Tanzania Government Domestic Debt by Creditor Category (2026) | TICGL Analysis
TICGL Economic Research (TERI) — Domestic Debt BriefSource: Bank of Tanzania & Ministry of Finance, Monthly Economic Review, June 2026
Tanzania Investment and Consultant Group Ltd · TICGL Economic
Who Finances Tanzania's Government? A Creditor-Category Breakdown of Domestic Debt
Commercial banks and pension funds now hold 55 percent of Tanzania's TZS 39.26 trillion domestic debt, while the Bank of Tanzania's exposure keeps shrinking. Here's the full creditor picture — with data, charts and what it means for private-sector credit.
Domestic debt by creditor: banks and pension funds now carry the load
Tanzania's government domestic debt (excluding liquidity papers) stood at TZS 39,257.3 billion at end-May 2026, marginally down from TZS 39,335.8 billion in April as the government drew down its Bank of Tanzania overdraft. The creditor base has shifted steadily over the past year: commercial banks (28.4%) and pension funds (26.6%) together now hold 55.0 percent of all domestic debt, while the Bank of Tanzania's own share has fallen from 20.3 percent to 19.0 percent — consistent with planned reforms to cut the central bank's overdraft ceiling from 18 to 14 percent of prior-year government revenue. Government bonds remain the dominant instrument, at 81.3 percent of the stock, with the overdraft facility making up 14.4 percent.
TZS 11,149.8bn
Commercial banks' holdings
TZS 10,441.4bn
Pension funds' holdings
TZS 7,455.1bn
Bank of Tanzania's holdings
TZS 5,646.4bn
Overdraft facility balance
TZS 367.7bn
Domestic debt serviced, May-26
Companion Reading
What's Next for Tanzania's Economy? The Policy Gaps Keeping USD 1 Trillion Out of Reach by 2050
Domestic debt management is one of the structural levers TICGL flags in its 2050 growth-gap study — see how financing choices today shape Tanzania's long-term growth trajectory.
Six creditor groups fund Tanzania's domestic debt. Over the twelve months to May 2026, pension funds grew their exposure fastest in absolute terms, commercial banks retained the largest single share, and the Bank of Tanzania's participation continued to decline as a matter of policy.
Domestic debt by creditor category
TZS billion — May-25, Apr-26 and May-26 compared
Creditor share, May 2026
Percentage of total domestic debt stock (excl. liquidity papers)
Government domestic debt by creditor category (TZS billion)
Source: Ministry of Finance and Bank of Tanzania (Table 2.6.6). p = provisional data. YoY = year-on-year change, May-25 to May-26.
Reading the numbers: Pension funds (PSSSF, NSSF and others) grew their domestic debt holdings by 13.5 percent over the year — the fastest of the major creditor groups — reinforcing their role as Tanzania's largest long-term institutional investor base for government securities. Commercial banks remain the single biggest holder in absolute terms, which matters directly for how much balance-sheet capacity is left for private-sector lending.
Historical Context
Eight years of domestic debt growth
Government domestic debt has grown roughly 2.7-fold since May 2018 — from TZS 14,844.1 billion to TZS 39,257.3 billion — as the government leaned more heavily on the domestic securities market to fund development spending. Growth accelerated sharply between 2020 and 2022, moderated through 2023–2024, and has since stabilised near the TZS 39 trillion mark.
Government domestic debt stock, May 2018 – May 2026
TZS billion, annual snapshots (May) plus the two latest months
Source: Ministry of Finance (Chart 2.6.1, Government Domestic Debt Stock).
Cross-Check
By instrument: bonds dominate, overdraft use is easing
Looking at the same debt stock by instrument rather than creditor confirms the story: government bonds make up 81.3 percent of domestic debt, Treasury bills just 4.0 percent, and the Bank of Tanzania overdraft facility 14.4 percent — down from 15.0 percent the month before, the main reason the total stock dipped between April and May 2026.
Domestic debt by borrowing instrument
TZS billion, stacked by instrument type
Domestic debt by borrowing instrument (TZS billion)
Instrument
May-25
Apr-26
May-26p
Share May-26
Government bonds
27,774.8
31,783.7
31,912.3
81.3%
Overdraft (BOT)
5,198.2
5,897.6
5,646.4
14.4%
Treasury bills
2,022.6
1,518.7
1,562.8
4.0%
Government stocks
187.1
135.7
135.7
0.3%
Total
35,201.1
39,335.8
39,257.3
100%
The Bank of Tanzania Act amendment (Cap. 197) will lower the government's overdraft ceiling from 18% to 14% of the prior year's actual revenue starting FY2026/27 — expect the overdraft's share of domestic debt to keep trending down, with more financing shifting to bonds held by banks and pension funds.
Source: Ministry of Finance and Bank of Tanzania (Table 2.6.5). p = provisional data.
Cash Flow
May 2026: new issuance vs. debt servicing
The government raised TZS 278.8 billion in new domestic securities in May 2026 — TZS 128.6 billion from Treasury bonds and TZS 150.2 billion from Treasury bills — while servicing TZS 367.7 billion of existing domestic debt (TZS 106.1 billion in principal and TZS 261.6 billion in interest). Debt servicing exceeded new issuance in the month, consistent with the modest net decline in the total domestic debt stock.
Issuance vs. servicing, May 2026
TZS billion
Reading it
Interest payments (TZS 261.6bn) made up 71 percent of total domestic debt servicing in May 2026 — a reminder that as the stock of government bonds grows, so does the recurring interest bill competing with development spending in the budget.
New issuance was tilted toward Treasury bills (54%) over bonds (46%) in May, a short-term skew that can reflect either investor demand at the time of the auction or deliberate cash-flow management by the government.
Source: Bank of Tanzania (Chart 2.6.2, Issued Government Securities for Financing Purposes).
Pricing Context
Why creditors keep buying: the domestic yield curve
Treasury yields eased across the curve in May 2026 amid ample banking-system liquidity, but long-dated paper still offers pension funds and insurers attractive real returns relative to the 12-month deposit rate (10.17%) — helping explain why long-term institutional investors keep adding to their government-securities holdings.
Treasury bond yield curve — May 2026
Weighted average yield to maturity, percent
Source: Bank of Tanzania (Table A4, Interest Rates Structure).
TICGL Analysis
What this means for investors and policymakers
1. Watch bank balance-sheet capacity
Commercial banks hold TZS 11.15 trillion in government securities — capital that could otherwise support private-sector lending. With private credit growth already running above 23% y/y, any further increase in bank holdings of government paper is worth monitoring for early signs of crowding-out pressure.
2. Pension funds are the swing buyer
Pension funds' 13.5% year-on-year growth in holdings makes them the fastest-growing creditor group. Their appetite for long-dated bonds (15–25 year tenors) gives the government a relatively stable, long-duration funding base — but concentrates asset risk for the pension system.
3. BOT overdraft reform is already visible
The Bank of Tanzania's declining share (20.3% → 19.0%) and the month-on-month drop in overdraft usage both pre-empt the FY2026/27 legal cap reduction from 18% to 14% of revenue — a positive signal for monetary-fiscal separation and inflation credibility.
TICGL Economic
Related TICGL insights & tools
Continue exploring Tanzania's public finances and economy with TICGL's research library, live dashboards and researcher programme.
Deni la Ndani la Serikali kwa Kundi la Wakopeshaji — Mei 2026
Deni la ndani la Serikali (bila karatasi za ukwasi) lilifikia shilingi trilioni 39.26 mwishoni mwa Mei 2026, likishuka kidogo kutoka trilioni 39.34 mwezi Aprili, hasa kutokana na kupungua kwa matumizi ya akaunti ya "overdraft" kutoka Benki Kuu.
Benki za kibiashara zinaendelea kuwa mkopeshaji mkubwa zaidi kwa asilimia 28.4 (shilingi trilioni 11.15), zikifuatiwa na mifuko ya hifadhi ya jamii (mifuko ya pensheni) kwa asilimia 26.6 (shilingi trilioni 10.44) — ikiwa ndiyo kundi lililokua kwa kasi zaidi kwa mwaka mzima (asilimia 13.5). Benki Kuu ya Tanzania (BOT) imepunguza mchango wake kutoka asilimia 20.3 hadi asilimia 19.0 kwa mwaka, sambamba na mpango wa kupunguza kikomo cha "overdraft" ya Serikali kutoka asilimia 18 hadi asilimia 14 ya mapato ya mwaka uliopita, kuanzia mwaka wa fedha 2026/27.
Kwa upande wa aina ya dhamana, hati fungani za Serikali (Treasury bonds) zinaendelea kutawala kwa asilimia 81.3 ya deni lote la ndani, huku "overdraft" ikiwa asilimia 14.4 na dhamana fupi (Treasury bills) asilimia 4.0 pekee. Mwezi Mei 2026, Serikali ilikopa shilingi bilioni 278.8 mpya kupitia dhamana za ndani, huku ikilipa shilingi bilioni 367.7 za deni la zamani (bilioni 106.1 mtaji na bilioni 261.6 riba).
Maana yake kwa wawekezaji: Ushiriki mkubwa wa benki za kibiashara na mifuko ya pensheni katika ukopeshaji wa Serikali unaweza kuathiri uwezo wao wa kukopesha sekta binafsi (crowding-out effect) — jambo ambalo TICGL/TERI inaendelea kulifuatilia kwa karibu.
