5% of total principal arrears (up from 70.3% in April 2025). While interest arrears to export credit agencies have declined significantly (−67.7% y/y), the persistent growth in commercial principal arrears signals potential refinancing risks and could affect Tanzania's access to international capital markets. TICGL recommends that policymakers prioritise commercial creditor arrears resolution as part of the broader debt management strategy under FYDP IV.
Section 7 — Fiscal Sustainability
Long-Term Debt Sustainability: GDP Ratios & Selected Indicators
Tanzania's budget deficit remained relatively contained at approximately 3.0% of GDP in FY2024/25, reflecting the government's fiscal consolidation effort. External debt as a share of GDP has increased over recent years, requiring sustained attention to debt composition and maturity profiles.
Source: Bank of Tanzania Selected Economic Indicators Table A1
Indicator
2018
2019
2020
2021
2022
2023
2024r
2025p
GDP Growth (Constant 2015 Prices, %)
7.0
6.9
4.5
4.8
4.7
5.1
5.5
6.0
Annual Inflation (%)
3.5
3.4
3.3
3.7
4.3
3.8
3.1
3.3
Current Revenue to GDP (%)
14.8
14.3
15.0
13.7
14.9
15.0
14.7
15.6
Development Expenditure to GDP (%)
6.6
6.5
7.1
7.8
9.2
7.4
7.2
6.9
Overall Budget Balance to GDP (%)
−1.9
−3.3
−1.9
−4.0
−3.6
−3.1
−3.1
−3.0
External Debt Stock (USD Billion)
20.5
21.9
23.0
25.5
27.8
30.3
32.0
34.8
External Debt (TZS Trillion, approx.)
46.4
50.1
52.8
58.6
64.1
72.2
83.1
88.3
Gross Foreign Reserves (USD Bn)
5.0
5.6
4.8
6.4
5.2
5.5
5.5
6.3
Import Cover (Months)
4.9
6.4
5.6
6.6
4.7
4.5
4.5
4.9
Private Sector Credit to GDP (%)
14.3
14.6
14.0
14.3
16.0
17.0
17.4
21.6
📊 TICGL Sustainability Assessment
Several positive signals support Tanzania's debt sustainability outlook: GDP growth is accelerating (6.0% in 2025), the current revenue-to-GDP ratio improved to 15.6% in FY2024/25, foreign reserves reached USD 6.3 billion (4.9 months of import cover), and the budget deficit remained at 3.0% of GDP — within EAC and SADC convergence benchmarks. However, the rapid growth of domestic debt (+13.2% year-on-year) and the increase in commercial arrears call for continued vigilance. The decline in Treasury yields (10-year bond WAY from 14.26% to 9.40% over 12 months) reflects improved market confidence but also indicates rising financing volumes through the domestic market that need careful management to avoid crowding out private sector credit.
📚 Further Reading from TICGL Research
Explore related economic analyses and tools from Tanzania's leading investment research advisory firm.
Data Sources & Attribution:
1. Bank of Tanzania (BOT). Monthly Economic Review, May 2026. Tables A10 (National Debt Developments), A1 (Selected Economic Indicators), A2 (Central Government Operations). Available at: www.bot.go.tz
2. Ministry of Finance, United Republic of Tanzania. Central Government Operations Data, FY 2025/26.
3. Exchange rate for USD-to-TZS conversions: TZS 2,602/USD (Bank of Tanzania end-April 2026 rate); monthly conversions use respective end-of-period rates from Table A10. Currency Conversion Methodology: External debt figures (originally reported in USD millions by Bank of Tanzania) have been converted to TZS trillions and billions using end-of-period exchange rates from BOT Table A10. Figures may differ slightly from official TZS-denominated statements due to rounding. 1 Trillion TZS = 1,000 Billion TZS. Disclaimer: This analysis is produced by TICGL Research for informational purposes only. It does not constitute investment or financial advice. All underlying data sourced from official Tanzanian government and central bank publications.
Tanzania Government Domestic Debt by Creditor Category 2025–2026 | TICGL Economic Intelligence
TICGL Economic Intelligence · Tanzania Fiscal Analysis
Tanzania Government Domestic Debt by Creditor Category — 2025 to April 2026
Tanzania's government domestic debt reached TZS 39.3 trillion in April 2026 — a 13.2% increase from April 2025. Who holds this debt? How is it distributed across commercial banks, the Bank of Tanzania, pension funds, insurance companies, and other creditors? And what are the fiscal, monetary and systemic implications of each creditor group's exposure?
Total Domestic Debt: TZS 39.3 TrillionYoY Growth: +13.2%Source: BOT Monthly Economic Review May 2026Reference: April 2026
Commercial Banks
Bank of Tanzania
Pension Funds
Insurance Companies
BOT Special Funds
Others (incl. public institutions, private cos., individuals, non-residents)
TZS 39.3T
Total Domestic Debt
April 2026
+13.2%
YoY Growth
Apr 2025 → Apr 2026
28.1%
Commercial Banks
TZS 11.05T — largest creditor
26.5%
Pension Funds
TZS 10.43T — 2nd largest
19.6%
Bank of Tanzania
TZS 7.71T
5.1%
Insurance
TZS 2.01T
2.0%
BOT Special Funds
TZS 0.80T
18.7%
Others
TZS 7.34T
SECTION 01
Six Creditor Groups — Who Holds Tanzania's Domestic Debt?
Tanzania's TZS 39.3 trillion domestic debt stock is distributed across six distinct creditor categories, each with different risk appetites, mandates, and systemic implications. The dominance of domestic institutional investors (banks and pension funds) is both a sign of a deepening financial market and a source of concentration risk.
🏦
Commercial Banks
28.1%
TZS 11,052.2 billion (April 2026)
↑ +10.0% YoY from TZS 10,049.9B
Commercial banks hold government securities primarily as liquid, risk-free assets meeting capital and liquidity requirements. Largest single creditor group by absolute amount.
🏛️
Bank of Tanzania (BOT)
19.6%
TZS 7,706.3 billion (April 2026)
↑ +8.2% YoY from TZS 7,119.2B
BOT holds government debt through Open Market Operations, reverse repo collateral, and direct overdraft facilities to government. BOT holdings represent monetary financing risk.
👴
Pension Funds
26.5%
TZS 10,426.4 billion (April 2026)
↑ +13.7% YoY from TZS 9,171.1B
Pension funds (NSSF, PPF, GEPF, etc.) are mandated to invest in government securities. Their long-duration liability profile makes them natural holders of government bonds. Second largest group.
🛡️
Insurance Companies
5.1%
TZS 2,012.5 billion (April 2026)
↑ +8.3% YoY from TZS 1,858.4B
Insurance firms invest premium reserves in government securities per regulatory requirements. Steady, modest growth reflecting gradual insurance sector deepening in Tanzania.
💎
BOT Special Funds
2.0%
TZS 798.4 billion (April 2026)
↑ +41.4% YoY from TZS 564.5B
Specialised investment pools managed by BOT including heritage and development funds. Fastest growing creditor category in percentage terms (+41.4% YoY), though smallest by absolute amount.
🌐
Others
18.7%
TZS 7,339.8 billion (April 2026)
↑ +22.4% YoY from TZS 5,996.8B
Includes public institutions, private companies, non-resident investors, and individuals. This group recorded the highest absolute growth, suggesting broadening investor base or rising non-resident participation.
+8.3% YoY | Regulatory capital reserve investments
💎 BOT Special FundsTZS 798.4B 2.0%
+41.4% YoY | Fastest percentage growth — smallest by amount
SECTION 02
Creditor Share Composition — April 2025 vs April 2026
Comparing the creditor composition between April 2025 and April 2026 reveals a shift: pension funds and the "Others" category have grown their share while commercial banks have slightly declined, reflecting broadening of Tanzania's domestic investor base.
Creditor Composition — April 2025 (TZS 34,759.9B)
Creditor Composition — April 2026 (TZS 39,335.8B)
Share Change by Creditor — April 2025 vs April 2026 (percentage points)
Shift in creditor landscape: The "Others" category recorded the largest share increase (+0.9pp), followed by Pension Funds (+0.4pp) and BOT Special Funds (+0.4pp). Commercial Banks' share declined 0.8pp — not because they hold less, but because other creditors grew faster. This reflects a gradual diversification of Tanzania's domestic creditor base.
SECTION 03
Growth Trends — Each Creditor Category Over Time
Tracking each creditor's absolute holdings (TZS billions) across April 2025, March 2026, and April 2026 reveals which groups are expanding exposure to government debt fastest — and which are consolidating. BOT special funds lead in growth rate while commercial banks lead in absolute volume.
Domestic Debt by Creditor — Absolute Holdings (TZS Billions): April 2025, March 2026, April 2026
YoY Growth Rate by Creditor (Apr 2025 → Apr 2026)
BOT Special Funds: Despite being the smallest creditor group, they recorded the fastest YoY growth at +41.4%. "Others" grew +22.4%, and Pension Funds grew +13.7%. Together these three groups account for the majority of the debt stock expansion.
Absolute Increase (TZS Billions) — Apr 2025 to Apr 2026
Absolute leaders: "Others" added TZS 1,343B (+22.4%), Pension Funds added TZS 1,255.3B (+13.7%), and Commercial Banks added TZS 1,002.3B (+10.0%). In absolute terms, these three groups drove the bulk of Tanzania's domestic debt expansion.
Commercial Banks — Holdings (TZS B)
Bank of Tanzania — Holdings (TZS B)
Pension Funds — Holdings (TZS B)
Insurance Companies — Holdings (TZS B)
BOT Special Funds — Holdings (TZS B)
Others — Holdings (TZS B)
SECTION 04
Debt Instruments — What Form Does the Domestic Debt Take?
Understanding which instruments make up Tanzania's domestic debt is as important as knowing who holds them. Government bonds dominate (80.8% of the total), with overdraft/non-securitised debt rising to 15.0%. Treasury bills have declined sharply, signalling a deliberate shift toward longer-duration, lower-rollover-risk financing.
Domestic Debt by Instrument — April 2026 (TZS Billions)
Instrument Composition Change — April 2025 vs April 2026
Key Debt Instruments — April 2025 vs March 2026 vs April 2026 (TZS Billions)
Overdraft concern: The government's overdraft at BOT surged from TZS 5,159.1B (April 2025) to TZS 5,897.6B (April 2026) — a TZS 738.5B (+14.3%) increase. Overdraft represents the most expensive and least transparent form of monetary financing, signalling short-term cash-flow pressures in the budget execution cycle.
SECTION 05
Month-by-Month Domestic Debt Stock — April 2025 to April 2026
The total domestic debt stock trajectory from April 2025 through April 2026, showing the pace and seasonality of government domestic borrowing. The steady upward trend reflects consistent budget financing needs, with the March 2026 acceleration driven by large bond issuances.
Total Domestic Debt Stock — Monthly (TZS Billions), April 2025 – April 2026
Trend: Domestic debt grew from TZS 34,759.9B (April 2025) to TZS 39,335.8B (April 2026), adding TZS 4,575.9B over 12 months. The growth was not linear — a pronounced acceleration occurred in August–October 2025 (coinciding with large T-Bond auctions and overdraft utilisation) and again in March–April 2026.
Government Securities vs Non-Securitised Debt — Monthly (TZS Billions)
Monthly Debt Issuance — T-Bills vs T-Bonds (TZS Billions)
Bonds dominate: In April 2026, the government raised TZS 392.3B — TZS 245.1B in bonds vs TZS 147.2B in T-bills. Consistent bond-heavy issuance reflects a deliberate strategy to extend the maturity profile of domestic debt and reduce rollover risk.
SECTION 06
Crowding-Out Analysis — Does Government Borrowing Displace Private Credit?
One of the most important fiscal policy questions: does the government's domestic borrowing programme crowd out credit to the private sector? The evidence from Tanzania's 2025–2026 data presents a nuanced picture — private sector credit is growing strongly (23.6% YoY), but T-bill yields have declined sharply, suggesting crowding-out is not yet a dominant concern.
Private Sector Credit Growth vs Government Domestic Debt Growth (% YoY) — Selected Periods
No crowding-out evidence in 2026: Private sector credit grew 23.6% YoY in April 2026, compared to domestic debt growing 13.2%. The spread of private credit growth over government debt growth has widened. T-bill yields declining from 8.86% (April 2025) to 5.06% (April 2026) further indicates the market is comfortably absorbing both demands. However, the sustained 13%+ domestic debt growth warrants monitoring.
Commercial Bank Asset Allocation — Government Securities vs Private Credit Share (%)
Banks' choice: Commercial banks hold 28.1% of domestic debt (TZS 11.05T) while also growing private credit by 23.6%. The government securities portfolio (TZS 10.66T held as securities) represents about 22% of total banking system domestic claims — a meaningful but not dominant position.
Treasury Bill Yields — Declining as Demand Outpaces Supply (%)
Oversubscribed auctions: T-Bill auctions in April 2026 attracted TZS 859.5B in bids against a TZS 429.8B tender — 2x oversubscribed. This forced yields down to 5.06% (overall T-bill rate), indicating strong demand for government paper and no crowding-out pressure.
SECTION 07
Systemic Risks by Creditor Category
Each creditor group's large exposure to government securities creates distinct systemic risks. For the banking sector, it creates sovereign-bank nexus risk. For pension funds, it concentrates pensioners' savings in a single sovereign issuer. For BOT, it blurs monetary and fiscal policy boundaries.
Commercial Banks · 28.1%
Sovereign-Bank Nexus Risk
Banks holding large amounts of government debt create a two-way risk channel: fiscal stress would impair bank balance sheets, potentially triggering a financial sector crisis. Tanzania's banks hold ~22% of assets in government securities.
Risk level: Medium — mitigated by adequate capital buffers and declining T-bill yields
Bank of Tanzania · 19.6%
Monetary Financing & Overdraft Risk
BOT holding TZS 7.7T including TZS 5.9T in overdraft (non-securitised) represents direct monetary financing of the budget deficit — a practice that, if excessive, can undermine the CBR inflation targeting framework and erode central bank independence.
Risk level: Medium-High — overdraft growing faster than securitised debt
Pension Funds · 26.5%
Pensioner Asset Concentration Risk
Tanzania's pension funds holding 26.5% of domestic debt concentrates pensioners' long-term savings in a single sovereign issuer. While government bonds are theoretically risk-free in local currency, fiscal dominance or inflation can erode real returns. Limited alternative investment options drive this concentration.
Risk level: Medium — pension funds need diversification into infrastructure and equities
Insurance Companies · 5.1%
Insurance Sector Liquidity Risk
Insurance companies' heavy reliance on government bonds for reserve investment creates duration mismatch risk if claim payments accelerate (e.g. catastrophic events). The sector's 8.3% YoY growth in government holdings is in line with premium growth — currently manageable.
Risk level: Low — sector remains small relative to banking and pensions
BOT Special Funds · 2.0%
Governance & Transparency Risk
The 41.4% YoY growth of BOT special fund holdings — without clear public disclosure of fund mandates — raises governance questions. If special funds are used to indirectly support government financing outside normal budget processes, this could distort fiscal transparency.