Tanzania External Debt 2026: Borrower, Use of Funds & Currency Mix | TICGL
TICGL Economic Research (TERI) — External Debt BriefSource: Bank of Tanzania & Ministry of Finance, Monthly Economic Review, June 2026
Tanzania Investment and Consultant Group Ltd · TICGL Economic
The Anatomy of Tanzania's External Debt: Borrower, Use of Funds & Currency Risk
USD 36.4 billion, 81 percent public, mostly financed by multilateral lenders and priced in US dollars. Here's exactly who Tanzania owes, what the money funded, and how exposed the country is to currency swings.
Tanzania's external debt stock (public and private) eased slightly to USD 36,446.8 million at end-May 2026, from USD 36,506.1 million in April, as principal repayments (USD 140 million) outpaced new disbursements (USD 125.9 million). Public debt makes up 81.1 percent of the total, with central government the dominant on-shore borrower. Multilateral institutions remain by far the largest creditor group at 57.5 percent, ahead of commercial lenders at 36.4 percent. By use, balance-of-payments/budget support and transport & telecommunication together absorb 43.6 percent of disbursed debt, while the US dollar still accounts for nearly two-thirds of currency exposure — though that share has fallen almost 4 percentage points in a year as the portfolio diversifies.
USD 29,480.8m
Central government borrowing
USD 6,558.9m
Private-sector external debt
USD 20,946.3m
Owed to multilateral creditors
USD 13,279.7m
Owed to commercial lenders
USD 1,891.0m
Total external debt arrears
Companion Reading
What's Next for Tanzania's Economy? The Policy Gaps Keeping USD 1 Trillion Out of Reach by 2050
External financing choices — who lends, on what terms, and in what currency — are central to TICGL's 2050 growth-gap study. See how today's debt structure shapes tomorrow's fiscal space.
Central government remains overwhelmingly the largest borrower of external debt, though its stock has eased slightly since late 2025 as repayments outpaced new drawdowns. Private-sector external borrowing, by contrast, has grown steadily and touched a 13-month high of USD 6,558.9 million in May 2026. Public corporations, which held a small legacy balance, had fully cleared their external debt by January 2026.
Disbursed external debt by borrower, trend
USD million, May 2025 – May 2026
Borrower share, May 2026
Percent of disbursed outstanding external debt
Disbursed external debt by borrower category (USD million)
Borrower
May-25
Nov-25
Apr-26
May-26p
Share May-26
Central government
27,047.6
29,030.3
29,589.6
29,480.8
81.8%
Private sector
5,851.2
5,645.8
6,519.0
6,558.9
18.2%
Public corporations
3.8
3.8
0.0
0.0
0.0%
Total disbursed external debt
32,902.6
34,679.9
36,108.6
36,039.7
100%
Source: Ministry of Finance and Bank of Tanzania (Table A10, item 3: Disbursed external debt by borrower category). p = provisional data.
Section 2
External debt stock by creditor category
Alongside who borrows, it matters just as much who lends. Multilateral institutions — the World Bank's IDA, the African Development Bank and the IMF among them — supply well over half of Tanzania's external financing, offering longer maturities and softer terms than commercial markets. Commercial lenders are the second-largest source, at over a third of the portfolio, while bilateral and export-credit lines play a comparatively small role.
External debt stock by creditor category
USD million — May-25, Apr-26 and May-26 compared
Creditor share, May 2026
Percent of total external debt stock (incl. interest arrears)
External debt stock by creditor category (USD million)
Creditor
May-25
Share
Apr-26r
Share
May-26p
Share
Multilateral
19,007.7
56.6%
20,950.1
57.4%
20,946.3
57.5%
o/w Disbursed outstanding debt (DOD)
18,973.9
—
20,926.4
—
20,922.6
—
o/w Interest arrears
33.8
—
23.8
—
23.7
—
Commercial
12,086.2
36.0%
13,319.0
36.5%
13,279.7
36.4%
o/w Interest arrears
392.6
—
269.4
—
277.8
—
Bilateral
1,426.0
4.2%
1,561.5
4.3%
1,558.5
4.3%
Export credit
1,066.2
3.2%
675.6
1.9%
662.3
1.8%
Total external debt stock
33,586.1
100%
36,506.1
100%
36,446.8
100%
Source: Ministry of Finance and Bank of Tanzania (Tables 2.6.1 & 2.6.2). r = revised data; p = provisional data.
Concessionality check: With multilateral and bilateral creditors together holding 61.8 percent of external debt, Tanzania's external portfolio still leans concessional — a supportive factor for debt sustainability compared with peers more reliant on commercial Eurobond-style financing. Commercial creditors, however, carry the largest share of interest arrears (see arrears section below).
Section 3
Disbursed outstanding debt by use of funds
Just over 43 percent of Tanzania's disbursed external debt has gone into balance-of-payments/budget support and transport & telecommunication infrastructure — the two largest single uses. Social welfare and education absorbs a further 19.0 percent, and energy & mining 13.1 percent, reflecting the government's continued emphasis on human capital and infrastructure-led growth.
Use of funds, percentage share — May 2026
Percent of disbursed outstanding external debt
Use of funds, absolute value trend
USD million — top four uses, May-25 vs May-26
Disbursed outstanding debt by use of funds — percentage share & USD value
Activity
May-25 (%)
Apr-26 (%)
May-26p (%)
USD million, May-26
BoP & budget support
20.7
21.9
21.8
7,873.7
Transport & telecommunication
21.6
21.8
21.8
7,864.3
Social welfare & education
20.4
18.9
19.0
6,849.5
Energy & mining
12.9
13.1
13.1
4,718.3
Real estate & construction
4.6
5.1
4.9
1,751.4
Agriculture
5.1
5.1
5.3
1,902.6
Finance & insurance
4.2
4.3
4.3
1,545.5
Industries
3.6
3.7
3.7
1,320.2
Tourism
1.8
1.7
1.7
617.7
Other
5.2
4.4
4.4
1,596.7
Total
100.0
100.0
100.0
36,039.7
Source: Ministry of Finance and Bank of Tanzania (Table 2.6.3 & Table A10 item 5). p = provisional data.
Section 4
Disbursed outstanding debt by currency composition
The US dollar remains the anchor currency of Tanzania's external debt at 62.9 percent, though its share has slipped from 66.6 percent a year earlier. The Euro (15.6%) and Chinese Yuan (5.8%) make up the next largest exposures, while "other currencies" — including Special Drawing Rights and smaller bilateral-loan currencies — have nearly doubled their share, from 9.7 to 15.6 percent, pointing to gradual currency diversification in Tanzania's financing mix.
Currency composition, percentage share — May 2026
Percent of disbursed outstanding external debt
Currency composition, 12-month trend
USD million equivalent, May-25 to May-26
Disbursed outstanding debt by currency composition (% share)
Currency
May-25
Apr-26r
May-26p
Change (pp, YoY)
United States Dollar
66.6
63.0
62.9
-3.7
Euro
17.3
15.8
15.6
-1.7
Chinese Yuan
6.4
5.8
5.8
-0.6
Other currencies
9.7
15.4
15.6
+5.9
Total
100.0
100.0
100.0
—
Source: Ministry of Finance and Bank of Tanzania (Table 2.6.4 & Table A10 item 4). r = revised data; p = provisional data.
FX risk lens: A weaker US-dollar concentration is generally positive for currency-risk diversification, but the near-doubling of "other currencies" is worth monitoring closely — TICGL recommends investors and policymakers request a currency-level breakdown from the Ministry of Finance to confirm which specific currencies are driving this shift.
Section 5
Disbursements, debt service & arrears
New disbursements slowed to USD 125.9 million in May 2026 — mostly to central government — against USD 189.4 million in debt service (USD 140 million principal, USD 49.4 million interest). Net flows on external debt were negative for the month, consistent with the small decline in the overall stock. Total external debt arrears stood at USD 1,891.0 million, with commercial creditors accounting for the lion's share.
Disbursements vs. debt service
USD million, monthly, May 2025 – May 2026
External debt arrears by creditor — May 2026
USD million, principal vs. interest
External debt arrears by creditor category, May 2026 (USD million)
Creditor
Principal
Interest
Total
Share of total arrears
Commercial
1,175.7
277.8
1,453.5
76.9%
Bilateral
198.0
80.6
278.6
14.7%
Export credits
105.3
25.2
130.5
6.9%
Multilateral
4.9
23.7
28.6
1.5%
Total external debt arrears
1,483.9
407.1
1,891.0
100%
Source: Ministry of Finance and Bank of Tanzania (Table A10, items 6, 7 & 10).
TICGL Analysis
What this means for investors and policymakers
1. Concessional tilt supports sustainability
With 61.8% of external debt held by multilateral and bilateral lenders, Tanzania's average borrowing terms remain softer than a commercial-heavy portfolio — a structural cushion for debt-service costs even as global rates stay elevated.
2. Commercial arrears need attention
Commercial creditors hold just 36.4% of the debt stock but 76.9% of total arrears — signalling payment-timing strain specifically on commercial obligations that warrants closer cash-flow and hedging management.
3. Currency diversification is underway
The US-dollar share has fallen nearly 4 percentage points in a year. Combined with a strengthening shilling (+3.02% y/y against the dollar), this modestly eases near-term FX-translation risk on debt service.
TICGL Economic
Related TICGL insights & tools
Continue exploring Tanzania's public finances and economy with TICGL's research library, live dashboards and researcher programme.
Deni la Nje la Tanzania — Mkopaji, Matumizi na Sarafu, Mei 2026
Deni la nje la Tanzania (Serikali na sekta binafsi) lilifikia dola za Marekani milioni 36,446.8 mwishoni mwa Mei 2026, likishuka kidogo kutoka milioni 36,506.1 mwezi Aprili, kwani malipo ya mtaji (dola milioni 140) yalizidi mikopo mipya iliyopokewa (dola milioni 125.9). Asilimia 81.1 ya deni hili ni la Serikali, huku Serikali Kuu ikiwa mkopaji mkubwa zaidi (dola milioni 29,480.8), na sekta binafsi ikiwa na dola milioni 6,558.9.
Kwa upande wa wakopeshaji, taasisi za kimataifa (multilateral) kama Benki ya Dunia na Benki ya Maendeleo Afrika zinashikilia asilimia 57.5 ya deni la nje, zikifuatiwa na wakopeshaji wa kibiashara (asilimia 36.4), wakopeshaji wa nchi kwa nchi (bilateral, asilimia 4.3), na mikopo ya "export credit" (asilimia 1.8). Deni hili limetumika zaidi kwenye misaada ya bajeti na urari wa malipo nje (asilimia 21.8), usafirishaji na mawasiliano (asilimia 21.8), ustawi wa jamii na elimu (asilimia 19.0), na nishati na madini (asilimia 13.1).
Kwa sarafu, dola ya Marekani inaendelea kutawala kwa asilimia 62.9 ya deni la nje, ikiwa imeshuka kutoka asilimia 66.6 mwaka mmoja uliopita, huku sarafu nyingine (zisizo dola, euro au yuan) zikiongezeka kwa kasi kutoka asilimia 9.7 hadi asilimia 15.6 — ikionesha mwelekeo wa kutafuta vyanzo mbalimbali vya fedha. Malimbikizo ya madeni ya nje (arrears) yalifikia dola milioni 1,891.0, ambapo asilimia 76.9 ni ya wakopeshaji wa kibiashara pekee — eneo linalohitaji usimamizi makini wa fedha.
Maana yake: Muundo huu wa deni la nje — unaotawaliwa na wakopeshaji wa masharti nafuu (concessional) — ni jambo jema kwa uwezo wa Tanzania wa kulipa madeni yake, ingawa malimbikizo makubwa kwa wakopeshaji wa kibiashara na ongezeko la sarafu mbalimbali ni maeneo ambayo TICGL/TERI inapendekeza kufuatiliwa kwa karibu.
TICGL Economic Research (TERI) — Zanzibar Economic BriefSource: Bank of Tanzania & Office of the Chief Government Statistician, Zanzibar, June 2026
Tanzania Investment and Consultant Group Ltd · TICGL Economic
Zanzibar's Economy in 2026: Tourism and Cloves Power a Widening Surplus
Zanzibar's external surplus grew 21.2 percent on record tourist arrivals and a clove-export boom, even as inflation climbed to 5.5 percent and the government ran a TZS 175.7 billion fiscal deficit. Here's the full data picture for May 2026.
Zanzibar's headline inflation rose to 5.5 percent in May 2026, from 4.2 percent a year earlier, as food prices (up 9.9% y/y) and fuel-linked transport costs (up 5.1% y/y) outweighed easing pressure elsewhere in the basket. On the fiscal side, the government collected TZS 133.3 billion against a monthly target of TZS 216.0 billion (61.7% achievement), while a TZS 309 billion expenditure programme — nearly 60 percent of it development spending — produced a TZS 175.7 billion deficit financed domestically. The external sector was the standout performer: Zanzibar's current account surplus grew 21.2 percent to USD 864.8 million in the year ending May 2026, powered by a 21 percent jump in tourist arrivals and an extraordinary clove-export boom that lifted goods exports more than twofold.
9.9%
Food inflation, May-26
2.1%
Non-food inflation, May-26
USD 1,639.7m
Exports of goods & services
USD 785.2m
Imports of goods & services
USD 41.5m
Clove export value, 2026
Companion Reading
What's Next for Tanzania's Economy? The Policy Gaps Keeping USD 1 Trillion Out of Reach by 2050
Zanzibar's tourism-and-agriculture-led growth model is a useful case study within TICGL's broader 2050 growth-gap analysis — see what it will take to scale this success nationally.
Zanzibar's headline inflation climbed to 5.5 percent in May 2026, up from 5.0 percent in April and 4.2 percent a year earlier — moving further from the very low readings seen in mid-2025. Food inflation eased slightly from April's 10.1 percent but, at 9.9 percent, remains the dominant driver, while non-food inflation has been trending up as fuel costs pass through into transport (5.1%) and restaurant & accommodation prices (7.4%).
Headline, food & non-food inflation
Percent, year-on-year — the three most recent readings
Inflation by CPI group — May 2026
Annual % change, all 13 basket groups
Zanzibar CPI by group (weight %, annual inflation %)
Group (weight %)
May-25
Apr-26
May-26
Food & non-alcoholic beverages (41.9)
4.5
9.9
9.7
Housing, water, electricity, gas (25.8)
4.7
-0.4
1.2
Transport (9.1)
2.2
2.7
5.1
Furnishings & household maintenance (4.8)
4.0
2.2
2.4
Information & communication (4.2)
2.2
0.0
0.1
Clothing & footwear (6.3)
5.1
1.5
1.6
Restaurants & accommodation (1.4)
0.6
6.8
7.4
Alcoholic beverages & tobacco (0.2)
-0.2
4.4
4.3
Personal care & social protection (1.7)
4.9
1.9
0.8
Education (1.6)
3.8
1.5
0.3
Recreation, sport & culture (1.1)
4.6
2.6
2.6
Health (1.3)
1.5
0.6
0.6
Insurance & financial services (0.5)
0.0
0.0
0.0
Headline (100.0)
4.2
5.0
5.5
Food (40.5)
3.9
10.1
9.9
Non-food (59.5)
4.4
1.1
2.1
Source: Office of the Chief Government Statistician, Zanzibar (Table 3.1.1). Base: July 2022 = 100.
Section 3.2
Government budgetary operations: revenue lags target, deficit widens
Zanzibar's government resource envelope reached TZS 133.3 billion in May 2026 — just 61.7 percent of the monthly target — with domestic revenue of TZS 129.5 billion (69.9% of target) and TZS 3.8 billion in grants. Tax revenue supplied 90.5 percent of domestic revenue, while non-tax collections of TZS 12.4 billion reached only 63 percent of target. Total expenditure of TZS 309 billion — 59.6 percent of it development spending — outpaced resources, producing an overall deficit of TZS 175.7 billion financed through domestic borrowing.
Government resources — May 2026
TZS billion, by revenue source
Government expenditure — May 2026
TZS billion, by spending category
Zanzibar government resources, May 2026 (TZS billion)
Source
2025 Actual
2026 Estimate
2026 Actual
% of target
Tax on imports
26.3
30.8
22.7
73.7%
VAT & excise duties (local)
39.7
64.6
46.6
72.1%
Income tax
21.0
32.7
33.1
101.2%
Other taxes
19.2
37.4
14.7
39.3%
Non-tax revenue
10.2
19.6
12.4
63.3%
Grants
2.5
—
3.8
—
Total resource envelope
—
216.0
133.3
61.7%
Source: Ministry of Finance and Planning, Zanzibar (Chart 3.2.1, Chart 3.2.2). Other taxes include hotel and restaurant levies, tour operator levy, revenue stamps, airport/seaport service charges, road development fund and petroleum levy.
Watch this: Income tax is the only major revenue line ahead of target (101.2%), while imports-linked taxes and other levies fell well short — a pattern consistent with softer trade volumes weighing on collections even as tourism-linked income taxes outperform.
Section 3.3
External sector: a widening surplus built on tourism and trade
Zanzibar's current account surplus grew 21.2 percent to USD 864.8 million in the year ending May 2026, from USD 713.6 million a year earlier. Services exports — dominated by tourism — accounted for 96 percent of total goods-and-services exports, while a clove-export boom pushed goods exports up sharply despite the isles' persistently negative goods-trade balance.
Current account, year ending May
USD million, 2025 vs 2026p
Imports of goods by category
USD million, year ending May — capital imports more than doubled
Zanzibar current account summary (USD million, year ending May)
Item
2025
2026p
% change
Exports of goods
33.4
67.2
+101.2%
Imports of goods (fob)
532.7
660.1
+23.9%
Goods account balance
-499.3
-592.9
+18.7%
Services receipts
1,299.4
1,572.5
+21.0%
Services account balance
1,198.7
1,447.5
+20.8%
Goods & services balance
699.3
854.6
+22.2%
Primary income balance
12.7
8.8
-31.2%
Secondary income balance
1.5
1.5
-3.2%
Current account balance
713.6
864.8
+21.2%
Source: Tanzania Revenue Authority, banks and Bank of Tanzania computations (Table 3.3.1). p = provisional data.
Section 3.3 · Deep Dive
The clove-export boom driving goods exports
Clove export value jumped from just USD 3.3 million in the year ending May 2025 to an estimated USD 41.5 million in the year ending May 2026 — more than twelvefold — as both volumes (up roughly ninefold, to 6.4 thousand tonnes) and unit prices (up 36.2%, to USD 6,515.5 per tonne) rose sharply. Cloves alone now account for 61.7 percent of Zanzibar's total goods exports, overtaking manufactured goods and seaweed as the isles' leading export earner.