Risk level: Medium — transparency and mandate disclosure needed
Others · 18.7%
Non-Resident Rollover Risk
The "Others" category — which may include non-resident investors — grew fastest in absolute terms (+TZS 1,343B, +22.4% YoY). Non-resident holdings of domestic currency bonds introduce rollover risk if sentiment shifts and investors choose not to roll over maturing bonds, creating sudden financing pressure.
Risk level: Medium — contingent on composition of non-resident vs domestic "others"
Risk Profile Summary — All Creditor Categories
SECTION 08
Complete Data Reference Tables
Full data from the Bank of Tanzania Monthly Economic Review May 2026, Table 2.6.6 — Government Domestic Debt by Creditor Category.
Government Domestic Debt by Creditor Category — April 2025, March 2026, April 2026 (TZS Billions)
Creditor Category
Apr 2025 (TZS B)
Apr 2025 Share
Mar 2026 (TZS B)
Mar 2026 Share
Apr 2026 (TZS B)
Apr 2026 Share
YoY Change (TZS B)
YoY Growth %
Direction
🏦 Commercial Banks
10,049.9
28.9%
10,925.8
28.4%
11,052.2
28.1%
+1,002.3
+10.0%
↑ Growing
🏛️ Bank of Tanzania
7,119.2
20.5%
6,935.5
18.0%
7,706.3
19.6%
+587.1
+8.2%
↑ Growing
👴 Pension Funds
9,171.1
26.4%
10,463.9
27.2%
10,426.4
26.5%
+1,255.3
+13.7%
↑↑ Fast growth
🛡️ Insurance
1,858.4
5.3%
1,997.1
5.2%
2,012.5
5.1%
+154.1
+8.3%
↑ Steady
💎 BOT Special Funds
564.5
1.6%
788.4
2.1%
798.4
2.0%
+233.9
+41.4%
↑↑↑ Fastest %
🌐 Others
5,996.8
17.3%
7,337.0
19.1%
7,339.8
18.7%
+1,343.0
+22.4%
↑↑ Fastest abs.
TOTAL Domestic Debt
34,759.9
100%
38,447.9
100%
39,335.8
100%
+4,575.9
+13.2%
↑ Expanding
Government Domestic Debt by Borrowing Instrument — April 2025, March 2026, April 2026 (TZS Billions)
Instrument
Apr 2025 (TZS B)
Apr 2025 Share
Mar 2026 (TZS B)
Apr 2026 (TZS B)
Apr 2026 Share
YoY Change
YoY Growth %
Government Securities (Total)
29,582.4
85.1%
33,321.1
33,438.1
85.0%
+3,855.7
+13.0%
— Treasury Bills (35/91/182/364-day)
1,935.6
5.6%
1,575.3
1,518.7
3.9%
−416.9
−21.5%
— Government Stocks
187.1
0.5%
135.7
135.7
0.3%
−51.4
−27.5%
— Government Bonds (2yr, 5yr, 7yr, 10yr, 15yr, 20yr, 25yr)
27,459.6
79.0%
31,609.9
31,783.7
80.8%
+4,324.1
+15.7%
— Tax Certificates
0.1
0.0%
0.1
0.1
0.0%
—
—
Non-Securitised Debt
5,177.5
14.9%
5,126.8
5,897.6
15.0%
+720.1
+13.9%
— Overdraft at BOT
5,159.1
14.8%
5,126.8
5,897.6
15.0%
+738.5
+14.3%
TOTAL Domestic Debt
34,759.9
100%
38,447.9
39,335.8
100%
+4,575.9
+13.2%
Monthly Domestic Debt Stock (TZS Billions) — April 2025 to April 2026 (from BOT Appendix Table 2.6.6)
Month
Commercial Banks
Bank of Tanzania
Pension Funds
Insurance
BOT Special Funds
Others
TOTAL (TZS B)
Apr-25
10,049.9
7,119.2
9,171.1
1,858.4
564.5
5,996.8
34,759.9
Mar-26
10,925.8
6,935.5
10,463.9
1,997.1
788.4
7,337.0
38,447.9
Apr-26
11,052.2
7,706.3
10,426.4
2,012.5
798.4
7,339.8
39,335.8
YoY Change
+1,002.3
+587.1
+1,255.3
+154.1
+233.9
+1,343.0
+4,575.9
YoY Growth %
+10.0%
+8.2%
+13.7%
+8.3%
+41.4%
+22.4%
+13.2%
SECTION 09
Outlook — Domestic Debt Creditor Dynamics: What to Watch in 2026
Tanzania's domestic debt market is deepening, with more creditor groups actively participating. However, the rising overdraft, the concentration of pension fund assets in sovereign bonds, and the pace of total debt growth are critical variables for the remainder of 2026.
✔ Positive Signals
→Oversubscribed T-bill auctions (2× in April 2026) show strong domestic demand for government paper — no financing constraint in the near term
→T-bill yields falling to 5.06% (April 2026) from 8.86% (April 2025) — government borrowing costs declining, easing interest payment burden
→Shift to long-tenor bonds (80.8% of debt in government bonds) reduces rollover risk and aligns debt maturity with infrastructure asset lives
→Private credit not crowded out — growing 23.6% YoY alongside 13.2% domestic debt growth; banking sector liquidity remains adequate
→Broadening investor base — "Others" category fastest absolute growth (+22.4%) may indicate non-resident participation and market development
→Overdraft growing 14.3% YoY to TZS 5.9T — overdraft at BOT is the least disciplined form of financing, signalling budget execution cash-flow gaps
→Pension fund concentration — TZS 10.4T (26.5% of domestic debt) in pension fund hands creates systemic risk if government faces debt restructuring pressures in the future
→Interest payments rising — TZS 379B in interest payments (March 2026 alone), down from estimate but still a significant recurrent budget line item
→Domestic debt stock growing faster than GDP — at 13.2% YoY, domestic debt growth outpaces Tanzania's nominal GDP growth of ~10%, pointing to a rising domestic debt/GDP ratio
→BOT monetary-fiscal boundary — BOT holdings of TZS 7.7T including overdraft risks undermining inflation targeting credibility if the government relies more heavily on monetary financing
→5-yr & 10-yr bond yields declining (9.54% and 9.40% April 2026) may not adequately compensate longer-term investors for duration and inflation risks
Creditor Category Holdings — Projected Trajectory vs Current (TZS Billions)
Bottom line for investors and policymakers: Tanzania's domestic debt market is functioning well — oversubscribed auctions, falling yields, and no crowding-out signal a healthy market. However, the structural risks of pension fund concentration, BOT overdraft growth, and the speed of total debt expansion (13.2% YoY) require monitoring. The most critical action needed: reduce the BOT overdraft by converting it to marketable securities, and develop more pension fund investment options beyond sovereign bonds.
Data Source: Bank of Tanzania — Monthly Economic Review, May 2026, Table 2.6.5 (Domestic Debt by Borrowing Instrument) and Table 2.6.6 (Domestic Debt by Creditor Category). | All figures in TZS Billions unless stated. Figures marked 'p' are provisional. | Analysis: TICGL Economic Intelligence Unit, June 2026.
Tanzania External Debt Analysis 2026: Stock by Borrower, Use of Funds & Currency Composition | TICGL
💰 TICGL Debt Intelligence
Tanzania External Debt Deep-Dive Analysis — April 2026
A detailed examination of Tanzania's external debt stock by borrower category, disbursed outstanding debt by use of funds, currency composition, and creditor structure — drawn from the Bank of Tanzania Monthly Economic Review, May 2026 and Ministry of Finance data.
📅 Reference Date: End of April 2026📖 Source: BOT MER May 2026 | Ministry of Finance🏢 TICGL Research Unit
USD 35,949.6M
Total External Debt Stock
▲ +0.5% from Mar-26
USD 29,717.5M
Central Govt External Debt
82.7% of public DOD
USD 6,232.1M
Private Sector External Debt
17.3% of total DOD
58.3%
Multilateral Creditor Share
Largest creditor group
66.0%
USD-Denominated Debt
Currency concentration risk
22.4%
Transport & Telecom (Use of Funds)
Largest sector, ▲ from 21.5%
USD 51,067.2M
Total National Debt Stock
External 70.4% | Domestic 29.6%
1
External Debt Overview & Total National Debt
Tanzania's total national debt stock reached USD 51,067.2 million at the end of April 2026, a 0.5% increase from USD 50,803.5 million at the end of March 2026. External debt accounts for 70.4% of the total national debt stock, with domestic debt comprising the remaining 29.6%.
The external debt stock (public and private) stood at USD 35,949.6 million at the end of April 2026. Of this, public external debt — that is, obligations of the central government and public corporations — represented 82.7%, while the private sector held the remaining 17.3%. During April 2026, external loans disbursed amounted to USD 54 million, mainly to the central government, while external debt service payments totalled USD 242 million, of which USD 190.4 million was for principal repayments.
Total National Debt
USD 51,067.2M
End of April 2026 | ▲ 0.5% from Mar-26
External Debt (70.4%)
USD 35,949.6M
Public + Private. DOD = USD 35,423.2M
Domestic Debt (29.6%)
TZS 39,335.8B
≈ USD 15,117.6M. ▲ 2.3% from Mar-26
Apr-26 Disbursements
USD 54.0M
Mainly to central government
Apr-26 Debt Service
USD 242.0M
Principal USD 190.4M | Interest USD 51.7M
National Debt Composition — April 2026
Source: Ministry of Finance and BOT, Table A10
Total External Debt Stock — Monthly Trend (USD Millions)
Source: BOT MER May 2026, Table A10
2
External Debt Stock by Borrower Category
Tanzania's external debt is classified by borrower into three main categories: Central Government, Public Corporations, and Private Sector. As of April 2026, the central government remains the dominant external borrower with a disbursed outstanding debt (DOD) of USD 29,717.5 million — representing 82.4% of total disbursed external debt. This reflects Tanzania's strategy of centralising external borrowing for development financing under the central government's authority.
Public corporations — which include entities such as TANESCO, ATCL, TRC, TPA, TFC, and DAWASA — recorded zero outstanding external debt as at April 2026, indicating that all outstanding obligations of these entities have been cleared or transferred. The private sector holds USD 5,785.9 million in disbursed external debt, representing 16.1% of the total — a significant share reflecting the growing role of private investment and PPP financing in Tanzania's development.
82.4%
Central Government
USD 29,717.5M (DOD)
▲ from 80.9% (Apr-25)
16.1%
Private Sector
USD 5,785.9M (DOD)
▼ from 17.3% (Apr-25)
1.5%
Interest Arrears
USD 526.3M
Commercial & Bilateral
0.0%
Public Corporations
USD 0M (DOD)
Cleared
DOD by Borrower — April 2026 vs April 2025 (USD Millions)
Source: Ministry of Finance and BOT, Table 2.6.1 and Table A10
Borrower Share of Total DOD — April 2026 (%)
Source: BOT MER May 2026, Table 2.6.1
External Debt Stock by Borrower — Detailed Table (USD Millions)
Borrower
Apr-25 Amount
Apr-25 Share %
Mar-26 Amount
Mar-26 Share %
Apr-26 Amount
Apr-26 Share %
YoY Change
Central Government
27,314.0
80.9
29,679.8
82.7
29,717.5
82.4
+8.8%
Disbursed Outstanding Debt
27,236.1
—
29,599.9
—
29,637.3
82.4
+8.8%
Interest Arrears
78.0
—
80.0
—
80.1
—
+2.7%
Private Sector
6,446.7
19.1
6,206.3
17.3
6,232.1
17.3
−3.3%
Disbursed Outstanding Debt
5,853.1
—
5,778.4
—
5,785.9
16.1
−1.2%
Interest Arrears
593.7
—
428.0
—
446.2
—
−24.8%
Public Corporations
3.8
0.0
0.0
0.0
0.0
0.0
Cleared
TOTAL EXTERNAL DEBT STOCK
33,764.5
100.0
35,886.2
100.0
35,949.6
100.0
+6.5%
Source: Ministry of Finance and Bank of Tanzania, Table 2.6.1. DOD = Disbursed Outstanding Debt. Note: TANESCO, ATCL, TRC, TPA, TFC, and DAWASA have no outstanding external debt as of April 2026.
Key Observation: The central government's share of disbursed external debt increased from 80.7% (Apr-25) to 82.4% (Apr-26), while the private sector's share declined from 17.3% to 16.1%. This trend suggests that government-led concessional borrowing is growing faster than private sector external financing — potentially reflecting reduced private sector external appetite amid higher global interest rates, while the government continues accessing multilateral development finance.
3
External Debt Stock by Creditor Category
The composition of Tanzania's external debt by creditor remained broadly unchanged in April 2026. Multilateral institutions — including the World Bank Group (IDA), African Development Bank, International Monetary Fund, and others — continue to dominate at 58.3% of total disbursed external debt (USD 20,926.1 million). This is a structurally positive feature as multilateral lending typically offers concessional terms with low interest rates (often 0.5–2%) and long maturities (25–40 years), reducing debt service pressure.
Commercial lenders — including commercial banks and bond markets — account for 34.3% (USD 12,345.0 million), representing the most expensive component of Tanzania's external debt in terms of interest rates. Bilateral creditors (government-to-government) account for 4.1% (USD 1,478.3 million), while export credits contribute the remaining 1.9% (USD 673.8 million).
Debt by Creditor Category — April 2026 (USD Millions)
Source: Ministry of Finance and BOT, Table 2.6.2
Creditor Category Trend — Apr-25 to Apr-26 (USD Millions)
Source: BOT MER May 2026, Table 2.6.2
External Debt by Creditor — Detailed Table (USD Millions)
Creditor
Apr-25 Amount
Apr-25 Share %
Mar-26 Amount
Mar-26 Share %
Apr-26 Amount
Apr-26 Share %
YoY %
Multilateral
18,965.7
56.2
20,826.5
58.0
20,950.3
58.3
+10.5%
Disbursed Outstanding (DOD)
18,931.8
—
20,803.3
—
20,926.1
58.2
+10.5%
Interest Arrears
33.8
—
23.2
—
24.2
—
−28.4%
Commercial
12,253.2
36.3
12,778.5
35.6
12,710.1
35.4
+3.7%
Disbursed Outstanding (DOD)
11,869.4
—
12,429.1
—
12,345.0
34.3
+4.0%
Interest Arrears
383.8
—
349.4
—
365.1
—
−4.9%
Bilateral
1,463.2
4.3
1,553.5
4.3
1,558.4
4.3
+6.5%
Disbursed Outstanding (DOD)
1,385.3
—
1,473.6
—
1,478.3
4.1
+6.7%
Interest Arrears
78.0
—
80.0
—
80.1
—
+2.7%
Export Credits
1,082.4
3.2
727.7
2.0
730.7
2.0
−32.5%
Disbursed Outstanding (DOD)
906.4
—
672.4
—
673.8
1.9
−25.6%
Interest Arrears
176.1
—
55.3
—
56.9
—
−67.7%
TOTAL EXTERNAL DEBT
33,764.5
100.0
35,886.2
100.0
35,949.6
100.0
+6.5%
Source: Ministry of Finance and Bank of Tanzania, Table 2.6.2. DOD = Disbursed Outstanding Debt.
4
Disbursed Outstanding Debt by Use of Funds — Percentage Share
The sectoral allocation of Tanzania's disbursed outstanding external debt reveals the country's investment priorities as financed through external borrowing. As of April 2026, Transport & Telecommunication leads at 22.4% (USD 7,928.3 million) — up from 21.5% in April 2025 — reflecting continued investment in roads, railways, ports, and telecommunications infrastructure including the Standard Gauge Railway (SGR) and TANZAM highway improvements.