Goods exports by category
USD '000, year ending May — 2025 vs 2026p
Clove exports: value, volume & price
Indexed view — year ending May 2025 = 100
Zanzibar exports of goods by category (USD '000, year ending May)
Category
2025
2026p
% change
Cloves (traditional)
3,314.5
41,508.4
+1,152%
Manufactured goods
15,200.6
10,886.2
-28.4%
Other non-traditional exports
10,043.8
12,463.1
+24.1%
Seaweeds
3,438.5
1,632.2
-52.5%
Fish & fish products
1,386.5
752.7
-45.7%
Total goods exports
33,383.9
67,242.7
+101.4%
Source: Tanzania Revenue Authority and Bank of Tanzania computations (Table 3.3.2). p = provisional data.
Diversification watch: While the clove boom is a welcome windfall, seaweed and fish-product exports both fell by more than 45 percent over the same period — a reminder that Zanzibar's non-clove export base still needs strengthening to avoid over-reliance on a single, price-volatile commodity.
TICGL Analysis
What this means for investors and policymakers
1. Tourism remains the anchor
With services making up 96% of Zanzibar's exports and tourist arrivals up 21% y/y, hospitality, transport and ancillary services remain the highest-conviction growth sectors for investors on the isles.
2. Clove windfall needs a strategy
A twelvefold jump in clove export value is a rare opportunity to build price-stabilisation and value-addition capacity (processing, branding) before the current price cycle normalises.
3. Revenue collection needs strengthening
At 61.7% of target, Zanzibar's resource envelope shortfall — especially in import-linked taxes and "other taxes" — points to room for improved compliance and administration to reduce reliance on domestic borrowing.
TICGL Economic
Related TICGL insights & tools
Continue exploring Tanzania's economy — mainland and Zanzibar — with TICGL's research library, live dashboards and researcher programme.
Kiwango cha mfumko wa bei Zanzibar kiliongezeka hadi asilimia 5.5 mwezi Mei 2026, kutoka asilimia 4.2 mwaka mmoja uliopita, kikichangiwa zaidi na kupanda kwa bei za vyakula (asilimia 9.9) na gharama za usafirishaji (asilimia 5.1) kufuatia mtikisiko wa bei za mafuta duniani.
Kwa upande wa bajeti, Serikali ya Mapinduzi Zanzibar ilikusanya rasilimali za jumla ya shilingi bilioni 133.3 mwezi Mei 2026, sawa na asilimia 61.7 tu ya lengo la mwezi huo. Matumizi ya Serikali yalifikia shilingi bilioni 309, ambapo asilimia 59.6 ilielekezwa kwenye miradi ya maendeleo, hali iliyosababisha nakisi ya shilingi bilioni 175.7 iliyogharamiwa kwa mikopo ya ndani.
Upande wa biashara ya nje ndio uliofanya vizuri zaidi — ziada ya urari wa biashara wa nje (current account) iliongezeka kwa asilimia 21.2 hadi dola za Marekani milioni 864.8 kwa mwaka unaoishia Mei 2026, ikichagizwa na ongezeko la watalii kwa asilimia 21 (kufikia watalii 947,169) na ongezeko kubwa la mauzo ya karafuu nje — kutoka dola milioni 3.3 hadi dola milioni 41.5, sawa na ongezeko la zaidi ya mara kumi na mbili.
Maana yake: Utalii unaendelea kuwa nguzo kuu ya uchumi wa Zanzibar, na ongezeko la mauzo ya karafuu ni fursa kubwa ya kuongeza thamani ya mazao hayo. Hata hivyo, TICGL/TERI inashauri Serikali kuimarisha ukusanyaji wa mapato ya ndani ili kupunguza utegemezi wa mikopo katika kugharamia bajeti.
Tanzania External Sector Performance 2026: Current Account, Services Exports & Imports | TICGL
TICGL Economic · External Sector Monitor
Tanzania External Sector Performance: Current Account, Services Exports & Imports
A focused analysis of Tanzania's external sector for the year ending May 2026: the current account balance, services export receipts by category (travel, transport, other services), and services import payments — drawn from the Bank of Tanzania's June 2026 Monthly Economic Review.
📅 Period: Year ending May 2026 (with May 2026 monthly detail)🏢 Source: Tanzania Revenue Authority, Banks & Bank of Tanzania📋 Analysis by TICGL Economic Research
-USD 2,209.5m
Current Account Balance
Year ending May 2026
USD 8,051.5m
Services Receipts
+14.2% year on year
USD 3,370.1m
Services Payments
+8.3% year on year
+USD 4,681.4m
Net Services Surplus
Receipts minus payments
USD 5,538.8m
Gross FX Reserves
4.3 months import cover
Executive Summary
Tanzania's External Sector: The Year Ending May 2026 at a Glance
Tanzania's current account deficit widened to USD 2,209.5 million in the year ending May 2026, from USD 2,090.9 million a year earlier — a 5.7 percent increase — as elevated global freight and commodity prices, linked to the Middle East conflict, pushed import costs up faster than export earnings. The goods account deficit widened 18.8 percent to USD 5,410.6 million, even as goods exports grew a healthy 20.4 percent on the back of record gold receipts.
The bright spot was services trade: Tanzania is a consistent net exporter of services, and that surplus grew further in the year to May 2026. Services receipts rose 14.2 percent to USD 8,051.5 million, led by travel/tourism (USD 4,419.1 million, +9.5%) and transport services (USD 3,146.3 million, +16.0%), the latter reflecting Tanzania's growing role as a regional freight and logistics corridor. Services payments rose a more modest 8.3 percent to USD 3,370.1 million, driven mainly by higher freight payments (+17.9%) tied to the same global shipping cost pressures. The result: a net services surplus of USD 4,681.4 million, which continues to be one of the most important offsets to Tanzania's persistent goods trade deficit.
On the financing side, gross official foreign exchange reserves rose to USD 5,538.8 million, up from USD 5,136.7 million a year earlier, covering 4.3 months of projected imports — supported by strong export receipts (especially gold) and the Bank of Tanzania's continued gold purchase programme.
Must-Read TICGL Analysis
What's Next for Tanzania's Economy? The Policy Gaps Keeping TZS 1 Trillion Out of Reach by 2050
A resilient services sector — tourism and transport in particular — is one of Tanzania's clearest external competitive advantages. TICGL's flagship analysis examines the structural policy gaps that could determine whether this advantage translates into the country's Vision 2050 (Dira 2050) ambitions.
Tanzania's current account records all transactions in goods, services, primary income (investment income, compensation of employees) and secondary income (transfers) between residents and the rest of the world. In the year ending May 2026, the current account balance was a deficit of USD 2,209.5 million, 5.7 percent wider than the USD 2,090.9 million deficit recorded a year earlier.
-USD 2,209.5m
Current Account Balance (Year to May-26)
▼ widened 5.7% y/y
-USD 5,410.6m
Goods Account Balance
▼ deficit widened 18.8% y/y
+USD 4,681.4m
Services Account Balance
▲ surplus widened 18.8% y/y
Chart 1 — Current Account Components, Year Ending May (Millions of USD)
Source: Tanzania Revenue Authority, banks, and Bank of Tanzania calculations. p = provisional
Chart 2 — Current Account Balance: Monthly Snapshot (Millions of USD)
Source: Bank of Tanzania. Monthly figures are more volatile than the annual trend and should be read alongside the year-ending-May comparison above.
Table 1 — Current Account, Year Ending May (Millions of USD)
Item
2024
2025
2026p
% Change
Goods account (net)
-6,058.3
-4,555.6
-5,410.6
18.8
Exports (goods)
7,758.7
9,654.7
11,627.9
20.4
Imports (goods)
13,817.0
14,210.2
17,038.5
19.9
Services account (net)
4,174.6
3,939.6
4,681.4
18.8
Services receipts
6,499.4
7,051.5
8,051.5
14.2
Services payments
2,324.9
3,111.9
3,370.1
8.3
Balance on goods and services
-1,883.7
-615.9
-729.2
18.4
Primary income account (net)
-1,674.0
-2,001.5
-1,830.7
-8.5
Secondary income account (net)
649.7
526.5
350.4
-33.4
Current account balance
-2,907.9
-2,090.9
-2,209.5
5.7
The widening in the goods deficit was driven by import growth (19.9%) modestly outpacing export growth (20.4%) in absolute dollar terms — imports added USD 2,828.3 million over the year while exports added USD 1,973.2 million. Encouragingly, the primary income deficit narrowed 8.5 percent to USD 1,830.7 million, mainly reflecting lower interest payments to non-residents, partially offsetting the wider goods deficit. The secondary income surplus (largely remittances/personal transfers) fell 33.4 percent to USD 350.4 million.
Services receipts — Tanzania's earnings from selling services to non-residents — rose 14.2 percent to USD 8,051.5 million in the year ending May 2026, from USD 7,051.5 million a year earlier. Growth was led by travel and transport, Tanzania's two largest services export categories.
USD 4,419.1m
Travel (Tourism) Receipts
▲ +9.5% y/y
USD 3,146.3m
Transport Receipts
▲ +16.0% y/y
USD 486.1m
Other Services Receipts
▼ -2.3% y/y
Chart 3 — Services Receipts by Category, Year Ending May (Millions of USD)
Source: Banks and Bank of Tanzania computations. Other services include construction, insurance, financial, telecommunication, computer and information, charges for intellectual property, government, personal and other business services.
Chart 4 — Composition of Services Receipts, Year Ending May 2026p
Source: TICGL computations based on Bank of Tanzania data
Table 2 — Services Receipts by Category, Year Ending May (Millions of USD)
Category
2024
2025
2026p
% Change (2025→2026p)
Share of Receipts, 2026p
Travel (Tourism)
3,627.1
4,034.4
4,419.1
+9.5%
54.9%
Transport
2,284.5
2,519.5
3,146.3
+16.0%
39.1%
Other services
587.8
497.7
486.1
-2.3%
6.0%
Total services receipts
6,499.4
7,051.5
8,051.5
+14.2%
100.0%
Travel receipts grew broadly in line with visitor numbers: international tourist arrivals rose 5.9 percent to 2,298,900 in the year ending May 2026, with average spending per visitor also edging higher. Transport receipts — largely freight earnings from goods in transit through Tanzanian ports and corridors to neighbouring landlocked countries — grew faster still at 16.0 percent, underscoring Tanzania's expanding role as a regional trade and logistics hub even as global shipping costs rose. On a monthly basis, total services receipts were broadly flat at USD 647.5 million in May 2026 compared with the same month a year earlier.
Services payments — what Tanzania pays non-residents for services — rose 8.3 percent to USD 3,370.1 million in the year ending May 2026, from USD 3,111.9 million a year earlier. Unlike receipts, payments are dominated by transport (freight) costs rather than travel.
USD 1,691.8m
Transport Payments
▲ +16.8% y/y
USD 976.9m
Other Services Payments
▼ -2.7% y/y
USD 701.3m
Travel Payments
▲ +6.4% y/y
Chart 5 — Services Payments by Category, Year Ending May (Millions of USD)
Source: Banks and Bank of Tanzania computations. Other services include construction, insurance, financial, telecommunication, computer and information, government, personal and other business services.
Chart 6 — Composition of Services Payments, Year Ending May 2026p
Source: TICGL computations based on Bank of Tanzania data
Table 3 — Services Payments by Category, Year Ending May (Millions of USD)
Category
2024
2025
2026p
% Change (2025→2026p)
Share of Payments, 2026p
Transport
1,265.3
1,449.1
1,691.8
+16.8%
50.2%
Other services
679.8
1,003.9
976.9
-2.7%
29.0%
Travel
379.7
658.9
701.3
+6.4%
20.8%
Total services payments
2,324.9
3,111.9
3,370.1
+8.3%
100.0%
The rise in transport payments (freight costs) of 16.8 percent was consistent with — and largely explained by — the elevated goods import bill and higher global shipping costs arising from disruption to Gulf shipping routes and the Strait of Hormuz. On a monthly basis, services payments amounted to USD 278.8 million in May 2026, up from USD 267.0 million in May 2025, again largely reflecting higher freight payments.
Comparing receipts and payments category by category shows exactly where Tanzania's services trade surplus comes from — and where it is most exposed to rising global costs.
Chart 7 — Net Services Balance by Category, Year Ending May 2026p (Millions of USD)
Source: TICGL computations (Services receipts minus services payments), based on Bank of Tanzania data.
Table 4 — Net Services Balance by Category, Year Ending May 2026p (Millions of USD)
Category
Receipts
Payments
Net Balance
Travel (Tourism)
4,419.1
701.3
+3,717.8
Transport
3,146.3
1,691.8
+1,454.5
Other services
486.1
976.9
-490.8
Total services account
8,051.5
3,370.1
+4,681.4
Key insight: Travel (tourism) is by far Tanzania's most profitable services category, generating a net surplus of USD 3,717.8 million — more than 6 times receipts from transport net of its costs. "Other services" (construction, insurance, financial, telecom, IT and business services) is the only category running a net deficit, at -USD 490.8 million, indicating Tanzania remains a net importer of these professional and technical services.
5. Foreign Exchange Reserves: The Financing Context
Despite the wider current account deficit, Tanzania's external buffers strengthened. Gross official foreign exchange reserves rose to USD 5,538.8 million at end-May 2026, from USD 5,136.7 million a year earlier, sufficient to cover 4.3 months of projected imports of goods and services — above the national adequacy threshold. This buildup was underpinned by strong export receipts, particularly gold, and the Bank of Tanzania's continued gold purchase programme, which helped cushion the impact of the wider current account deficit on reserve accumulation.
Katika mwaka unaoishia Mei 2026, nakisi ya urari wa malipo ya kawaida (current account) ya Tanzania iliongezeka hadi Dola za Marekani milioni 2,209.5, kutoka Dola milioni 2,090.9 mwaka uliopita, kutokana na gharama kubwa za uagizaji bidhaa nje ikilinganishwa na kasi ya ukuaji wa mauzo nje.
Hata hivyo, sekta ya huduma iliendelea kuwa nguvu kubwa ya uchumi wa nje: mapato ya huduma (services receipts) yaliongezeka kwa asilimia 14.2 hadi Dola milioni 8,051.5, yakiongozwa na utalii (Dola milioni 4,419.1, ongezeko la asilimia 9.5) na usafirishaji (Dola milioni 3,146.3, ongezeko la asilimia 16.0). Idadi ya watalii wa kimataifa iliongezeka kwa asilimia 5.9 hadi watalii 2,298,900.
Kwa upande wa malipo ya huduma (services payments), Tanzania ilitumia Dola milioni 3,370.1, ongezeko la asilimia 8.3, likichangiwa zaidi na ongezeko la gharama za usafirishaji wa mizigo (freight) kwa asilimia 16.8, kutokana na changamoto za usafirishaji duniani. Kwa ujumla, Tanzania inaendelea kuwa na ziada kubwa katika biashara ya huduma — ziada ya wavu (net surplus) ya Dola milioni 4,681.4 — huku utalii ukiwa chanzo kikuu cha faida hii, na huduma nyingine (kama ujenzi, bima, fedha na TEHAMA) pekee ndizo zenye nakisi.
Akiba ya fedha za kigeni iliongezeka hadi Dola milioni 5,538.8, ikitosha kugharamia uagizaji wa bidhaa na huduma kwa miezi 4.3, ikisaidiwa na mauzo makubwa ya dhahabu nje ya nchi.
Kwa uchambuzi zaidi wa kina kuhusu fursa na changamoto za kisera zinazoathiri ushindani wa nje wa Tanzania, soma makala kamili ya TICGL: What's Next for Tanzania's Economy?
Primary source: Bank of Tanzania, Monthly Economic Review, June 2026 (Section 2.7 — External Sector Performance; Table 2.7.1 Current Account; Table 2.7.3 Services Receipts by Category; Chart 2.7.5 Service Payments), ISSN 0856-6844, www.bot.go.tz, compiled with data from the Tanzania Revenue Authority and commercial banks. Analysis and commentary by TICGL Economic Research. All 2026 figures are provisional (p) and subject to revision. This page covers the current account, services export receipts and services import payments only; goods trade detail, external debt and reserves management are addressed in separate TICGL analyses.
Tanzania Central Government Revenue & Expenditure — April 2026 Budget Analysis | TICGL
TICGL Economic · Public Finance Monitor
Tanzania Central Government Revenue & Expenditure — April 2026
A focused analysis of Tanzania's central government budgetary operations for April 2026: revenue collected by source, expenditure by category, and how actual performance compares against budget targets — drawn from the Bank of Tanzania's June 2026 Monthly Economic Review (cheques-issued basis, Tanzania Mainland).
📅 Reporting month: April 2026🏢 Source: Ministry of Finance & Bank of Tanzania📋 Analysis by TICGL Economic Research
TZS 3,112.0bn
Central Govt Revenue
107.2% of April target
TZS 3,457.2bn
Total Expenditure
83.5% of April target
TZS 2,690.6bn
Tax Revenue
110.2% of target
TZS 760.6bn
Development Expenditure
only 52.5% of target
TZS -214.9bn
Balance Before Grants
vs -1,111.0bn estimated
Executive Summary
Central Government Budgetary Operations: April 2026 at a Glance
Tanzania's central government outperformed its revenue target in April 2026, collecting TZS 3,111.97 billion against a monthly target of TZS 2,902.66 billion — 7.2 percent (TZS 209.3 billion) above target. The overperformance was driven almost entirely by tax revenue, which came in at TZS 2,690.63 billion, 10.2 percent above target, powered by taxes on imports (117.3% of target) and income tax (114.5% of target). Non-tax revenue was the one soft spot, collecting TZS 421.34 billion against a TZS 461.43 billion target — 8.7 percent short.
On the spending side, total central government expenditure of TZS 3,457.22 billion was 16.5 percent below the TZS 4,139.26 billion estimate for the month. Recurrent expenditure (wages, interest, and other recurrent costs) was executed close to plan at TZS 2,696.64 billion, but development expenditure was severely under-executed — only TZS 760.58 billion of a planned TZS 1,448.48 billion was spent (52.5% execution), largely because foreign-financed development projects disbursed just TZS 137.69 billion of a TZS 607.49 billion estimate. The combination of strong revenue collection and restrained (particularly development) spending narrowed the fiscal balance before grants to a deficit of TZS 214.93 billion in April, well inside the TZS 1,110.96 billion deficit that had been projected.