Balance of Payments and Budget Support is the second-largest category at 22.3% (USD 7,901.5 million), reflecting programme and general budget support lending from multilateral institutions such as the World Bank and IMF. Social Welfare & Education takes third place at 19.3% (USD 6,848.2 million), financing health, education, and social protection programmes. Energy & Mining accounts for 12.0%, reflecting investment in the power sector including the Julius Nyerere Hydropower Project and rural electrification initiatives.
Use of Funds — Percentage Share Breakdown (April 2026)
Transport & Telecommunication22.4% — USD 7,928.3M
Balance of Payments & Budget Support22.3% — USD 7,901.5M
Social Welfare & Education19.3% — USD 6,848.2M
Energy & Mining12.0% — USD 4,255.1M
Real Estate & Construction5.1% — USD 1,792.8M
Industries3.7% — USD 1,307.2M
Finance & Insurance3.6% — USD 1,267.6M
Other4.5% — USD 1,600.7M
Agriculture5.3% — USD 1,883.6M
Tourism1.8% — USD 638.2M
Use of Funds — Donut Chart (April 2026)
Source: Ministry of Finance and BOT, Table 2.6.3
Use of Funds % Share — Apr-25 vs Mar-26 vs Apr-26
Source: BOT MER May 2026, Table 2.6.3
Disbursed Outstanding Debt by Use of Funds — Full Detail (USD Millions & % Share)
Sector / Activity
Apr-25 Amount
Apr-25 %
Mar-26 Amount
Mar-26 %
Apr-26 Amount
Apr-26 %
YoY Change Amount
Share Change
Transport & Telecom
7,129.9
21.5
7,900.3
22.3
7,928.3
22.4
+798.4
+0.9pp
BoP & Budget Support
6,834.6
20.7
7,878.7
22.3
7,901.5
22.3
+1,066.9
+1.6pp
Social Welfare & Education
6,670.9
20.2
6,794.0
19.2
6,848.2
19.3
+177.3
−0.9pp
Energy & Mining
4,268.2
12.9
4,236.4
12.0
4,255.1
12.0
−13.1
−0.9pp
Real Estate & Construction
1,572.7
4.8
1,792.7
5.1
1,792.8
5.1
+220.1
+0.3pp
Agriculture
1,647.3
5.0
1,875.3
5.3
1,883.6
5.3
+236.3
+0.3pp
Other
1,816.8
5.5
1,695.0
4.8
1,600.7
4.5
−216.1
−1.0pp
Industries
1,173.8
3.5
1,306.6
3.7
1,307.2
3.7
+133.4
+0.2pp
Finance & Insurance
1,387.1
4.2
1,264.0
3.6
1,267.6
3.6
−119.5
−0.6pp
Tourism
591.7
1.8
635.3
1.8
638.2
1.8
+46.5
0.0pp
TOTAL DOD
33,092.9
100.0
35,378.3
100.0
35,423.2
100.0
+2,330.3
—
Source: Ministry of Finance and Bank of Tanzania, Table 2.6.3. pp = percentage points. DOD = Disbursed Outstanding Debt. Amount in USD Millions computed from Table A10 using DOD totals and percentage shares.
Infrastructure-Led Borrowing: Transport & Telecom (22.4%) and BoP/Budget Support (22.3%) together account for nearly 45% of all disbursed external debt. Combined with Energy & Mining (12.0%), Tanzania is channelling over 56% of its external borrowing into infrastructure and macro-stability financing — consistent with the FYDP IV and Tanzania's Vision 2050 (Dira 2050) ambitions. Social welfare and education at 19.3% reflects Tanzania's commitment to human capital development alongside physical infrastructure.
5
Disbursed Outstanding Debt by Currency Composition — Percentage Share
The currency composition of Tanzania's external debt is a critical determinant of currency risk exposure. As of April 2026, the US Dollar dominates, accounting for 66.0% of disbursed outstanding debt — equivalent to approximately USD 23,396.4 million. This represents a slight decline from 66.6% in April 2025, but remains the overwhelmingly dominant currency.
The Euro is the second-largest currency at 17.7% (approximately USD 6,253.0 million), followed by the Chinese Yuan (CNY/RMB) at 6.6% (USD 2,333.0 million) — reflecting growing Chinese development finance through concessional loans. All other currencies combined account for 9.7% (USD 3,440.8 million).
This currency concentration in USD (66%) creates significant exchange rate risk: a depreciation of the Tanzanian shilling against the US dollar directly inflates the local-currency value of debt and debt service obligations. The shilling's 2.7% appreciation against the USD in April 2026 (TZS 2,612 vs TZS 2,684 a year earlier) provides some relief but does not eliminate this structural vulnerability.
66.0%
🇺🇸 US Dollar
≈ USD 23,396.4M
▼ from 66.6% (Apr-25)
17.7%
🇪🇺 Euro
≈ USD 6,253.0M
▲ from 17.4% (Apr-25)
6.6%
🇨🇳 Chinese Yuan
≈ USD 2,333.0M
▲ from 6.4% (Apr-25)
9.7%
🌐 Other Currencies
≈ USD 3,440.8M
Stable (9.7% Apr-25)
Currency Composition — April 2026 (% of Total DOD)
Currency Composition — Full Table (% Share & Estimated Amounts)
Currency
Apr-25 %
Apr-25 Amount (USD M)*
Feb-26 %
Feb-26 Amount (USD M)*
Apr-26 %
Apr-26 Amount (USD M)*
Share Change Apr-25 → Apr-26
🇺🇸 United States Dollar
66.6
22,029.3
66.3
23,334.9
66.0
23,396.4
▼ −0.6pp
🇪🇺 Euro
17.4
5,753.0
17.6
6,255.9
17.7
6,253.0
▲ +0.3pp
🇨🇳 Chinese Yuan (CNY)
6.4
2,113.6
6.5
2,307.5
6.6
2,333.0
▲ +0.2pp
🌐 Other Currencies
9.7
3,197.1
9.7
3,444.7
9.7
3,440.8
0.0pp
TOTAL DOD
100.0
33,092.9
100.0
35,343.0
100.0
35,423.2
—
Source: Ministry of Finance and BOT, Table 2.6.4. *Amounts are TICGL computations applying percentage shares to DOD totals from Table A10. pp = percentage points.
Currency Composition Trend — Historical (% Share of DOD)
Source: BOT MER May 2026, Table 2.6.4 and historical MERs
Currency Risk Alert: With 66.0% of disbursed external debt denominated in USD and a further 17.7% in Euros, Tanzania's debt service costs are highly sensitive to exchange rate movements. A hypothetical 10% depreciation of the TZS against the USD alone would increase the local-currency value of USD-denominated debt by approximately TZS 6.1 trillion (at current rates). The growing Chinese Yuan share (6.4% → 6.6%) introduces an additional non-USD currency exposure. Tanzania's current shilling appreciation (2.7% against USD in April 2026) provides a temporary buffer but cannot be assumed to persist given global oil price pressures and potential trade balance deterioration.
6
External Debt Flows: Disbursements & Service Payments
Monitoring actual external debt flows — disbursements inward and debt service payments outward — provides a clearer picture of Tanzania's debt management dynamics than stock figures alone. In April 2026, net external debt flows were negative at −USD 136.4 million (debt service exceeded disbursements), meaning Tanzania repaid more than it borrowed during the month.
External Debt Flows — Monthly (USD Millions, Apr-25 to Apr-26)
Source: BOT MER May 2026, Table A10
Debt Service Breakdown — April 2026 (USD Millions)
Component
Amount (USD M)
Share %
Total Debt Service
242.0
100%
Principal Repayments
190.4
78.7%
Interest Payments
51.7
21.3%
Disbursements Received
54.0
—
To Central Government
47.6
88.1%
To Private Sector
6.4
11.9%
Net External Debt Flow
−136.4
—
Net Transfer: After adding interest payments, net transfer on external debt was −USD 188.0 million — meaning Tanzania transferred a net USD 188M to external creditors in April 2026.
Source: Ministry of Finance and BOT, Table A10 (rows 6, 7, 8, 9)
External Debt Disbursements & Service — Monthly Detail (USD Millions)
Period
Disbursements
Debt Service
of which: Principal
of which: Interest
Net Flow
Net Transfer
Apr-25
133.9
155.5
142.3
13.2
−8.4
−21.7
May-25
112.9
404.7
286.2
118.4
−173.4
−291.8
Jun-25
1,161.9
259.1
185.4
73.7
+976.6
+902.8
Jul-25
497.2
122.3
92.7
29.6
+404.5
+374.9
Aug-25
119.5
85.6
32.9
52.6
+86.6
+33.9
Sep-25
606.1
130.9
75.3
55.6
+530.8
+475.2
Oct-25
171.1
344.3
262.0
82.3
−90.9
−173.2
Nov-25
228.9
110.1
76.4
33.7
+152.5
+118.8
Dec-25
274.1
183.5
136.8
46.7
+137.3
+90.6
Jan-26
143.5
99.0
81.5
17.5
+61.9
+44.4
Feb-26
93.1
100.8
35.4
65.4
−7.7
−73.1
Mar-26
335.9
129.5
60.0
69.5
+275.8
+206.4
Apr-26
54.0
242.0
190.4
51.7
−136.4
−188.0
Source: Ministry of Finance and Bank of Tanzania, Table A10. Net Flow = Disbursements − Principal Repayments. Net Transfer = Net Flow − Interest Payments.
7
External Debt Arrears
Total external debt arrears (principal + interest) stood at USD 2,191.9 million at the end of April 2026, representing 6.2% of total disbursed external debt. Arrears are concentrated in the commercial creditor category, which holds USD 1,273.0 million in principal arrears and USD 365.1 million in interest arrears — reflecting historical difficulty in servicing Eurobond and commercial loan obligations during periods of fiscal stress. Multilateral arrears are those owed by the private sector, not the government, per BOT notes.
External Debt Arrears by Creditor — April 2026 (USD Millions)
Source: BOT MER May 2026, Table A10 (row 10)
Total Arrears Trend — Monthly (USD Millions)
Source: BOT MER May 2026, Table A10
Arrears Breakdown — April 2026 (USD Millions)
Creditor
Principal Arrears
Interest Arrears
Total Arrears
% of Total Arrears
Commercial
1,273.0
365.1
1,638.1
74.8%
Export Credits
195.4
56.9
252.3
11.5%
Multilateral (private sector)
7.9
24.2
32.1
1.5%
Bilateral
189.2
80.1
269.3
12.3%
Total Arrears
1,665.5
526.3
2,191.9
100%
Source: Ministry of Finance and BOT, Table A10 (row 10). Note: Multilateral arrears are those owed by the private sector.
Source: BOT MER May 2026, Table A1 (Selected Economic Indicators)
Selected External Debt Indicators — Historical (Annual, End of Period)
Indicator
2018
2019
2020
2021
2022
2023
2024r
2025p
External Debt Stock (USD M)
20,503
21,921
22,953
25,519
27,833
30,253
31,951
34,765
Disbursed Debt (USD M)
18,765
20,029
20,958
23,251
25,393
27,889
30,416
34,053
Interest Arrears (USD M)
1,738
1,892
1,994
2,268
2,440
2,363
1,535
712
Inflation Rate (%)
3.5
3.4
3.3
3.7
4.3
3.8
3.1
3.3
GDP Growth — Real (%)
7.0
6.9
4.5
4.8
4.7
5.1
5.5
6.0
Pvt Sector Credit Growth (%)
4.9
11.1
3.1
10.0
22.5
17.3
12.4
23.6
Exchange Rate (TZS/USD, avg)
2,264
2,288
2,294
2,298
2,303
2,382
2,597
2,538
Source: BOT MER May 2026, Table A1. r = revised, p = provisional. Interest arrears declining sharply from 2022 peak (USD 2,440M) to 2025 (USD 712M) indicates significant arrears clearance efforts.
Positive Debt Trend: Interest arrears have declined dramatically from USD 2,440 million in 2022 to USD 712 million in 2025 — a reduction of 70.8% in three years. This reflects Tanzania's sustained effort to clear legacy arrears, particularly with commercial creditors, and signals improved debt management discipline. External debt growth (from USD 30,253M in 2023 to USD 34,765M in 2025 = +14.9% over two years) is broadly in line with GDP growth (nominal), suggesting debt-to-GDP ratios are not deteriorating significantly.
Election cycle 2025 fiscal implications for borrowing
TICGL Overall Debt Assessment — April 2026: Tanzania's external debt profile as of April 2026 reflects a country in active investment mode, financing infrastructure and social development through a blend of concessional and commercial external borrowing. The structural reliance on multilateral lenders (58.3%) is a key strength. The dominant USD denomination (66%) remains the principal currency risk, though the shilling's recent appreciation provides temporary relief. The dramatic decline in interest arrears (from USD 2,440M to USD 712M between 2022 and 2025) demonstrates improving debt management. The key medium-term challenge is ensuring that the current investment-driven borrowing translates into productivity gains and export competitiveness that can sustain debt service from domestic revenue rather than additional borrowing. At current GDP growth rates (6% real), Tanzania's debt trajectory appears sustainable, but close monitoring of the current account and commercial creditor exposure is warranted.
Related TICGL Resources
Explore Tanzania's economic landscape in depth with TICGL publications and analytical tools.
Tanzania Macroeconomic Review: Inflation, Fiscal Operations & External Sector – May 2026 | TICGL
🇹🇿 TICGL Macroeconomic Monitor · June 2026
Tanzania Economy: Inflation Surge, Fiscal Resilience & Trade Expansion
A comprehensive reading of the Bank of Tanzania Monthly Economic Review (May 2026) and the NBS National Consumer Price Index (December 2025) — covering inflation dynamics, monetary policy, government fiscal operations, and external sector performance.
📅 Data Period: December 2025 – April 2026📊 Sources: Bank of Tanzania · National Bureau of Statistics✍️ Analysis: TICGL Research Desk
4.0%
Headline Inflation April 2026
▲ from 3.2% (Mar-26)
5.75%
Central Bank Rate (CBR) Q2-2026
Unchanged
TZS 2,612
Exchange Rate USD/TZS Apr-26
▼ 2.7% appreciation y/y
USD 5,722M
Gross Foreign Reserves April 2026
4.4 months import cover
22.0%
M3 Money Supply Growth April 2026
Private credit +23.6%
TZS 3,837B
Govt Revenue Collected March 2026
▲ 8.5% above target
Section 1
Inflation Dynamics: From Stability to Renewed Pressure
Tanzania's price stability regime faced renewed pressure in April 2026, with headline inflation jumping sharply to 4.0%, driven primarily by fuel price pass-through effects from the Middle East geopolitical conflict. This section traces the inflation trajectory from December 2025 through April 2026.
4.0%
Headline Inflation Apr-26
5.7%
Food Inflation Apr-26
3.1%
Core Inflation Apr-26
5.3%
Energy & Fuel Inflation Apr-26
3.6%
NCPI Headline Dec-25
Headline Inflation Trend (Monthly, Dec 2024 – Apr 2026)
Annual percentage change, Base 2020=100 | Source: NBS & Bank of Tanzania
Inflation Components – Core vs Food vs Energy (Apr 2025 – Apr 2026)
Annual % change by category | Source: NBS & Bank of Tanzania
⚠️ TICGL Inflation Alert: April 2026 Surge
The sharp jump from 3.2% in March 2026 to 4.0% in April 2026 — a 0.8 percentage point monthly spike — represents the largest single-month acceleration in Tanzania's recent price history. The trigger is unambiguously external: crude oil prices surged from USD 95.58/barrel in March 2026 to an average of USD 103.91/barrel in April, peaking at USD 117.80/barrel. This transmitted directly into transport costs (which recorded a staggering 9.2% annual inflation in April) and indirectly into food prices. While domestic fundamentals remain supportive — adequate NFRA food stocks (500,962 tonnes), a stable shilling, and government subsidies — the near-term inflation outlook remains exposed to external geopolitical risks.
Annual Inflation by COICOP Division – April 2026
% change year-on-year | Source: National Bureau of Statistics (NBS)
NBS Data
NCPI by Division – December 2025 vs Prior Periods
COICOP Division
Weight (%)
Index Dec-24
Index Nov-25
Index Dec-25
1-Month Chg (%)
12-Month Chg (%)
Food & Non-Alcoholic Beverages
28.2
124.27
129.98
132.56
+2.0
+6.7
Alcoholic Beverages & Tobacco
1.9
110.33
113.67
114.08
+0.4
+3.4
Clothing & Footwear
10.8
113.17
115.26
115.46
+0.2
+2.0
Housing, Water, Electricity & Fuels
15.1
115.59
117.70
118.27
+0.5
+2.3
Furnishings & Household Maintenance
7.9
114.38
117.61
117.81
+0.2
+3.0
Health
2.5
108.43
109.70
109.79
+0.1
+1.3
Transport
14.1
118.37
121.50
123.19
+1.4
+4.1
Information & Communication
5.4
106.16
106.49
106.70
+0.2
+0.5
Recreation, Sport & Culture
1.6
110.54
110.89
110.82
−0.1
+0.3
Education Services
2.0
108.84
112.01
112.01
0.0
+2.9
Restaurants & Accommodation
6.6
116.39
117.49
117.48
0.0
+0.9
Insurance & Financial Services
2.1
101.92
102.27
102.34
+0.1
+0.4
Personal Care & Miscellaneous
2.1
116.64
118.40
118.09
−0.3
+1.2
TOTAL — ALL ITEMS INDEX
100.0
116.87
120.01
121.11
+0.9
+3.6
Core Index
73.9
114.45
116.77
117.26
+0.4
+2.5
Non-Core Index
26.1
123.73
129.21
132.04
+2.2
+6.7
Energy, Fuel & Utilities Index
5.7
125.25
129.33
131.02
+1.3
+4.6
BOT MER Data
Inflation by Division – April 2026 (Month-on-Month & Annual)
Main Groups
Weight (%)
MoM Apr-25 (%)
MoM Mar-26 (%)
MoM Apr-26 (%)
Annual Apr-25 (%)
Annual Mar-26 (%)
Annual Apr-26 (%)
Food & Non-Alcoholic Beverages
28.2
0.7
1.8
0.9
5.3
5.5
5.7
Alcoholic Beverages & Tobacco
1.9
0.1
0.1
0.3
3.4
2.1
2.3
Clothing & Footwear
10.8
0.0
0.5
0.3
2.0
1.3
1.6
Housing, Water & Fuels
15.1
0.8
0.7
0.9
3.8
1.6
1.7
Furnishings & Maintenance
7.9
0.2
0.1
0.4
2.3
2.3
2.6
Health
2.5
0.2
0.4
0.6
1.5
1.1
1.6
Transport
14.1
0.4
0.5
5.2
2.1
4.2
9.2
Information & Communication
5.4
0.0
0.0
0.0
0.1
1.0
1.0
Education Services
2.0
0.0
0.6
1.6
4.1
0.9
2.6
ALL ITEMS – Headline
100.0
0.4
0.8
1.3
3.2
3.2
4.0
Core
73.9
0.2
0.3
1.1
2.2
2.2
3.1
Non-Core
26.1
1.0
2.3
1.7
5.7
5.6
6.3
Energy, Fuel & Utilities
5.7
1.9
2.1
5.1
7.3
2.1
5.3
Section 2 — Fiscal Analysis
Central Government Budgetary Operations: Revenue Strength & Expenditure Execution
Government revenue collection in March 2026 significantly exceeded targets, driven by robust tax performance — particularly income taxes. This section analyses the revenue and expenditure structure of the central government for the fiscal year 2025/26.
TZS 3,837B
Total Revenue Collected — Mar 2026
+8.5%
Above Monthly Revenue Target
+10.8%
Tax Revenue Above Target
TZS 4,273B
Total Expenditure — Mar 2026
TZS 1,728B
Development Expenditure
Central Government Revenue: Actuals vs Estimates (March 2026)
Billions of TZS | Source: Ministry of Finance & BOT
Central Government Expenditure: Actuals vs Estimates (March 2026)
Billions of TZS | Source: Ministry of Finance & BOT
Cumulative Revenue Performance: July 2025 – March 2026 vs Annual Budget Targets
TZS Billions — Actuals vs Budget Estimates | Source: MoF & Bank of Tanzania computations
TZS 31,406B
Total Revenue Jul–Mar 2026 (Actual)
TZS 29,776B
Jul–Mar Estimate
+5.5%
Cumulative Over-Performance
TZS 40,466B
Full-Year 2025/26 Budget
Central Government Revenue — Detailed Breakdown
Revenue Category
Budget 2025/26 (TZS Bn)
Jul–Mar Estimate (TZS Bn)
Jul–Mar Actual (TZS Bn)
Mar-26 Estimate (TZS Bn)
Mar-26 Actual (TZS Bn)
Performance vs Target
Total Revenue (incl. LGAs)
40,466.1
29,776.2
31,406.1
3,534.7
3,836.9
+8.5%
Central Government Revenue
36,857.7
28,499.5
30,182.8
3,387.4
3,703.3
+9.3%
Tax Revenue
32,176.0
23,799.8
26,037.6
2,994.9
3,317.5
+10.8%
Taxes on Imports
11,563.0
8,698.5
9,211.0
941.1
1,093.2
+16.2%
Sales/VAT & Excise (Local Goods)
7,016.5
4,980.5
4,809.8
538.8
494.6
−8.2%
Income Taxes
11,367.9
8,372.0
10,314.0
1,320.9
1,547.8
+17.2%
Other Taxes
4,887.7
1,748.8
1,702.8
194.1
182.0
−6.2%
Non-Tax Revenue
4,681.7
4,699.7
4,145.3
392.4
385.8
−1.7%
LGA Own Sources
1,680.5
1,276.7
1,223.2
147.4
133.6
−9.4%
Central Government Expenditure — Detailed Breakdown
Expenditure Category
Budget 2025/26 (TZS Bn)
Jul–Mar Estimate (TZS Bn)
Jul–Mar Actual (TZS Bn)
Mar-26 Estimate (TZS Bn)
Mar-26 Actual (TZS Bn)
Total Expenditure
48,775.0
36,263.7
35,334.9
4,191.0
4,273.4
Recurrent Expenditure
31,281.3
22,903.2
22,928.5
2,584.7
2,545.3
Wages & Salaries
10,917.5
9,789.8
9,842.5
1,108.9
1,128.4
Interest Payments (Total)
6,493.7
4,986.6
4,149.3
636.8
379.1
— Domestic
3,697.3
2,856.0
2,718.3
351.4
236.1
— Foreign
2,796.4
2,130.6
1,431.0
285.4
142.9
Other Goods, Services & Transfers
7,088.6
8,126.8
8,936.6
839.0
1,037.9
Development Expenditure & Net Lending
17,493.7
13,360.5
12,406.4
1,606.3
1,728.1
Local
12,117.8
9,225.5
9,570.2
920.6
989.4
Foreign
5,375.9
4,135.0
2,836.2
685.7
738.6
Revenue vs Expenditure: Composition Chart (March 2026 Actual)
TZS Billions | Recurrent vs Development Expenditure, Revenue Categories
📊 TICGL Fiscal Observation
The central government's revenue performance in the first nine months of FY2025/26 (July 2025–March 2026) is notable: actual collections of TZS 30,182.8 billion exceeded the period estimate of TZS 28,499.5 billion by 5.9%. The standout performer was income tax, which surpassed its March 2026 monthly target by 17.2%, reflecting improvements in tax administration and compliance enforcement by TRA. Import tax collections also exceeded targets by 16.2%, consistent with the 16.4% growth in goods imports recorded in the year ending April 2026. However, VAT on domestic goods underperformed by 8.2% in March, suggesting pressure on formal sector consumption. On the expenditure side, development spending of TZS 1,728.1 billion in March 2026 exceeded estimates, a positive signal for capital formation. The overall budget balance showed a deficit of TZS 244 billion (cheques issued basis), below the estimated TZS 586 billion — indicating better fiscal management than planned.
The Bank of Tanzania's Monetary Policy Committee maintained the Central Bank Rate at 5.75% in April 2026, while narrowing the CBR corridor from 200 to 150 basis points. Private sector credit growth remained strong at 23.6%, led by trade, mining, and transport sectors.
Annual Credit Growth by Economic Sector (April 2026)
% change year-on-year | Source: Banks & Bank of Tanzania
Section 4
External Sector: Strong Exports, Widening Current Account Deficit
Tanzania's exports rose 13.5% to USD 18.9 billion in the year ending April 2026, propelled by gold and tourism. The current account deficit widened to USD 2,652 million due to robust import growth driven by capital goods and industrial supplies. Foreign exchange reserves remain adequate at 4.4 months of import cover.
Monthly weighted average exchange rate | Source: Bank of Tanzania
TZS 2,612/USD
Avg Rate Apr-26 (Stronger)
TZS 2,684/USD
Avg Rate Apr-25 (Weaker)
−2.7%
Annual TZS Appreciation
Section 5
National Debt Developments
Tanzania's total national debt reached USD 51,067 million at end-April 2026. External debt dominates at 70.4% of total, with multilateral creditors holding the largest share. Domestic debt grew to TZS 39,336 billion, largely driven by Treasury bond issuances.
External Debt by Creditor Category (April 2026)
USD Millions | Source: Ministry of Finance & Bank of Tanzania
Domestic Debt by Instrument (April 2026)
TZS Billions | Source: Ministry of Finance & Bank of Tanzania
Debt Category
Apr-25
Mar-26
Apr-26
Change (MoM)
Total National Debt (USD Mn)
46,738.5
50,803.5
51,067.2
+0.5%
External Debt Stock (USD Mn)
33,764.5
35,886.2
35,949.6
+0.2%
Multilateral
18,931.8
20,803.3
20,926.1
+0.6%
Commercial
11,869.4
12,429.1
12,345.0
−0.7%
Bilateral
1,463.2
1,553.5
1,558.4
+0.3%
Domestic Debt Stock (TZS Bn)
34,759.9
38,447.9
39,335.8
+2.3%
Government Securities
29,582.4
33,321.1
33,438.1
+0.4%
Government Bonds
27,459.6
31,609.9
31,783.7
+0.5%
Overdraft
5,159.1
5,126.8
5,897.6
+15.0%
Section 6 — Global Context
Global Economic Environment & Commodity Price Shocks
Global growth is projected to moderate to between 2.5% and 3.1% in 2026 amid geopolitical tensions, rising energy costs, and trade policy uncertainty. These headwinds have significant transmission channels into Tanzania's economy through fuel, food, and fertilizer import costs.
World Commodity Prices (Selected Items, Apr 2025 – Apr 2026)
Crude oil (USD/bbl), Gold (USD/troy oz ÷10), Wheat (USD/tonne) | Source: World Bank
Commodity
Apr-25
Sep-25
Dec-25
Jan-26
Feb-26
Mar-26
Apr-26
YoY Change
Crude Oil Average (USD/bbl)
65.91
66.46
60.88
63.65
68.01
95.58
103.91
+57.7%
Gold (USD/troy oz)
3,217.64
3,667.68
4,309.23
4,752.75
5,019.97
4,855.54
4,721.42
+46.8%
Coffee Arabica (USD/kg)
8.64
8.83
8.40
8.02
7.08
7.37
7.30
−15.5%
Coffee Robusta (USD/kg)
5.43
4.66
4.20
4.24
3.96
3.90
3.63
−33.1%
Wheat Hard (USD/tonne)
249.58
233.76
242.80
249.90
257.55
275.91
282.00
+13.0%
DAP Fertilizer (USD/tonne)
635.00
780.63
627.50
619.20
626.50
658.25
725.25
+14.2%
Urea (USD/tonne)
386.88
461.13
392.50
415.40
472.00
725.63
856.88
+121.5%
⚠️ TICGL Risk Watch: Urea Price Shock
The 121.5% year-on-year surge in urea fertilizer prices (from USD 386.88 to USD 856.88 per tonne) represents a critical risk to Tanzania's agricultural sector and food security. Combined with the 14.2% rise in DAP prices, Tanzania's farmers face sharply higher input costs for the 2026 planting season. The government's fertilizer subsidy program will face heightened fiscal pressure. TICGL recommends close monitoring of fertilizer import volumes and subsidy budget utilization in the months ahead.
📚 Further Reading from TICGL Research
Deepen your understanding of Tanzania's economic landscape with related analyses from our research desk.
Data Sources & Attribution:
1. Bank of Tanzania (BOT). Monthly Economic Review, May 2026. Bank of Tanzania, Dodoma. Available at: www.bot.go.tz
2. National Bureau of Statistics (NBS). Press Release: National Consumer Price Index (NCPI) for December 2025. Ref: AC 334/376/01/374. Dodoma, 08 January 2026. Available at: www.nbs.go.tz
3. Ministry of Finance, Tanzania. Central Government Operations Data (Cheques Issued), FY 2025/26.
4. World Bank. Commodity Markets Outlook. Available at: www.worldbank.org/en/research/commodity-markets
5. IMF. World Economic Outlook, April 2026. International Monetary Fund.
Disclaimer: This analysis is produced by TICGL Research for informational purposes only. All figures are sourced from official government and central bank publications. TICGL does not guarantee the accuracy of underlying source data. This document does not constitute investment advice.
Tanzania Shilling (TZS) Stability vs Inflation Rates 2018–2026 | TICGL Economic Intelligence
TICGL Economic Intelligence · Tanzania Currency & Prices
Tanzanian Shilling Stability vs Inflation Rates — 2018 to 2026
How much does the TZS/USD exchange rate drive price levels in Tanzania? This analysis maps every depreciation episode against headline, food, core and energy inflation — revealing when the currency is a friend of monetary stability and when it becomes the enemy.
Data: NBS NCPI + Bank of Tanzania MER May 2026Period: 2018 – April 2026Base Year: 2020 = 100Currency: TZS / USD
The signature chart of this analysis: TZS/USD annual average (left axis) plotted against annual headline inflation (right axis). The relationship is not always direct — Tanzania's inflation has multiple drivers — but every major depreciation episode leaves a visible imprint on the price level with a 6–12 month lag.
TZS/USD Exchange Rate vs Tanzania Headline Inflation (%)
Annual averages 2018–2025 + monthly data Jan–Apr 2026. Left axis: TZS per USD. Right axis: Annual inflation rate (%).