Must-Read TICGL Analysis
What's Next for Tanzania's Economy? The Policy Gaps Keeping TZS 1 Trillion Out of Reach by 2050
Strong tax revenue collection is only half the fiscal story — persistent under-execution of development expenditure, especially foreign-financed projects, is one of the structural issues TICGL examines in its flagship analysis of the policy gaps standing between Tanzania and its Vision 2050 (Dira 2050) ambitions.
Central government revenue reached TZS 3,111.97 billion in April 2026, equivalent to 96.0 percent of total government revenue (which also includes Local Government Authority own-source collections of TZS 130.32 billion) and 7.2 percent above the monthly target. Tax revenue continued to perform strongly, reflecting ongoing improvements in tax administration and compliance.
TZS 3,112.0bn
Central Govt Revenue
▲ 7.2% above target
TZS 2,690.6bn
Tax Revenue
▲ 10.2% above target
TZS 421.3bn
Non-Tax Revenue
▼ 8.7% below target
Chart 1 — Central Government Revenue by Source, April 2026 (Billions of TZS)
Source: Ministry of Finance and Bank of Tanzania computations (Table A2, cheques issued). 2026 actual figures are provisional.
Table 1 — Central Government Revenue by Source, April 2026 (Billions of TZS)
Revenue Source
April 2026 Estimate
April 2026 Actual
Variance
% of Target
Taxes on imports
904.55
1,060.67
+156.12
117.3%
Sales/VAT and excise on local goods
612.06
585.43
-26.63
95.6%
Income taxes
741.58
849.32
+107.74
114.5%
Other taxes
183.03
195.21
+12.18
106.7%
Tax revenue subtotal
2,441.23
2,690.63
+249.40
110.2%
Non-tax revenue
461.43
421.34
-40.09
91.3%
Central government revenue
2,902.66
3,111.97
+209.31
107.2%
LGA own sources
125.65
130.32
+4.67
103.7%
Total revenue (incl. LGAs)
3,028.30
3,242.29
+213.99
107.1%
Key insight: Taxes on imports (TZS 1,060.67bn) was the single largest revenue line in April 2026, overtaking income tax (TZS 849.32bn) — together these two lines contributed nearly 62 percent of central government revenue. VAT/excise on local goods was the only tax category to miss its target.
2. Central Government Revenue — Cumulative FY2025/26 (July 2025–April 2026)
Looking at the ten months to April 2026, central government revenue totalled TZS 33,294.80 billion (actual), ahead of the cumulative estimate of TZS 31,402.19 billion, and tracking toward the full-year budget of TZS 36,857.73 billion.
Chart 2 — Central Government Revenue: Full-Year Budget vs. Cumulative Performance (Billions of TZS)
Source: Ministry of Finance and Bank of Tanzania computations. Cumulative = July 2025–April 2026.
Table 2 — Revenue: Annual Budget vs. Cumulative Outturn, July 2025–April 2026 (Billions of TZS)
Revenue Item
2025/26 Full-Year Budget
Cumulative Estimate
Cumulative Actual
% of Cumulative Target
Taxes on imports
11,562.97
9,603.07
10,271.66
107.0%
Sales/VAT and excise on local goods
7,016.47
5,592.61
5,395.25
96.5%
Income taxes
11,367.88
9,113.54
11,163.31
122.5%
Other taxes
4,887.70
1,931.79
1,897.97
98.3%
Tax revenue
32,176.00
26,241.01
28,728.19
109.5%
Non-tax revenue
4,681.73
5,161.18
4,566.61
88.5%
Central government revenue
36,857.73
31,402.19
33,294.80
106.0%
LGA own sources
1,680.51
1,402.34
1,353.57
96.5%
Total revenue (incl. LGAs)
40,466.13
32,804.53
34,648.37
105.6%
Income tax has been the standout cumulative performer, running 22.5 percent above the ten-month target and already exceeding 98 percent of the full-year budget with two months of the fiscal year remaining — a sign that either economic activity or compliance is significantly outperforming the assumptions used to set the 2025/26 budget. Non-tax revenue and "other taxes" are the two areas trailing target on a cumulative basis.
Total central government expenditure (cheques issued) was TZS 3,457.22 billion in April 2026, against an estimate of TZS 4,139.26 billion — 83.5 percent budget execution. Recurrent expenditure was executed almost exactly to plan, while development expenditure fell well short.
TZS 3,457.2bn
Total Expenditure
▼ 83.5% of target
TZS 2,696.6bn
Recurrent Expenditure
▲ 100.2% of target
TZS 760.6bn
Development Expenditure
▼ only 52.5% of target
Chart 3 — Central Government Expenditure by Category, April 2026 (Billions of TZS)
Source: Ministry of Finance and Bank of Tanzania computations. 2026 actual figures are provisional.
Table 3 — Central Government Expenditure, April 2026 (Billions of TZS)
Expenditure Category
April 2026 Estimate
April 2026 Actual
Variance
% of Target
Wages and salaries
1,100.16
1,134.39
+34.23
103.1%
Interest payments — domestic
311.98
304.24
-7.74
97.5%
Interest payments — foreign
301.80
226.05
-75.75
74.9%
Interest payments subtotal
613.79
530.29
-83.49
86.4%
Other goods, services and transfers
976.84
1,031.96
+55.12
105.6%
Recurrent expenditure
2,690.78
2,696.64
+5.86
100.2%
Development expenditure — local
840.98
622.89
-218.10
74.1%
Development expenditure — foreign
607.49
137.69
-469.80
22.7%
Development expenditure & net lending
1,448.48
760.58
-687.90
52.5%
Total expenditure
4,139.26
3,457.22
-682.04
83.5%
Key insight: Foreign-financed development spending was the weakest link, executing at just 22.7 percent of its April target — a shortfall of TZS 469.8 billion in a single month. Recurrent spending, by contrast, was fully executed, with wages and other recurrent transfers slightly overshooting plan.
4. Central Government Expenditure — Cumulative FY2025/26 (July 2025–April 2026)
Cumulative expenditure for the ten months to April 2026 stood at TZS 38,792.07 billion, against a ten-month estimate of TZS 40,402.96 billion (96.0% execution) and a full-year budget of TZS 48,774.99 billion.
Chart 4 — Expenditure: Full-Year Budget vs. Cumulative Performance (Billions of TZS)
Source: Ministry of Finance and Bank of Tanzania computations. Cumulative = July 2025–April 2026.
Table 4 — Expenditure: Annual Budget vs. Cumulative Outturn, July 2025–April 2026 (Billions of TZS)
Expenditure Item
2025/26 Full-Year Budget
Cumulative Estimate
Cumulative Actual
% of Cumulative Target
Wages and salaries
10,917.47
10,890.00
10,976.94
100.8%
Interest payments (domestic + foreign)
6,493.72
5,600.39
4,679.59
83.6%
Other goods, services and transfers
7,088.61
9,103.63
9,968.60
109.5%
Recurrent expenditure
31,281.26
25,594.01
25,625.13
100.1%
Development expenditure — local
12,117.83
10,066.44
10,193.05
101.3%
Development expenditure — foreign
5,375.90
4,742.51
2,973.90
62.7%
Development expenditure & net lending
17,493.73
14,808.95
13,166.94
88.9%
Total expenditure
48,774.99
40,402.96
38,792.07
96.0%
On a cumulative basis, the shortfall is concentrated in foreign-financed development expenditure, running at just 62.7 percent of its ten-month target — a persistent pattern rather than a one-month event, pointing to structural disbursement delays from external development partners rather than a single-month anomaly. Locally-financed development spending and recurrent expenditure have both tracked at or slightly above plan.
Because revenue outperformed target while expenditure — particularly development spending — under-executed, the fiscal balance before grants improved markedly relative to plan in April 2026: a deficit of TZS 214.93 billion actual, against an estimated deficit of TZS 1,110.96 billion. The same pattern holds cumulatively for the ten months to April 2026.
Chart 5 — Central Government Revenue vs. Expenditure, April 2026 & Cumulative FY2025/26 (Billions of TZS)
Source: TICGL computations based on Ministry of Finance and Bank of Tanzania data (Table A2).
Table 5 — Fiscal Balance Before Grants (Billions of TZS)
Period
Total Revenue (incl. LGAs)
Total Expenditure
Balance Before Grants
April 2026 — Estimate
3,028.30
4,139.26
-1,110.96
April 2026 — Actual
3,242.29
3,457.22
-214.93
Cumulative Jul-25–Apr-26 — Estimate
32,804.53
40,402.96
-7,598.43
Cumulative Jul-25–Apr-26 — Actual
34,648.37
38,792.07
-4,143.71
Full-Year 2025/26 Budget
40,466.13
48,774.99
-8,308.86
The cumulative fiscal balance before grants (-TZS 4,143.71 billion) is currently running at roughly half the size of the estimated ten-month deficit (-TZS 7,598.43 billion) — a combination of stronger-than-budgeted revenue collection and slower-than-planned execution of foreign-financed development projects. This figure excludes grants and cash/other adjustments, which further affect the final overall balance and its financing.
6. Budget Execution Scorecard — April 2026 (% of Monthly Target Achieved)
The chart below ranks each major revenue and expenditure line by how close actual April 2026 performance came to its monthly target (100% = on target).
Chart 6 — Budget Execution Rate by Line Item, April 2026 (% of Target)
Source: TICGL computations based on Ministry of Finance and Bank of Tanzania data. Bars above 100% indicate over-performance (green for revenue, amber caution for expenditure over-runs); bars below 100% indicate under-performance.