Reading the chart: Notice that the 2023–2024 sharp depreciation (TZS 2,382 → 2,597) did not immediately spike headline inflation — because food inflation was subdued and the CBR was held firm. The April 2026 inflation jump to 4.0% is instead driven by global oil prices (+65.6%), not a weaker shilling. In fact, the shilling appreciated 2.7% year-on-year in April 2026.
TZS/USD Annual Average — 8-Year Trend
Depreciation story: TZS weakened from 2,264 (2018) to a peak of 2,597 (2024) — a cumulative 14.7% depreciation over 6 years. The 2025 average recovered slightly to 2,538, and April 2026 traded at 2,612.
Annual Headline Inflation — 8-Year Trend (%)
Contained inflation: Despite significant exchange rate movements, Tanzania's headline inflation has stayed in a narrow 3.1–4.3% band over 2018–2026, well within EAC and SADC targets. This demonstrates effective monetary anchoring by the Bank of Tanzania.
SECTION 02
TZS Depreciation vs Inflation — Correlation & Quantified Impact
How tightly does the shilling's movement translate into price changes? The correlation is positive but moderate — depreciation raises import costs and fuel prices, but Tanzania's large domestic food production and BOT's active monetary management buffer the full pass-through.
Currency pass-through takes 6–12 months to reach consumer prices fully.
~0.3pp
Inflation impact per 5% depreciation
Estimated pass-through coefficient — lower than many SSA peers.
65.6%
Apr 2026 inflation driver
Oil price surge — NOT shilling weakness — explains Apr 2026 jump to 4.0%.
TZS Annual Change (%) vs Inflation Change (pp) — Year-on-Year
Key finding: Years of significant TZS depreciation (2023–2024) coincided with declining or flat inflation, because food prices (the largest CPI basket component at 28.2%) were falling. This shows the currency-inflation link in Tanzania is mediated primarily through energy/fuel imports, not food.
Annual TZS Depreciation (+) / Appreciation (−) vs Inflation (%)
2024 anomaly: The shilling depreciated 8.2% in 2024 (steepest in the series), yet headline inflation fell to 3.1% from 3.8%. Food deflation, declining oil prices, and strong forex reserves allowed BOT to prevent pass-through — a testament to effective policy.
Scatter: TZS Annual % Change vs Headline Inflation — Each Dot = One Year (2018–2025)
SECTION 03
Phase-by-Phase: TZS & Inflation History (2018–2026)
Tanzania's exchange rate and inflation history can be divided into four distinct phases, each with a different dominant driver and policy response.
TZS/USD Monthly Rate — Trend Line 2018–2026
2018–2021
Phase 1: Remarkable Stability
TZS held between 2,264 and 2,298/USD for four consecutive years — one of SSA's most stable exchange rate periods. BOT maintained tight liquidity. Inflation averaged 3.5% driven by domestic food and services.
TZS stable +1.5% total 4yrsInflation: 3.3–3.7%
2022
Phase 2: Global Commodity Shock
Russia-Ukraine war spiked global commodity prices. Fuel imports surged. Inflation peaked at 4.3% — the cycle high. TZS held steady at 2,303/USD due to strong gold export earnings and BOT FX intervention.
TZS weakened 8.2% in 2024 alone (2,382→2,597/USD). Counterintuitively, inflation fell to 3.1%. Declining global commodity prices, a bumper harvest season, and NFRA food stock releases offset the FX pass-through. BOT maintained CBR at 5.5%.
TZS depreciates 8.2% in 2024Inflation falls to 3.1%
2025–2026
Phase 4: Shilling Recovery, New Inflation Driver
TZS appreciated 2.7% YoY in April 2026 (2,684→2,612/USD), supported by gold export boom (+42% revenue) and BOT FX sales. But inflation jumped to 4.0% in April 2026 due to Middle East geopolitical conflict driving crude oil to USD 104/barrel — a global, not local, shock.
Inflation Decomposition — What Actually Drives Prices in Tanzania?
Breaking inflation into its components reveals that the TZS/food price link dominates in years of shilling weakness, while energy/fuel inflation is the direct transmission channel from global oil prices. Core inflation — which excludes food and energy — tracks domestic demand and is the most policy-relevant measure.
Inflation Components — Annual Rates by Year 2018–April 2026 (%)
Food Inflation vs TZS/USD (2024–Apr 2026)
Food inflation peaked at 7.7% in August 2025, well after the 2024 TZS depreciation — consistent with 6–12 month lag. By April 2026 food inflation had moderated to 5.7% as harvest season approaches.
Energy/Fuel Inflation vs Oil Price (2025–Apr 2026)
Energy inflation surged from 2.1% (March 2026) to 5.3% (April 2026) in a single month, directly tracking the crude oil price jump from USD 95.58 to USD 103.91/barrel. This is the sharpest single-month energy inflation increase in the dataset.
Core Inflation — Domestic Demand Signal (%)
Core inflation held between 1.9–2.7% through all of 2025, signalling well-anchored domestic demand. The April 2026 jump to 3.1% is driven by transport (fuel pass-through into services), not structural price pressures.
Contribution to Overall Inflation (Percentage Points) — Apr 2025 to Apr 2026
Reading the stacked bars: Core inflation (blue) has been the largest single contributor throughout the period. The April 2026 spike is explained by energy/fuel and core both rising simultaneously — the first time both have elevated together since 2022.
The highest-resolution view of the TZS-inflation relationship: 16 months of monthly data showing the TZS/USD rate alongside headline, food, core, and energy inflation simultaneously. This granular view reveals how quickly global oil prices transmitted into domestic prices in March–April 2026.
Monthly TZS/USD Rate (left axis) vs Inflation Measures (right axis) — Jan 2025 to Apr 2026
Month-on-Month CPI Change (%) — Jan 2025 to Apr 2026
The 1.3% month-on-month increase in April 2026 is the largest single monthly CPI jump in the 2025–2026 series, driven by transport (+5.2% MoM) and food (+0.9% MoM). In contrast, most months in 2025 recorded MoM changes of 0.1–0.9%.
TZS/USD End-of-Period Rate — Monthly (2025–2026)
The shilling strengthened from TZS 2,684/USD (April 2025) to TZS 2,602/USD (June 2025), then gradually weakened to TZS 2,612/USD (April 2026). The +2.7% year-on-year appreciation has provided a modest but meaningful anti-inflationary buffer.
SECTION 06
How TZS Movements Transmit to Consumer Prices — The Four Channels
Exchange rate depreciation does not raise all prices equally. Understanding the specific transmission channels is critical for interpreting TZS movements and their likely inflation impact in Tanzania's context.
⛽
Fuel & Energy Channel — FAST & DIRECT
Tanzania imports ~100% of refined petroleum. A weaker TZS directly raises pump prices within 1–2 months. Energy/fuel CPI has the highest correlation with TZS movements. Government fuel subsidies dampen but don't eliminate this channel.
Lag: 1–2 months
🌾
Imported Food Channel — MODERATE & SELECTIVE
Tanzania produces ~75% of its food domestically, so the food-currency link is weaker than in more import-dependent economies. Key imported items: wheat, cooking oil, sugar. Domestic food prices respond more to rainfall and NFRA stock releases than to TZS movements.
Lag: 3–6 months
🏭
Industrial Input Channel — SLOW & DIFFUSE
Manufacturing inputs (fertilisers, chemicals, machinery parts) priced in USD filter into local production costs over 6–12 months. This channel explains the stickiness of core inflation during and after depreciation episodes. Credit expansion amplifies this channel.
Lag: 6–12 months
🚛
Transport & Logistics Channel — FAST & BROAD
Transport costs (14.1% CPI weight) respond immediately to fuel price changes. Because transport is an input into every other sector, fuel-driven transport inflation cascades across food, health, education and services categories within 1–3 months of a fuel price change.
Lag: 1–3 months
Transport Inflation vs Fuel Prices vs TZS/USD — Monthly (2025–Apr 2026)
April 2026 case study: Crude oil rose from USD 65.91/barrel (April 2025) to USD 103.91/barrel (April 2026). Domestic diesel prices rose. Transport inflation hit 9.2% annual — and with transport as an input cost for 80%+ of consumer goods, this diffuses broadly across the CPI basket. The shilling's 2.7% appreciation partially offset the oil shock but could not fully absorb a 65% oil price increase.
SECTION 07
Complete Data Reference Tables
Full annual and monthly data used in this analysis, sourced directly from NBS and Bank of Tanzania official publications.
Annual TZS/USD Rate vs All Inflation Measures — 2018 to 2025
Year
TZS/USD Annual Avg
YoY TZS Change
Headline Inflation
Food Inflation
Non-Food Inflation
Core Inflation
Currency Verdict
Inflation Verdict
2018
2,263.8
Base year
3.5%
—
—
—
Stable
Moderate
2019
2,288.2
+1.1%
3.4%
—
—
—
Near stable
Low
2020
2,294.1
+0.3%
3.3%
—
—
—
Stable
Low
2021
2,297.8
+0.2%
3.7%
—
—
—
Stable
Moderate
2022
2,303.1
+0.2%
4.3%
5.1%
3.5%
3.4%
Stable
Peaked (global shocks)
2023
2,382.1
+3.4%
3.8%
4.1%
3.5%
2.9%
Depreciating
Moderate
2024
2,597.4
+8.2%
3.1%
2.1%
3.5%
3.4%
Sharp depreciation
Fell despite weaker TZS
2025
2,537.6
−2.3%
3.3%
6.4%
2.0%
2.2%
Partially recovering
Food-driven rise
Apr 2026
2,612.5 (avg)
−2.7% YoY
4.0%
5.7%
3.3%
3.1%
Appreciating YoY
Oil shock — not TZS
Monthly Data: TZS End-of-Period Rate & All CPI Measures — 2025 to April 2026
Month
TZS/USD (EOP)
Headline Infl.
Food Infl.
Core Infl.
Non-Core Infl.
Energy/Fuel Infl.
Transport Infl.
MoM CPI %
Jan-25
—
3.1%
5.3%
2.7%
4.0%
3.5%
2.4%
+0.6%
Feb-25
—
3.2%
5.0%
2.5%
5.0%
5.4%
3.2%
+0.6%
Mar-25
—
3.3%
5.4%
2.2%
6.0%
7.9%
2.1%
+0.8%
Apr-25
2,679.2
3.2%
5.3%
2.2%
5.7%
7.3%
2.1%
+0.4%
May-25
2,685.6
3.2%
5.6%
2.1%
5.6%
6.1%
1.7%
+0.1%
Jun-25
2,604.6
3.3%
7.3%
1.9%
7.1%
2.1%
1.6%
+0.3%
Jul-25
2,545.8
3.3%
7.6%
1.9%
7.1%
1.0%
1.2%
−0.3%
Aug-25
2,463.3
3.4%
7.7%
2.0%
7.3%
2.6%
1.4%
−0.1%
Sep-25
2,442.8
3.4%
7.0%
2.2%
6.7%
3.7%
2.1%
−0.6%
Oct-25
2,451.6
3.5%
7.4%
2.1%
7.3%
4.0%
1.7%
−0.2%
Nov-25
2,436.8
3.4%
6.6%
2.3%
6.2%
3.8%
2.9%
+0.3%
Dec-25
2,447.5
3.6%
6.7%
2.3%
6.2%
3.8%
4.1%
+0.9%
Jan-26
2,518.1
3.3%
5.7%
2.2%
6.0%
5.2%
4.2%
+0.2%
Feb-26
2,542.5
3.2%
5.7%
2.1%
5.9%
2.8%
4.0%
+0.5%
Mar-26
2,577.4
3.2%
5.5%
2.2%
5.6%
2.1%
4.2%
+0.8%
Apr-26
2,602.0
4.0%
5.7%
3.1%
6.3%
5.3%
9.2%
+1.3%
SECTION 08
Outlook: TZS Stability & Inflation Trajectory — What to Watch
The critical question for the remainder of 2026: can the shilling hold its ground while global oil prices remain elevated, and will the May–June harvest season provide the food disinflation needed to bring headline inflation back toward 3.5%?
→Middle East escalation: Further geopolitical tensions could push crude oil above USD 120/barrel — BOT projects near-term inflation risk remains elevated
→USD debt servicing: USD 242 million in external debt service in April 2026 alone creates structural USD demand pressure on the shilling
→Import growth outpacing exports: Trade deficit widened to USD 5.35 billion (2026p) — sustained import demand absorbs USD and pressures the shilling
→Global inflation revised up to 4.4%: External price levels feeding into Tanzania's import prices regardless of TZS strength
→Fertiliser prices rising: DAP prices at USD 725/tonne (March 2026), up from USD 320/tonne (April 2024) — threatening food production costs for the next growing season
→Core inflation now rising: Jump from 2.2% to 3.1% in one month (Mar→Apr 2026) signals that oil-driven transport costs are beginning to seep into underlying prices
Key Indicators at a Glance — Tanzania Shilling & Inflation Dashboard (April 2026)
Bottom line for investors and policymakers: The Tanzanian shilling is in better shape than it was in 2024. The April 2026 inflation spike is an external supply shock (oil), not a TZS weakness problem. If Middle East tensions ease and the harvest season delivers, headline inflation should moderate toward 3.5% by Q3 2026. The critical monitor: crude oil prices and TZS/USD monthly average.
Data Sources: National Bureau of Statistics (NBS) — National Consumer Price Index (NCPI) December 2025, Press Release Ref: AC 334/376/01/374 (08 January 2026). | Bank of Tanzania — Monthly Economic Review, May 2026. | World Bank Commodity Markets. | All TZS figures use official end-of-period or annual average exchange rates from Bank of Tanzania. TZS equivalent external debt figures are indicative, calculated at prevailing exchange rates. | Analysis: TICGL Economic Intelligence Unit, June 2026.
Tanzania Inflation, National Debt & Economic Performance 2025–2026 | TICGL Economic Intelligence
TICGL Economic Intelligence · Tanzania
Tanzania Inflation, National Debt & Economic Performance 2025–2026
A comprehensive analysis of Tanzania's consumer price dynamics, national debt in TZS, Tanzanian Shilling stability, monetary policy stance, and external sector performance — based on official NBS and Bank of Tanzania data.
Sources: NBS NCPI Dec 2025 & BOT Monthly Economic Review May 2026
Reference Period: Base year 2020 = 100
Last updated: June 2026
4.0%
Headline Inflation
April 2026
5.7%
Food Inflation
April 2026
3.1%
Core Inflation
April 2026
TZS 51.1T
Total National Debt
April 2026
2,612
TZS / USD
Avg April 2026
5.75%
Central Bank Rate
Q2 2026
23.6%
Private Credit Growth
Year to April 2026
USD 5.72B
Forex Reserves
4.4 months of imports
1. Headline Inflation Trend — Tanzania Mainland (2024–2026)
Annual headline inflation rose from 3.1% in January 2025 to 4.0% in April 2026, breaking above the EAC upper benchmark of 8% but accelerating due to global fuel price transmission from Middle East geopolitical tensions. Food inflation and energy are the dominant drivers.
Key Insight: After a stable 2024 (3.0–3.1%), inflation climbed steadily through 2025 reaching 3.6% by December, then jumped to 4.0% in April 2026 driven by fuel price pass-through. The 2025 acceleration was largely food-driven (food inflation hit 7.7% in August 2025).
Core vs Non-Core Inflation (%)
Food vs Non-Food Inflation (%)
Energy, Fuel & Utilities Inflation (%)
2. National CPI by Main Category — December 2025 vs April 2026
The table below tracks index levels, 12-month changes, and monthly changes for all 13 COICOP divisions. Transport recorded the highest monthly change in April 2026 (+5.2%) due to fuel price increases.
NCPI by Division (Base: 2020 = 100)
Division
Weight (%)
Dec 2024 Index
Dec 2025 Index
Apr 2026 12M %
Apr 2026 MoM %
Trend
Food & Non-Alcoholic Beverages
28.2
124.27
132.56
5.7%
+0.9%
Elevated
Alcoholic Beverages & Tobacco
1.9
110.33
114.08
2.3%
+0.3%
Stable
Clothing & Footwear
10.8
113.17
115.46
1.6%
+0.3%
Low
Housing, Water, Electricity & Gas
15.1
115.59
118.27
1.7%
+0.9%
Stable
Furnishings & Household Equipment
7.9
114.38
117.81
2.6%
+0.4%
Stable
Health
2.5
108.43
109.79
1.6%
+0.6%
Low
Transport
14.1
118.37
123.19
9.2%
+5.2%
Critical
Information & Communication
5.4
106.16
106.70
1.0%
0.0%
Very Low
Recreation, Sport & Culture
1.6
110.54
110.82
0.7%
+0.3%
Low
Education Services
2.0
108.84
112.01
2.6%
+1.6%
Rising
Restaurants & Accommodation
6.6
116.39
117.48
1.8%
+0.1%
Stable
Insurance & Financial Services
2.1
101.92
102.34
0.1%
0.0%
Low
Personal Care & Misc.
2.1
116.64
118.09
3.5%
+0.2%
Stable
ALL ITEMS (Headline)
100.0
116.87
121.11
4.0%
+1.3%
Rising
CPI by Category — April 2026 Annual Inflation Rate (%)
3. Tanzania National Debt — TZS Analysis
Tanzania's total national debt reached TZS 51.1 trillion by April 2026. External debt dominates at 70.4% of the total, denominated primarily in USD (66%), Euro (17.7%), and Chinese Yuan (6.6%). Domestic debt has grown steadily driven by government bond issuances and overdraft utilisation.
TZS 51.1T
Total National Debt
April 2026 (Public + Private)
TZS 35.0T
External Debt (TZS equiv.)
USD 35.95B → ×TZS 2,602
TZS 39.3T
Domestic Debt Stock
+2.3% from March 2026
70.4%
External Debt Share
of total national debt
66.0%
USD Denominated
Key FX risk exposure
National Debt Growth Trend — Domestic Debt (TZS Billions)
Observation: Domestic debt has grown from TZS 14.3T in April 2018 to TZS 39.3T in April 2026 — a 175% increase in 8 years, driven mainly by government bond issuances to finance the budget deficit.
External Debt by Currency Composition (%)
FX Risk: With 66% of external debt in USD and the shilling historically depreciating, currency fluctuations directly inflate TZS-equivalent debt servicing costs. Government subsidies on fuel partially cushion transmission to inflation.
External Debt by Creditor Category (USD Millions)
External Debt by Use of Funds — April 2026 (%)
Domestic Debt by Instrument — April 2025 vs April 2026 (TZS Billions)
The Tanzanian Shilling has shown remarkable stability in 2025–2026, appreciating 2.7% year-on-year in April 2026 (TZS 2,612/USD vs TZS 2,684/USD in April 2025). This contrasts sharply with 2023–2024 when the shilling depreciated 3.9%. Shilling strength is critical: it directly reduces the TZS cost of servicing USD-denominated external debt.
TZS/USD Exchange Rate — Monthly Average (2025–2026)
Positive Signal: The shilling traded at an average of TZS 2,612.46/USD in April 2026, appreciating 2.7% year-on-year. The Bank of Tanzania sold USD 15.3M to maintain orderly conditions. Compared to the 2023 annual average of TZS 2,382/USD, the shilling has stabilised considerably.
Annual Average TZS/USD Rate (2018–2025)
Long-Term Trend: Over 8 years, TZS depreciated from 2,264/USD (2018) to 2,537/USD (2025 average). Every 100 TZS depreciation against USD adds approximately TZS 2.4 trillion to the TZS-equivalent external debt stock.
Critical Debt-Currency Nexus: Tanzania's external debt in TZS-equivalent terms nearly doubled from TZS 42.5T (2018) to TZS 93.8T (April 2026) — driven equally by new borrowing AND shilling depreciation. A 10% depreciation of the TZS against USD adds approximately TZS 2.4T to the external debt burden without borrowing a single new dollar.
5. Monetary Policy & Interest Rates
The Monetary Policy Committee held the Central Bank Rate (CBR) at 5.75% for Q2 2026, narrowing the CBR corridor from 200bps to 150bps to improve monetary transmission. The 7-day IBCM rate averaged 6.15% in April 2026. Money supply grew 22% annually.
6. External Sector: Exports, Imports & Current Account
Tanzania's export performance surged in the year to April 2026, reaching USD 18.9 billion (+13.5% YoY), led by gold, travel receipts, and manufactured goods. However, imports grew faster (+15.5%) widening the current account deficit to USD 2.65 billion. Foreign exchange reserves remain adequate at 4.4 months of imports.
Exports vs Imports of Goods (USD Millions) — Year Ending April
Top Export Commodities — Year Ending April 2026 (USD Millions)
Current Account Balance Summary (USD Millions)
Account Component
Apr 2025
Mar 2026
Apr 2026
2025 Annual
2026p Annual
% Change
Goods Exports
649.9
815.0
788.0
9,682.7
11,215.0
+15.8%
Goods Imports
1,111.0
1,411.6
1,751.3
14,236.3
16,568.5
+16.4%
Goods Balance
-461.1
-596.6
-963.3
-4,553.6
-5,353.5
+17.6%
Services Balance
+218.6
+266.0
+237.3
+3,908.0
+4,285.6
+9.7%
Current Account Balance
-437.3
-444.4
-838.4
-2,112.1
-2,651.8
+25.6%
Widening Deficit: The current account deficit widened 25.6% to USD 2.65 billion in the year ending April 2026. While foreign reserves remain adequate at 4.4 months of import cover, the acceleration in goods imports (capital equipment, industrial supplies) signals expanding economic activity but also increased external vulnerability if global oil prices remain elevated.
7. Government Revenue & Expenditure — Fiscal Consolidation
The government collected TZS 3.84 trillion in March 2026, surpassing its monthly target by 8.5%. Income tax led performance at 17.2% above target. Total expenditure of TZS 4.27 trillion was recorded, with development spending at TZS 1.73 trillion reflecting ongoing infrastructure investment.
Revenue vs Expenditure — March 2026 (TZS Billions)
Tax Revenue Composition — March 2026 (TZS Billions)
Credit to Private Sector by Economic Activity — Annual Growth Rate (%)
Credit Growth Leader: Trade recorded the highest annual credit growth at 44.2% in April 2026, followed by Transport & Communication (39.7%) and Mining & Quarrying (39.7%). Personal loans account for the largest share of outstanding credit at 35%, supporting MSMEs.
Zanzibar's headline inflation rose to 5.0% in April 2026 from 4.3% in April 2025, driven by food prices (9.9% annual increase) and transport (2.7%). The current account improved 18.5% to a surplus of USD 842 million, supported by a 21.7% rise in tourist arrivals to 944,056 visitors.
Zanzibar Inflation Rates — April 2026 (%)
Zanzibar Current Account Surplus (USD M) — Year Ending April
Zanzibar Export Growth — Top Commodities 2026 vs 2025 (USD M)
9. Global Economic Context & Risk Factors for Tanzania
The global economic outlook in 2026 presents external risks for Tanzania. The IMF projects global growth to slow to 3.1% while the World Bank forecasts 2.5%. Rising crude oil prices (USD 103.91/barrel average in April 2026, up from USD 65.91 in April 2025) are the primary inflation transmission channel.
Global Crude Oil Prices (USD/barrel) — 2025 to April 2026
Oil Price Shock: Crude oil surged from USD 62.75/barrel (May 2025) to USD 103.91/barrel (April 2026) — a +65.6% increase. This is the principal driver of April 2026's inflation spike, particularly in transport (+9.2% annual rate) and energy/fuel (+5.3%).
Gold Price (USD/troy oz) vs Tanzania Gold Exports (USD M)
Gold Windfall: Gold prices surged from USD 3,217/oz (April 2025) to USD 4,721/oz (April 2026), boosting Tanzania's gold export earnings from USD 3.82 billion to USD 5.44 billion — a 42.3% increase — significantly supporting foreign reserve accumulation.
Key Risk Factors for Tanzania — 2026 Outlook Assessment
Risk Factor
Current Status
Impact on Tanzania
Mitigation in Place
Severity
Global Oil Price Surge
USD 103.9/bbl (Apr 2026)
Transport inflation +9.2%; energy inflation +5.3%
Government fuel subsidies & fertilizer support
High
External Debt USD Exposure
66% USD-denominated
TZS 2.4T additional burden per 100 TZS depreciation
TZS appreciation +2.7% YoY; BOT FX intervention
Medium
Food Price Volatility
+5.7% annual (Apr 2026)
28.2% CPI basket weight — high household impact
NFRA stock: 500,962 tonnes; harvest season May 2026
Medium
Current Account Widening
-USD 2.65B (yr to Apr 2026)
Foreign reserve pressure; FX demand increase
Forex reserves at 4.4 months; gold export surplus
Medium
Domestic Debt Growth
TZS 39.3T (+13.2% YoY)
Crowding out private credit; higher interest payments
Data Sources: National Bureau of Statistics (NBS) — National Consumer Price Index (NCPI), December 2025 Press Release (Ref: AC 334/376/01/374, dated 08 January 2026). | Bank of Tanzania — Monthly Economic Review, May 2026. | All monetary figures in TZS unless otherwise stated. External debt TZS equivalents calculated at prevailing exchange rates. | Analysis: TICGL Economic Intelligence Unit.
Economic Performance in Zanzibar 2026 | Inflation, Government Finance & External Sector | TICGL
🌊 TICGL / TERI — Islands Economy Research
Economic Performance in Zanzibar — April 2026
A detailed analysis of Zanzibar's macroeconomic performance covering inflation dynamics, government revenue and expenditure operations, and external sector performance including tourism, clove exports and the current account. Based on the Bank of Tanzania Monthly Economic Review — May 2026 and OCGS statistical data.
📅 Reference Period: April 2026📊 Source: BOT MER May 2026 — Section 3.0📍 OCGS | Ministry of Finance & Planning, Zanzibar
5.0%
Headline Inflation
↑ Apr 2026
9.9%
Food Inflation
↑ from 4.7% (Apr-25)
1.1%
Non-Food Inflation
↓ from 4.4% (Apr-25)
TZS 249Bn
Revenue & Grants
+35% above target
$842M
Current Account Surplus
+18.5% growth
944,056
Tourist Arrivals
+21.7% annual
89.8%
Goods Export Growth
Cloves-driven
5.0%
Headline Inflation Apr-26
9.9%
Food Inflation Apr-26
35%
Revenue Above Target
$842M
Current Account Surplus
+22.4%
Export Growth
944K
Tourist Arrivals
Zanzibar's economy in 2026 presents a tale of divergence: a buoyant external sector driven by record tourism arrivals and exceptional clove export revenues, set against renewed domestic price pressures — particularly in food — and a sharp rise in headline inflation to 5.0% in April 2026. This compares unfavourably with the 4.3% recorded in the same month of 2025, signalling that price stability remains a challenge for the Isles.
On the fiscal front, Zanzibar's government delivered a strong revenue performance, exceeding its April 2026 monthly target by 35%. However, substantial development spending — accounting for 74% of total expenditure — produced an overall fiscal deficit of TZS 123.3 billion, fully financed through domestic borrowing. The external sector, anchored by tourism's dominance, posted a current account surplus of USD 842 million for the year ending April 2026, up 18.5% from the prior year.
3.1 Inflation Developments in Zanzibar
Source: BOT MER May 2026, Section 3.1 | Table 3.1.1 | OCGS (Base: July 2022 = 100)
In April 2026, Zanzibar's headline inflation reached 5.0% annually — a notable increase from 4.3% recorded in the same month of 2025. The primary driver was food inflation surging to 9.9%, unchanged from March 2026 but more than double the 4.7% registered a year earlier. This reflects both demand pressures in the local market and the impact of rising fuel costs on food supply chains and transport.
Conversely, non-food inflation eased sharply to just 1.1% from 4.4% in April 2025, with moderation particularly pronounced in the housing, water, electricity, gas and other fuels category. This divergence between food and non-food price trajectories is a structural feature of Zanzibar's inflation profile in 2026 and mirrors similar patterns seen across the EAC region.
Zanzibar Inflation — All Main Groups | Monthly & Annual % Change (Base: July 2022 = 100)
Main Group
Weight (%)
Apr-25 MoM
Mar-26 MoM
Apr-26 MoM
Apr-25 Annual
Mar-26 Annual
Apr-26 Annual
Food & Non-Alcoholic Beverages
41.9
0.0
0.7
1.6
4.7
9.9
9.9
Alcoholic Beverages, Tobacco & Narcotics
0.2
-1.3
0.0
0.0
-0.3
4.4
4.4
Clothing & Footwear
6.3
1.7
0.2
-0.2
3.9
1.6
1.5
Housing, Water, Electricity, Gas & Other Fuels
25.8
0.0
-0.2
0.8
5.5
-0.4
-0.4
Furnishings, Household Equipment & Maintenance
4.8
0.2
-0.4
0.0
3.4
2.3
2.2
Health
1.3
0.0
0.0
0.0
0.3
1.4
0.6
Transport
9.1
0.5
-0.1
1.8
2.2
1.7
2.7
Information & Communication
4.2
-0.3
-0.3
0.0
2.0
-0.2
0.0
Recreation, Sport & Culture
1.1
0.3
-0.2
0.0
4.6
3.6
2.6
Education
1.6
0.0
-0.3
0.0
2.6
1.6
1.5
Restaurants & Accommodation Services
1.4
0.0
-0.3
0.0
0.6
6.8
6.8
Insurance & Financial Services
0.5
0.0
0.0
0.0
0.0
0.0
0.0
Personal Care, Social Protection & Misc.
1.7
0.5
0.3
0.0
3.6
2.0
1.9
ALL ITEMS — Headline Inflation
100.0
0.2
0.3
1.1
4.3
4.9
5.0
Food (Selected)
40.5
0.0
0.8
1.7
4.1
10.1
10.1
Non-Food (Selected)
59.5
0.3
-0.2
0.6
4.4
0.9
1.1
Annual Inflation by Category — April 2026 (%)
Inflation Shift — April 2025 vs April 2026 by Category (%)
Inflation Alert — Food-Led Price Surge: Zanzibar's food inflation at 9.9% is the dominant inflationary force in April 2026, driven by demand pressures in local markets and the pass-through of higher fuel costs into food supply chains. With food items accounting for 41.9% of the consumption basket — significantly higher than the mainland's 28.2% — food price shocks have a proportionally larger impact on household welfare in Zanzibar. The persistence of 9.9% food inflation since March 2026 suggests supply-side constraints have not yet eased.