Chart 7 — Composition of Central Government Expenditure, April 2026 Actual
Source: TICGL computations based on Table A2 (Ministry of Finance / Bank of Tanzania)
Mwezi Aprili 2026, Serikali Kuu ya Tanzania ilikusanya mapato ya Shilingi bilioni 3,111.97, sawa na asilimia 107.2 ya lengo la mwezi lililokuwa Shilingi bilioni 2,902.66. Ukusanyaji huu mzuri ulichangiwa zaidi na kodi za uagizaji bidhaa nje ya nchi (asilimia 117.3 ya lengo) na kodi ya mapato (asilimia 114.5 ya lengo), huku mapato yasiyo ya kikodi pekee yakishindwa kufikia lengo (asilimia 91.3 tu).
Kwa upande wa matumizi, Serikali ilitumia jumla ya Shilingi bilioni 3,457.22, sawa na asilimia 83.5 tu ya lengo la Shilingi bilioni 4,139.26. Matumizi ya kawaida (mishahara, riba na uendeshaji) yalitekelezwa karibu kikamilifu (asilimia 100.2), lakini matumizi ya maendeleo yalisuasua sana, yakifikia asilimia 52.5 tu ya lengo — hasa kutokana na miradi ya maendeleo inayofadhiliwa na wahisani wa nje kutolewa kwa kiwango cha asilimia 22.7 pekee ya lengo la mwezi huo.
Kwa mtazamo wa miezi kumi (Julai 2025 hadi Aprili 2026), mapato ya Serikali Kuu yalifikia Shilingi bilioni 33,294.80, yakizidi lengo la kipindi hicho, huku matumizi yakiwa Shilingi bilioni 38,792.07, chini kidogo ya lengo. Hali hii ilipunguza pengo la nakisi ya bajeti (kabla ya misaada) hadi Shilingi bilioni 4,143.71, ikilinganishwa na nakisi iliyokadiriwa ya Shilingi bilioni 7,598.43.
Kwa uchambuzi zaidi wa kina kuhusu changamoto za kisera zinazoathiri utekelezaji wa miradi ya maendeleo na malengo ya Dira 2050, soma makala kamili ya TICGL: What's Next for Tanzania's Economy?
Primary source: Bank of Tanzania, Monthly Economic Review, June 2026 (Table A2 — Central Government Operations, Cheques Issued, Tanzania Mainland), ISSN 0856-6844, www.bot.go.tz, using Ministry of Finance data. Analysis and commentary by TICGL Economic Research. All April 2026 and cumulative FY2025/26 actual figures are provisional and subject to revision. This page covers central government revenue and expenditure only; financing (foreign and domestic borrowing), grants, debt, inflation, monetary policy and external sector data are addressed in separate TICGL analyses.
Tanzania Financial Markets Review June 2026: Government Securities & Interbank Cash Market Analysis | TICGL
TICGL Economic • Financial Markets Watch
Tanzania Financial Markets Review — June 2026
A TICGL deep-dive into Tanzania's financial markets, based on the Bank of Tanzania Monthly Economic Review (June 2026 issue) — with primary focus on the Government securities market (Treasury bills & bonds) and the interbank cash market, alongside the inflation and monetary policy backdrop that shapes them for May 2026.
📅 Published: 11 July 2026🏛️ Source: Bank of Tanzania Monthly Economic Review, June 2026✍️ By TICGL Research Desk
Executive Summary
Tanzania's financial markets in May 2026 reflected ample banking-system liquidity and a Bank of Tanzania holding steady on policy amid a difficult external backdrop shaped by the Middle East conflict and elevated oil prices. Headline inflation edged up to 4.2 percent, staying comfortably inside the national, EAC and SADC convergence bands, while the Bank held its Central Bank Rate at 5.75 percent for a third consecutive quarter. The Government securities market saw short-term paper heavily oversubscribed even as yields continued to ease, while the interbank cash market saw lower turnover and softer rates — both consistent with comfortable bank liquidity positions.
Headline Inflation (May 2026)
4.2%
▲ from 4.0% in Apr-26
Central Bank Rate
5.75%
Held for Q4 2025/26
7-Day IBCM Rate (avg)
5.92%
Within ±150bps corridor
Overall T-Bills Yield
4.74%
▼ from 5.06% in Apr-26
Overall IBCM Rate
6.14%
▼ from 6.26% in Apr-26
M3 Money Supply Growth
25.2%
▲ from 22.0% in Apr-26
Private Sector Credit Growth
23.2%
vs 23.6% in Apr-26
TZS/USD Exchange Rate (avg)
2,616.88
+3.02% y/y appreciation
Government securities market: Two Treasury bills auctions (combined tender TZS 498.1bn) attracted bids of TZS 1,330.3bn — over 2.6x oversubscribed — while 15- and 20-year Treasury bonds drew TZS 324.9bn in bids against a TZS 401.8bn tender, pointing to soft demand at the long end even as short-term yields fell.
Interbank cash market (IBCM): Total transactions eased to TZS 1,732.7bn from TZS 2,567.8bn in April, with 7-day tenor transactions dominating at 63.8% of volume; the overall IBCM rate slipped to 6.14% from 6.26%, tracking comfortably within the Bank's policy corridor.
Monetary policy transmission: The narrowed ±150bps CBR corridor is working as intended — the 7-day IBCM rate averaged 5.92% in May, staying tightly anchored around the 5.75% policy rate.
Exchange rate: The shilling depreciated marginally month-on-month to an average of TZS 2,616.88/USD in May 2026, but strengthened by 3.02% on an annual basis — a reversal from the 3.82% depreciation recorded a year earlier.
Must-Read TICGL Analysis
What's Next for Tanzania's Economy? The Policy Gaps Keeping $1 Trillion Out of Reach by 2050
Before diving into the market data below, read TICGL's flagship analysis on the structural and policy gaps standing between Tanzania and its Vision 2050 ambitions — essential context for interpreting this month's monetary, fiscal and market developments.
Headline inflation rose to 4.2 percent in May 2026, from 4.0 percent in April 2026 and 3.2 percent a year earlier, remaining within the national target band and the SADC/EAC convergence benchmarks. The increase was driven mainly by the pass-through of elevated global fuel prices to transport costs — transport inflation jumped to 11.9 percent in May from 9.2 percent in April. Core inflation (excluding unprocessed food and energy) rose to 3.4 percent, remaining the principal contributor to headline inflation at 2.6 percentage points. Food inflation eased marginally to 5.6 percent as staple crop prices stabilised, while energy, fuel and utilities inflation moderated to 5.0 percent even though retail pump prices stayed elevated on Gulf-conflict disruption to global oil markets.
Chart 1: Tanzania Inflation Trend — Headline, Food, Energy & Core (Jan 2025 – May 2026)
Source: National Bureau of Statistics; Bank of Tanzania computations.
Table 1: Inflation Development — Selected Groups (Annual % Change)
Main Group
Weight (%)
May-25
Apr-26
May-26
All items (headline inflation)
100.0
3.2
4.0
4.2
Food and non-alcoholic beverages
28.2
5.6
5.7
5.6
Core inflation
73.9
2.1
3.1
3.4
Non-core inflation
26.1
5.6
6.3
6.3
Energy, fuel and utilities
5.7
6.1
5.3
5.0
Transport
14.1
1.7
9.2
11.9
Housing, water, electricity, gas & other fuels
15.1
3.4
1.7
0.7
Services
37.2
1.0
4.0
4.7
Goods
62.8
4.2
4.0
4.0
Source: National Bureau of Statistics and Bank of Tanzania computations (Table 2.1.1, BOT MER June 2026).
TICGL take: With headline inflation still well inside target and adequate domestic food supply plus fuel subsidies (introduced April–May 2026) cushioning cost pressures, the Bank of Tanzania retains room to keep policy accommodative. The key watch-item is transport/energy pass-through if the Strait of Hormuz disruption persists.
2. Monetary Policy Stance
At its April 2026 meeting, the Monetary Policy Committee (MPC) maintained the Central Bank Rate (CBR) at 5.75 percent for the quarter ending June 2026, balancing inflation and growth risks amid heightened Middle East geopolitical tensions. The CBR corridor was narrowed to ±150 basis points (from ±200bps) to sharpen policy transmission. The 7-day interbank cash market rate averaged 5.92 percent in May — comfortably inside the corridor — confirming effective transmission of the policy signal. The Bank continued to inject liquidity mainly via reverse repo operations, with sales rising to TZS 399.5 billion in May from TZS 379.7 billion in April, underscoring an accommodative posture in support of credit growth.
Chart 3: Brent Crude Oil Price — Monthly Average (USD/barrel)
Source: World Bank Commodity Markets; U.S. EIA (Table A8).
3. Financial Markets Deep Dive: Government Securities & Interbank Cash Market
This section is TICGL's primary focus for the June 2026 review cycle: a detailed look at the two markets that most directly signal domestic liquidity conditions and the cost of government borrowing — the Government securities market (Treasury bills and bonds) and the Interbank cash market (IBCM).
3.1 Government Securities Market
In May 2026, the Government securities market performed satisfactorily. Short-term securities registered high oversubscription, more than offsetting undersubscription at the longer end of the yield curve, in line with adequate liquidity in the banking system.