Source: BOT MER May 2026, Chart 3.1.2 | OCGS & BOT Computations
Rising fuel prices are a key transmission channel for inflation in Zanzibar. Petroleum pump prices rose significantly from 2025 levels through early 2026, with the escalation of geopolitical tensions in the Middle East pushing up global crude prices. Petrol and diesel prices reached their highest levels of the period in early 2026, before moderating slightly. Kerosene — widely used by lower-income households for cooking and lighting — also saw sustained price increases, compounding welfare impacts.
Zanzibar Monthly Average Retail Pump Prices — Petrol, Diesel & Kerosene (TZS per litre)
Petrol Price (Apr-26 est.)
TZS 3,450
Per litre (approx.)
↑ significantly vs Apr-25
Diesel Price (Apr-26 est.)
TZS 3,300
Per litre (approx.)
↑ geopolitics-driven
Kerosene (Apr-26 est.)
TZS 2,950
Per litre (approx.)
↑ welfare impact
Fuel-Inflation Nexus: Transport inflation in Zanzibar rose to 2.7% annually in April 2026, driven directly by higher pump prices. Since Zanzibar relies heavily on imported petroleum products — with fuel and lubricants comprising a notable share of its import bill — global oil price volatility poses an outsized risk to domestic price stability. The BOT notes that this vulnerability is expected to persist as long as geopolitical tensions in the Middle East remain elevated.
3.2 Government Budgetary Operations — Zanzibar
Source: BOT MER May 2026, Section 3.2 | Ministry of Finance & Planning, Zanzibar
Zanzibar's government revenue performance in April 2026 was exceptionally strong, with total domestic revenue and grants reaching TZS 249.2 billion — surpassing the monthly target by 35 percent. The outperformance was largely driven by substantial grant receipts of TZS 76.4 billion. Domestic revenue of TZS 172.8 billion was equivalent to 97.1% of its target, reflecting solid tax collection underpinned by robust tourism activity.
However, expenditure remained high at TZS 372.5 billion, with development spending comprising 74% of total outlays — reflecting the government's continued prioritisation of capital investment and infrastructure. This spending pattern resulted in an overall fiscal deficit of TZS 123.3 billion, fully financed through domestic borrowing, a structural feature of Zanzibar's fiscal architecture.
Total Revenue & Grants
TZS 249Bn
April 2026
35% above monthly target
Domestic Revenue
TZS 173Bn
97.1% of target
Total Expenditure
TZS 373Bn
Dev. spending: 74%
Overall Fiscal Deficit
TZS 123Bn
Financed domestically
Government Revenue — April 2026: 2025 Actuals vs 2026 Estimates vs 2026 Actuals (TZS Billions)
Government Expenditure Structure — April 2026 (TZS Billions)
Zanzibar Government Revenue — April 2026 Detailed Breakdown (TZS Billions)
Revenue Component
2025 Actuals
2026 Estimates
2026 Actuals
Variance vs Target
Tax on Imports
28.4
32.7
32.7
0%
VAT & Excise Duties (Local)
32.7
64.5
53.0
-11.5 (below)
Income Tax
43.6
27.3
28.0
+2.6%
Other Taxes
22.2
36.7
48.1
+31.1%
Non-Tax Revenue
31.4
19.4
11.0
-43.3% (below)
Grants
17.3
2.5
76.4
+2,956%
TOTAL Revenue & Grants
175.6
183.1
249.2
+35.0%
Zanzibar Government Expenditure — April 2026 (TZS Billions)
Expenditure Category
2025 Actuals
2026 Estimates
2026 Actuals
Share of Total
Wages & Salaries
67.2
67.4
78.8
21.1%
Other Recurrent Expenditure
73.3
29.4
17.9
4.8%
Development Expenditure
67.7
275.7
275.7
74.0%
TOTAL Expenditure
208.2
372.5
372.5
100%
Note: Of total development expenditure, 73.2% was domestically financed. Overall deficit TZS 123.3 billion, financed through domestic borrowing.
Zanzibar Fiscal Position — Revenue vs Expenditure April 2026 (TZS Billions)
Fiscal Strength — Development-Oriented Budget: The 35% revenue overperformance and continued prioritisation of development spending (74% of expenditure) underline Zanzibar's commitment to capital investment. The TZS 76.4 billion in grants — far exceeding the TZS 2.5 billion estimate — was the critical factor in the revenue surplus. Tax on imports and other taxes also outperformed, benefiting from the strong tourism economy. The challenge remains non-tax revenue underperformance (only 56.4% of target), which points to potential gaps in fees, levies and administrative collection.
3.3 External Sector Performance — Zanzibar
Source: BOT MER May 2026, Section 3.3 | Tables 3.3.1, 3.3.2, 3.3.3
Zanzibar's external sector delivered a strong performance in the year ending April 2026, with the current account improving by 18.5% to record a surplus of USD 842 million. The improvement was driven primarily by the dominance of service receipts — mainly tourism — which accounted for 96% of total export earnings. Meanwhile, the goods account deteriorated, with the goods deficit widening to USD 598.9 million as imports grew faster than goods exports.
Tourism remains the engine of Zanzibar's external earnings. Tourist arrivals grew 21.7% to 944,056 visitors in the year ending April 2026, generating service receipts of USD 1,553.8 million — a 20.7% annual increase. Clove exports provided the standout performance in goods, with export values surging on the back of higher global prices (clove unit price rising to USD 6,778.9 per tonne from USD 4,829.9 a year earlier).
Current Account Surplus
$842M
Year ending Apr 2026
+18.5% from 2025
Total Exports G&S
$1,618M
Year ending Apr 2026
+22.4% annual growth
Total Imports G&S
$784.6M
Year ending Apr 2026
+25.2% annual growth
Tourism Arrivals
944,056
Year ending Apr 2026
+21.7% growth
Current Account Balance — Year Ending April 2025 vs 2026 (USD Millions)
Exports of Goods & Services — Year Ending April (USD Millions)
Source: BOT MER May 2026, Table 3.3.2 | TRA & BOT Computations
Clove Export Value — Monthly Data: Apr 2025 to Apr 2026 (USD '000)
Services Receipts by Category — Year Ending April (USD Millions)
Zanzibar Exports of Goods — Detailed Breakdown (USD Millions / USD per Tonne)
Commodity / Metric
Unit
Apr-25
Mar-26
Apr-26p
Year 2025
Year 2026p
% Change
TRADITIONAL EXPORTS — CLOVES
Clove Export Value
'000 USD
662.7
5,127.0
4,173.8
3,328.2
38,654.7
>100%
Clove Volume
'000 Tonnes
0.2
0.7
0.6
0.7
5.7
>100%
Clove Unit Price
USD/Tonne
3,050.4
6,844.5
6,862.1
4,829.9
6,778.9
+40.4%
NON-TRADITIONAL EXPORTS
Seaweeds — Value
'000 USD
347.9
21.3
28.5
3,654.6
1,422.5
-61.1%
Seaweeds — Unit Price
USD/Tonne
522.3
525.3
525.3
561.1
547.1
-2.5%
Manufactured Goods
'000 USD
110.0
925.2
878.0
14,693.4
11,131.3
-24.2%
Fish & Fish Products
'000 USD
232.1
71.9
80.5
1,570.9
642.1
-59.1%
Other Exports
'000 USD
474.8
1,663.2
2,198.7
10,519.8
12,242.1
+16.4%
Sub-total (Non-Traditional)
'000 USD
1,164.8
2,681.6
3,185.7
30,438.7
25,438.0
-16.4%
GRAND TOTAL — All Exports
'000 USD
1,827.5
7,808.6
7,359.5
33,766.9
64,092.7
+89.8%
Zanzibar Goods Exports Composition — Year Ending April 2025 vs 2026 (USD '000)
Cloves — Zanzibar's Export Powerhouse in 2026: Clove export revenues surged to USD 38.65 million in the year ending April 2026, up from USD 3.33 million — an extraordinary increase driven by both volume growth (0.7 to 5.7 thousand tonnes) and a 40.4% rise in global clove prices (from USD 4,829 to USD 6,779 per tonne). This singular commodity shift transformed Zanzibar's total goods export performance. However, the dependence on a single crop for export dynamism also highlights vulnerability: a price correction or production shortfall could rapidly reverse these gains. Diversification — particularly in manufactured goods and marine products — remains a strategic imperative.
Source: BOT MER May 2026, Table 3.3.3 | TRA & BOT Computations
Imports by Broad Category — Year Ending April 2025 vs 2026 (USD Millions)
Import Structure by Category — Year Ending April 2026 (%)
Zanzibar Imports of Goods — Detailed Breakdown (USD Millions)
Category / Sub-item
Apr-25
Mar-26
Apr-26p
Year 2025
Year 2026p
% Change
CAPITAL GOODS
Total Capital
4.8
22.6
15.2
66.1
160.6
>100%
— Machinery & Mechanical Appliances
1.9
5.6
4.6
24.4
49.3
>100%
— Industrial Transport Equipment
1.3
10.3
5.4
21.5
56.0
>100%
— Electrical Machinery & Equipment
1.0
5.3
3.9
13.7
41.4
>100%
INTERMEDIATE GOODS
Total Intermediate
35.3
34.9
33.4
391.2
402.1
+2.8%
— Industrial Supplies (incl. iron & steel)
11.8
17.9
16.5
118.8
186.6
+57.0%
— Fuel & Lubricants
13.3
9.6
7.8
159.1
105.1
-34.0%
— Food & Beverages (Industrial Use)
7.6
3.8
5.0
76.2
64.3
-15.6%
CONSUMER GOODS
Total Consumer
5.6
8.8
9.0
69.1
100.3
+45.1%
— Food & Beverages (Household)
1.3
1.7
1.6
17.3
18.4
+5.9%
— Non-industrial Transport Equipment
0.2
0.2
0.3
2.2
3.0
+37.6%
— Other Consumer Goods
4.1
6.1
6.8
49.5
75.2
+52.0%
TOTAL IMPORTS (f.o.b.)
45.7
66.3
57.5
526.4
663.0
+26.0%
Import Analysis: Zanzibar's import growth of 26% reflects the island's ongoing development trajectory. Capital goods imports more than doubled, driven by machinery, industrial transport equipment and electrical goods — consistent with active construction and infrastructure projects. Consumer goods rose 45.1%, reflecting growing domestic demand stimulated by tourism income. Notably, fuel and lubricants imports fell 34%, suggesting either improved energy efficiency, fuel sourcing changes, or the earlier period of lower global oil prices before the April 2026 surge. The fuel decline partially offsets the overall import expansion.
Zanzibar vs. Tanzania Mainland — Inflation Comparison
Source: BOT MER May 2026, Sections 2.1 & 3.1 | NBS & OCGS Data
Headline Inflation — Zanzibar vs. Tanzania Mainland (%)
Key Inflation Metrics — Zanzibar vs. Mainland, April 2026 (%)
Zanzibar vs. Tanzania Mainland — Inflation Comparison Table
Metric
Zanzibar Apr-25
Zanzibar Mar-26
Zanzibar Apr-26
Mainland Apr-25
Mainland Mar-26
Mainland Apr-26
Headline Inflation (%)
4.3
4.9
5.0
3.2
3.2
4.0
Food Inflation (%)
4.1
10.1
9.9 / 10.1
5.3
5.5
5.7
Non-Food Inflation (%)
4.4
0.9
1.1
—
2.1
3.3
Transport Inflation (%)
2.2
1.7
2.7
2.1
4.2
9.2
Housing/Energy Inflation (%)
5.5
-0.4
-0.4
3.8
1.6
1.7
Food Basket Weight (%)
41.9%
28.2%
Restaurants & Accommodation (%)
0.6
6.8
6.8
1.6
2.1
1.8
MoM Headline (%)
0.2
0.3
1.1
0.4
0.8
1.3
Key Structural Differences: Zanzibar's higher food basket weight (41.9% vs. 28.2%) makes it more vulnerable to food inflation shocks. In April 2026, Zanzibar's food inflation at ~10% far exceeds the mainland's 5.7%, reflecting the more import-dependent and less agriculturally diversified nature of the island economy. Conversely, transport inflation is significantly lower in Zanzibar (2.7%) vs. mainland (9.2%), potentially reflecting different fuel subsidy structures or the composition of local transport services. Zanzibar's housing/energy category is actually in deflation (-0.4%), contrasting with mainland's +1.7% — a divergence worth monitoring.
Data Sources & Attribution: Bank of Tanzania Monthly Economic Review — May 2026, Section 3.0 (Economic Performance in Zanzibar) | Tables 3.1.1, 3.2.1, 3.2.2, 3.3.1, 3.3.2, 3.3.3 | Office of the Chief Government Statistician (OCGS), Zanzibar | Ministry of Finance and Planning, Zanzibar | Tanzania Revenue Authority | Bank of Tanzania Computations. Base year for Zanzibar CPI: July 2022 = 100. Base year for Tanzania mainland CPI: 2020 = 100. All data compiled and analysed by Tanzania Investment and Consultant Group Ltd (TICGL) / Tanzania Economic Research Institute (TERI). Contact: economist@ticgl.com | +255 768 699 002 | ticgl.com
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Tanzania Economic Review May 2026 | Inflation, Interest Rates & Monetary Policy | TICGL
TICGL / TERI — Economic Research Publication
Tanzania Economic Review: Inflation, Interest Rates & Monetary Policy — May 2026
A comprehensive analysis of Tanzania's macroeconomic performance drawing on the Bank of Tanzania Monthly Economic Review (May 2026) and the NBS National Consumer Price Index (December 2025). Covering headline inflation, lending and deposit interest rates, monetary aggregates, external sector performance, and government fiscal operations.
📅 Published: June 2026📊 Sources: BOT MER May 2026 | NBS NCPI Dec 2025🔬 TICGL/TERI Research
4.0%
Headline Inflation
↑ Apr 2026
15.33%
Overall Lending Rate
↑ from 15.11%
8.54%
Overall Deposit Rate
↑ from 8.33%
5.75%
Central Bank Rate
Unchanged
2,612
TZS/USD
↑ 2.7% Appreciation
22.0%
M3 Money Supply
Growth Apr 2026
$5,722M
Forex Reserves
4.4 months
1. Tanzania Inflation — April 2026 & December 2025 Overview
Sources: NBS NCPI Dec 2025 | BOT MER May 2026 (Table 2.1.1 & Table A9)
Headline Inflation
4.0%
April 2026 (annual)
↑ from 3.2% (Mar 2026)
Food Inflation
5.7%
April 2026 (annual)
↑ from 5.5% (Mar 2026)
Core Inflation
3.1%
April 2026 (annual)
↑ from 2.2% (Mar 2026)
Energy/Fuel Inflation
5.3%
April 2026 (annual)
↑ from 2.1% (Mar 2026)
Headline Inflation Trend — Jan 2024 to Apr 2026 (%)
Inflation by Category — Annual % Change, April 2026
Tanzania NCPI — Monthly Inflation by Main Groups (Annual % Change, Base 2020=100)
Main Group
Weight (%)
Apr-25 MoM
Mar-26 MoM
Apr-26 MoM
Apr-25 Annual
Mar-26 Annual
Apr-26 Annual
Food & Non-Alcoholic Beverages
28.2
0.7
1.8
0.9
5.3
5.5
5.7
Alcoholic Beverages & Tobacco
1.9
0.1
0.1
0.3
3.4
2.1
2.3
Clothing & Footwear
10.8
0.0
0.5
0.3
2.0
1.3
1.6
Housing, Water, Electricity, Gas & Other Fuels
15.1
0.8
0.7
0.9
3.8
1.6
1.7
Furnishings, Household Equipment
7.9
0.2
0.1
0.4
2.3
2.3
2.6
Health
2.5
0.2
0.4
0.6
1.5
1.1
1.6
Transport
14.1
0.4
0.5
5.2
2.1
4.2
9.2
Information & Communication
5.4
0.0
0.0
0.0
0.1
1.0
1.0
Recreation, Sport & Culture
1.6
0.1
0.1
0.3
1.7
0.6
0.7
Education Services
2.0
0.0
0.6
1.6
4.1
0.9
2.6
Restaurants & Accommodation
6.6
0.3
0.4
0.1
1.6
2.1
1.8
Insurance & Financial Services
2.1
0.2
0.1
0.0
0.8
0.3
0.1
Personal Care & Miscellaneous
2.1
0.1
0.3
0.2
3.0
3.3
3.5
ALL ITEMS (Headline)
100.0
0.4
0.8
1.3
3.2
3.2
4.0
Core Index
73.9
0.2
0.3
1.1
2.2
2.2
3.1
Non-Core Index
26.1
1.0
2.3
1.7
5.7
5.6
6.3
Energy, Fuel & Utilities
5.7
1.9
2.1
5.1
7.3
2.1
5.3
Services Index
37.2
0.2
0.3
1.8
1.1
2.4
4.0
Goods Index
62.8
0.5
1.2
1.0
4.3
3.6
4.0
All Items Less Food & Non-Alc Beverages
71.8
0.3
0.4
1.5
2.3
2.1
3.3
Key Finding: Tanzania's headline inflation jumped from 3.2% in March 2026 to 4.0% in April 2026 — the highest level in the current measurement period. The primary driver was transport inflation surging to 9.2% annually, reflecting pass-through effects of rising global fuel prices linked to the Middle East geopolitical conflict. Food inflation at 5.7% and energy/fuel inflation at 5.3% compounded pressures. Core inflation rising to 3.1% signals that inflationary pressures are becoming more broadly entrenched beyond volatile components.
NBS NCPI December 2025 — Full Year Inflation Comparison (2024 vs 2025)
Indicator
2024 Avg
2025 Avg
Change
Headline Inflation
3.1%
3.3%
+0.2pp
Food Inflation
2.1%
6.4%
+4.3pp
Non-Food Inflation
3.5%
2.0%
-1.5pp
Core Inflation
3.4%
2.2%
-1.2pp
Non-Core Inflation
2.2%
6.2%
+4.0pp
Dec 2025 NCPI Index
116.87
121.11
+3.6%
Dec Headline Rate
3.1%
3.6%
+0.5pp
NBS Finding: Food inflation dominated 2025, rising from 2.1% to 6.4%. Core inflation actually declined, confirming that 2025 inflationary pressures were primarily food and supply-chain driven rather than structural monetary causes.
2. Tanzania Interest Rates — Lending & Deposit Rate Analysis
Focus Section | Source: BOT MER May 2026, Table 2.3.1 & Table A4
Tanzania's interest rate environment in April 2026 is characterised by stubbornly high lending rates alongside gradually rising deposit rates — a combination that sustains a significant spread between what borrowers pay and what savers earn. Understanding this dynamic is critical for investment decisions, business financing costs, and household savings behaviour.
The Bank of Tanzania's Monetary Policy Committee (MPC) held the Central Bank Rate (CBR) at 5.75% through Q2 2026, while simultaneously narrowing the CBR corridor from 200 basis points to 150 basis points to strengthen monetary policy transmission.
Overall Lending Rate
15.33%
April 2026
↑ from 15.11% in Mar-26
Negotiated Lending Rate
12.56%
April 2026 (Prime customers)
↑ from 12.21% in Mar-26
Overall Deposit Rate
8.54%
April 2026
↑ from 8.33% in Mar-26
12-Month Deposit Rate
9.81%
April 2026
↑ from 9.60% in Mar-26
Lending Rate vs. Deposit Rate Trend — Mar 2025 to Apr 2026 (%)
Short-Term Interest Rate Spread (Lending minus Deposit) — %
Tanzania Bank Interest Rates — Full Structure (%) | Apr 2025 to Apr 2026
Interest Rate Type
Apr-25
Dec-25
Jan-26
Feb-26
Mar-26
Apr-26
12-mo Change
LENDING RATES
Overall Lending Rate
15.16
15.24
15.10
15.11
15.11
15.33
+0.17pp
Short-Term Lending Rate (≤1 year)
16.15
15.46
15.49
15.41
15.45
15.31
-0.84pp
Negotiated Lending Rate (Prime)
12.88
12.38
12.25
12.19
12.21
12.56
-0.32pp
DEPOSIT RATES
Overall Time Deposit Rate
7.82
8.36
8.33
8.32
8.33
8.54
+0.72pp
12-Month Deposit Rate
9.27
9.58
9.70
9.82
9.60
9.81
+0.54pp
Negotiated Deposit Rate
10.52
11.66
11.74
11.48
11.57
11.37
+0.85pp
Savings Deposit Rate
2.89
3.02
2.94
2.98
2.89
2.91
+0.02pp
SPREAD & POLICY RATES
Short-Term Interest Rate Spread
6.88
5.88
5.79
5.59
5.85
5.50
-1.38pp
Central Bank Rate (CBR)
5.30
5.75
5.75
5.75
5.75
5.75
+0.45pp
Lombard Rate
8.00
7.75
7.75
7.75
7.75
7.75
-0.25pp
Repo Rate
5.30
5.75
5.75
5.75
5.75
5.75
+0.45pp
Overall T-Bill Rate (Weighted Avg)
8.86
5.87
5.89
5.68
5.21
5.06
-3.80pp
Lending Rates by Tenor — April 2026 vs. April 2025 (%)
Deposit Rates by Tenor — April 2026 (%)
Treasury Bill Rates by Tenor — Mar 2025 to Apr 2026 (%)
Interest Rate Insight — High Spread Constrains Credit: The spread between overall lending rates (15.33%) and the Central Bank Rate (5.75%) stands at approximately 9.58 percentage points. While this spread has been narrowing year-on-year (from 6.88pp in Apr-25 to 5.50pp short-term spread in Apr-26), it remains exceptionally high by international standards. This constrains credit access for SMEs and long-term investment, and partially explains why private sector credit growth (23.6%) is concentrated in trade and personal loans rather than in manufacturing or capital investment. The BOT's decision to narrow the CBR corridor signals an intent to improve monetary policy transmission and gradually reduce this gap.
Foreign Currency Interest Rates (USD-denominated) — April 2026 vs. April 2025
Foreign Currency Rate
Apr-25
Mar-26
Apr-26
12-mo Change
Overall FC Lending Rate
8.89%
8.70%
8.96%
+0.07pp
FC Short-Term Lending (≤1yr)
9.97%
10.00%
10.07%
+0.10pp
FC Long-Term Lending (3-5yr)
8.36%
9.09%
9.19%
+0.83pp
Overall FC Deposit Rate
2.94%
4.26%
4.41%
+1.47pp
FC 12-Month Deposit Rate
3.01%
4.35%
4.83%
+1.82pp
FC Savings Rate
0.53%
1.22%
1.68%
+1.15pp
FC-TZS Lending Spread
~6.27pp
~6.41pp
~6.37pp
Broadly stable
3. Monetary Policy & Money Supply (M3)
Source: BOT MER May 2026, Sections 2.2 & Table 2.2.1
CBR (Policy Rate)
5.75%
Q2 2026 (Unchanged)
M3 Money Supply
22.0%
Annual growth, Apr 2026
↓ from 23.2% (Mar-26)
Private Sector Credit
23.6%
Annual growth, Apr 2026
↓ from 24.3% (Mar-26)
M3 Stock
TZS 65.1T
April 2026 (billion)
M3 Money Supply — Growth Rate Trend (%)
Credit to Private Sector by Sector — Growth Rate Apr 2026 (%)
4. Financial Markets — Government Securities & Interbank
Source: BOT MER May 2026, Section 2.4 & Table A4
T-Bill Weighted Avg Yield
5.06%
Apr 2026 (overall)
↓ from 5.21% (Mar-26)
5-Year Bond Yield
9.54%
April 2026
↓ from 10.54%
10-Year Bond Yield
9.40%
April 2026
↓ from 11.30%
IBCM Rate (Overall)
7.32%
April 2026
↑ from 6.32% (Mar-26)
Treasury Bill Rates by Tenor — Apr 2025 to Apr 2026 (%)
Government Bond Yields — Historical Comparison (%)
Government Securities Market: Tanzania's government securities market remains highly active and oversubscribed, with April 2026 T-bill auctions attracting TZS 859.5 billion in bids against a TZS 429.8 billion tender — a 2x oversubscription ratio. Bond yields have trended significantly downward from their 2025 highs, with the 10-year bond yield declining from 14.26% (Apr-25) to 9.40% (Apr-26). This yield compression reflects improved government credibility, strong investor demand, and the BOT's liquidity management operations.
Source: BOT MER May 2026, Section 2.7 & Table 2.7.1, A5, A6, A7
Total Exports (Year Apr-26)
$18.9Bn
+13.5% annual growth
Total Imports (Year Apr-26)
$19.9Bn
+15.5% annual growth
Forex Reserves
$5,722M
4.4 months import cover
TZS/USD Rate
2,612
+2.7% appreciation (Apr-26)
Tanzania Exports — Top Commodities Year-Ending April 2026 vs 2025 (USD Millions)
Tanzania Current Account Balance (Year-Ending April, USD Millions)
Current Account Summary — Year Ending April (USD Millions)
Account Item
2024
2025
2026p
% Change
Exports of Goods
9,121.6
9,682.7
11,215.0
+15.8%
Imports of Goods
14,195.6
14,236.3
16,568.5
+16.4%
Services Receipts
6,846.8
6,942.3
7,661.7
+10.4%
Services Payments
2,795.0
3,034.2
3,376.1
+11.3%
Export of Goods & Services
14,281.7
16,625.0
18,876.7
+13.5%
Import of Goods & Services
16,110.2
17,270.5
19,944.6
+15.5%
Current Account Balance
-2,769.1
-2,112.1
-2,651.8
+25.6%
Forex Reserves (USD Mn)
5,546.9
6,329.0
5,722.5
—
Import Cover (Months)
4.5
4.9
4.4
—
6. Government Fiscal Operations — Revenue & Expenditure
Source: BOT MER May 2026, Section 2.5 & Table A2
Total Revenue (Mar 2026)
TZS 3,837Bn
8.5% above target
Tax Revenue (Mar 2026)
TZS 3,318Bn
10.8% above target
Total Expenditure (Mar 2026)
TZS 4,273Bn
Development: TZS 1,728Bn
Income Tax (Mar 2026)
TZS 1,548Bn
17.2% above target
Revenue Components — March 2026: Actual vs Target (TZS Billions)
Expenditure Structure — March 2026 (TZS Billions)
7. National Debt Developments
Source: BOT MER May 2026, Section 2.6 & Table A10, Tables 2.6.1–2.6.6
Total National Debt
$51,067M
End April 2026
↑ 0.5% from Mar-26
External Debt Stock
$35,950M
70.4% of total debt
Domestic Debt Stock
TZS 39,336Bn
+2.3% from Mar-26
Public Ext. Debt Share
82.7%
Of total external debt
External Debt by Creditor — April 2026 (USD Millions)
External Debt Currency Composition — April 2026 (%)
Domestic Debt by Borrowing Instrument — April 2026 vs April 2025 (TZS Billions)
Instrument
Apr-25 (TZS Bn)
Share
Mar-26 (TZS Bn)
Apr-26 (TZS Bn)
Share
Government Securities
29,582.4
85.1%
33,321.1
33,438.1
85.0%
— Treasury Bills
1,935.6
5.6%
1,575.3
1,518.7
3.9%
— Government Bonds
27,459.6
79.0%
31,609.9
31,783.7
80.8%
Non-Securitized Debt (Overdraft)
5,159.1
14.8%
5,126.8
5,897.6
15.0%
Total Domestic Debt
34,759.9
100%
38,447.9
39,335.8
100%
8. NBS Consumer Price Index Detail — December 2025
Source: NBS NCPI Press Release, December 2025 (Ref: AC 334/376/01/374)
NCPI December 2025 — All Main Groups (Index Value 2020=100 & Annual Change)
S/N
Main Group
Weight %
Dec-24 Index
Nov-25 Index
Dec-25 Index
1-Month %
12-Month %
1
Food & Non-Alcoholic Beverages
28.2
124.27
129.98
132.56
2.0
6.7
2
Alcoholic Beverages & Tobacco
1.9
110.33
113.67
114.08
0.4
3.4
3
Clothing & Footwear
10.8
113.17
115.26
115.46
0.2
2.0
4
Housing, Water, Electricity, Gas & Other Fuels
15.1
115.59
117.70
118.27
0.5
2.3
5
Furnishings, Household Equipment & Maintenance
7.9
114.38
117.61
117.81
0.2
3.0
6
Health
2.5
108.43
109.70
109.79
0.1
1.3
7
Transport
14.1
118.37
121.50
123.19
1.4
4.1
8
Information & Communication
5.4
106.16
106.49
106.70
0.2
0.5
9
Recreation, Sport & Culture
1.6
110.54
110.89
110.82
-0.1
0.3
10
Education Services
2.0
108.84
112.01
112.01
0.0
2.9
11
Restaurants & Accommodation Services
6.6
116.39
117.49
117.48
0.0
0.9
12
Insurance & Financial Services
2.1
101.92
102.27
102.34
0.1
0.4
13
Personal Care, Social Protection & Misc.
2.1
116.64
118.40
118.09
-0.3
1.2
TOTAL — ALL ITEMS INDEX
100.0
116.87
120.01
121.11
0.9
3.6
Core Index
73.9
114.45
116.77
117.26
0.4
2.5
Non-Core Index
26.1
123.73
129.21
132.04
2.2
6.7
Energy, Fuel & Utilities Index
5.7
125.25
129.33
131.02
1.3
4.6
Services Index
37.2
111.81
113.49
114.03
0.5
2.0
Goods Index
62.8
119.86
123.87
125.31
1.2
4.5
NCPI Movement Dec 2024 to Dec 2025 — Index Value & Inflation Rate
Dec 2025 Annual Inflation by Category (12-Month % Change)
Data Sources: Bank of Tanzania Monthly Economic Review — May 2026 | National Bureau of Statistics, National Consumer Price Index (NCPI) Press Release — December 2025 (Ref: AC 334/376/01/374) | NBS Statistical Tables A9(i)–A9(iv) | BOT Statistical Tables A2–A10 | Ministry of Finance, Tanzania | Tanzania Revenue Authority | NFRA (National Food Reserve Agency). Data compiled and analysed by Tanzania Investment and Consultant Group Ltd (TICGL) / Tanzania Economic Research Institute (TERI). economist@ticgl.com | +255 768 699 002 | ticgl.com
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