Table 2: May 2026 Auction Results Summary
Instrument
Tender Size (TZS bn)
Bids Received (TZS bn)
Successful (TZS bn)
Subscription Rate
Weighted Avg. Yield
Treasury Bills (combined, 2 auctions)
498.1
1,330.3
499.8
267%
4.74% (from 5.06% in Apr-26)
Treasury Bonds — 15-year
165.5
324.9 (combined)
235.1 (combined)
81% (combined)
10.39%
Treasury Bonds — 20-year
236.3
—
—
—
10.43%
Source: Bank of Tanzania (Section 2.4, BOT MER June 2026). The 15- and 20-year bond tenders were combined at TZS 401.8bn against TZS 324.9bn in bids and TZS 235.1bn allotted.
Chart 4: Treasury Bills Yields by Tenor (Weighted Average Yield, %) — Mar 2025 to May 2026
Source: Bank of Tanzania (Table A4: Interest Rates Structure).
Chart 5: Treasury Bonds Yield to Maturity by Tenor (%) — Mar 2025 to May 2026
Source: Bank of Tanzania (Table A4: Interest Rates Structure).
Chart 6: Tanzania Government Securities Yield Curve — Snapshot, May 2026
Source: Bank of Tanzania (Table A4: Interest Rates Structure, BOT MER June 2026).
TICGL take: The short end of the curve has fallen sharply — the overall T-bills rate has more than halved from 8.89% in May 2025 to 4.74% in May 2026 — reflecting ample liquidity and strong appetite for short-dated paper. The long end has also compressed materially (25-year bonds from 15.29% to 11.99%), but oversubscription at the short end versus undersubscription at longer tenors signals investors still prefer to stay short given global uncertainty. This is a favourable window for government to term out short-dated domestic debt, and for private issuers benchmarking against the sovereign curve.
3.2 Interbank Cash Market (IBCM)
The Interbank Cash Market continued to facilitate liquidity distribution among banks, with total market transactions of TZS 1,732.7 billion in May 2026, down from TZS 2,567.8 billion in April. Transactions with a 7-day maturity continued to dominate, accounting for 63.8 percent of total volume. The overall IBCM rate eased slightly to 6.14 percent from 6.26 percent in April 2026, tracking within the Bank's ±150bps CBR corridor and confirming smooth policy transmission.
Chart 7: Interbank Cash Market Rates — Overnight, 2–7 Day & Overall (%) — Mar 2025 to May 2026
Source: Bank of Tanzania (Table A4: Interest Rates Structure).
Chart 8: IBCM Total Transactions vs. Reverse Repo Sold (TZS bn) — Apr vs May 2026
Source: Bank of Tanzania (Section 2.2 & 2.4).
Chart 9: IBCM Volume Share by Maturity — May 2026
Source: Bank of Tanzania (Chart 2.4.2).
Table 4: Interbank Cash Market Rates by Maturity (%)
Maturity
Mar-26
Apr-26
May-26
Overnight
6.17
6.15
5.94
2 to 7 days
6.25
6.18
5.96
8 to 14 days
6.53
6.33
6.48
15 to 30 days
6.85
6.79
6.58
31 to 60 days
7.20
6.92
6.79
61 to 90 days
8.50
7.12
6.79
91 to 180 days
8.07
8.77
7.27
Overall IBCM rate
6.32
6.26
6.14
Source: Bank of Tanzania (Table A4). REPO rate held at 5.75%; Reverse REPO rate at 5.75%; Lombard rate at 7.75% throughout the period.
Table 5: Reverse Repo Operations (TZS billion)
Period
Reverse Repo Sold
April 2026
379.7
May 2026
399.5
Source: Bank of Tanzania (Section 2.2, Chart 2.2.2).
TICGL take: Lower IBCM turnover alongside a slightly lower overall rate suggests banks entered May 2026 with more comfortable liquidity buffers, reducing the need for interbank borrowing even as the Bank kept injecting liquidity through reverse repos. The dominance of 7-day tenor transactions (63.8% of volume) is consistent with banks managing statutory reserve requirements around the CBR corridor rather than taking directional liquidity positions.
3.3 Interbank Foreign Exchange Market (IFEM)
Liquidity conditions in the IFEM remained adequate in May 2026, supported by seasonal currency inflows, particularly from gold exports. Total market turnover rose to USD 119.3 million from USD 64.6 million in April, and the Bank intervened by auctioning USD 44 million (up from USD 15.3 million), in line with its Foreign Exchange Intervention Policy. Despite higher forex liquidity, the shilling depreciated marginally month-on-month, trading at an average of TZS 2,616.88/USD versus TZS 2,612.46/USD in April — though it strengthened 3.02% on an annual basis, a turnaround from 3.82% annual depreciation a year earlier.
Chart 10: TZS/USD Exchange Rate — End of Period, May 2025 to May 2026
Source: Bank of Tanzania (Table A10).
Table 6: IFEM Snapshot — April vs May 2026
Indicator
Apr-26
May-26
Total market turnover (USD million)
64.6
119.3
BOT net auction/sale (USD million)
15.3
44.0
Weighted average exchange rate (TZS/USD)
2,612.46
2,616.88
Source: Bank of Tanzania (Section 2.4, Chart 2.4.3).
Related TICGL Research & Tools
Deepen your understanding of Tanzania's economic trajectory with these related TICGL resources:
Tanzania Financial MarketsGovernment SecuritiesInterbank Cash MarketMonetary PolicyInflationPublic DebtVision 2050
Muhtasari kwa Kiswahili
Ripoti ya Kila Mwezi ya Kiuchumi ya Benki Kuu ya Tanzania (BOT) ya Juni 2026 inaonesha kuwa mfumuko wa bei nchini Tanzania uliongezeka hadi asilimia 4.2 mwezi Mei 2026, kutoka asilimia 4.0 mwezi Aprili, ukisukumwa hasa na ongezeko la bei za mafuta duniani kufuatia mgogoro wa Mashariki ya Kati. Hata hivyo, kiwango hicho bado kiko ndani ya lengo la Taifa na vigezo vya EAC na SADC.
Sera ya fedha: Benki Kuu iliendelea kutunza Kiwango cha Riba cha Benki Kuu (CBR) katika asilimia 5.75 kwa robo ya mwaka inayoishia Juni 2026.
Soko la Hatifungani za Serikali: Dhamana za muda mfupi (Treasury bills) ziliendelea kupokelewa vizuri sana na wawekezaji (ombi la TZS bilioni 1,330.3 dhidi ya lengo la TZS bilioni 498.1), huku riba (yield) ikiendelea kushuka hadi wastani wa asilimia 4.74. Hatifungani za muda mrefu (miaka 15 na 20) zilipokea maombi kidogo zaidi ya lengo.
Soko la Fedha baina ya Benki (Interbank Cash Market): Miamala ilipungua hadi TZS bilioni 1,732.7 kutoka TZS bilioni 2,567.8 mwezi Aprili, huku riba ya jumla ikishuka hadi asilimia 6.14. Miamala ya siku 7 iliendelea kutawala soko, ikichukua asilimia 63.8 ya miamala yote.
Soko la Fedha za Kigeni baina ya Benki (IFEM): Mzunguko wa fedha za kigeni uliongezeka hadi Dola milioni 119.3 kutoka Dola milioni 64.6 mwezi Aprili, huku Shilingi ikishuka kidogo hadi wastani wa TZS 2,616.88 kwa Dola moja, lakini ikiimarika kwa asilimia 3.02 ukilinganisha na mwaka jana.
Kwa uchambuzi wa kina zaidi kuhusu mapengo ya kisera yanayozuia uchumi wa Tanzania kufikia thamani ya Dola trilioni 1 ifikapo 2050, soma makala maalum ya TICGL: What's Next for Tanzania's Economy?
Primary source: Bank of Tanzania, Monthly Economic Review, June 2026 (covering data through May 2026). Compiled, analysed and contextualised by the TICGL Research Desk (Tanzania Investment and Consultant Group Ltd / Tanzania Economic Research Institute). Figures marked "p" are provisional and "r" are revised, per BOT convention. This page is for general information purposes and does not constitute investment advice.
Tanzania Lending & Deposit Interest Rates Analysis – May 2026 | TICGL
TICGL Economic • Interest Rate Watch
Tanzania Lending & Deposit Interest Rates Analysis — May 2026
A focused TICGL analysis of Tanzania's bank interest rate structure: overall and negotiated lending rates, lending rates by tenor, deposit rates by tenor, and the interest rate spread — based on Bank of Tanzania data through May 2026.
📅 Published: 12 July 2026🏛️ Source: Bank of Tanzania Monthly Economic Review, June 2026✍️ By TICGL Research Desk
Executive Summary
Tanzania's bank interest rate structure held broadly stable through May 2026, with modest declines across both lending and deposit rates. The overall lending rate was little changed at 15.32 percent (from 15.33% in April), while the negotiated rate for prime customers eased more sharply to 11.90 percent from 12.56 percent — a signal that banks are competing harder for their best borrowers even as headline pricing stays flat. On the deposit side, the overall time deposit rate eased to 8.43 percent from 8.54 percent, while the negotiated deposit rate moderated to 11.25 percent. The resulting short-term interest rate spread narrowed to 5.22 percentage points, from 5.50 points in April 2026 — the tightest spread recorded since at least March 2025, pointing to gradually improving intermediation efficiency in the banking sector.
Overall Lending Rate
15.32%
vs 15.33% in Apr-26
Overall Time Deposit Rate
8.43%
▼ from 8.54% in Apr-26
Short-Term Interest Spread
5.22 pts
▼ from 5.50 pts in Apr-26
Negotiated Lending Rate
11.90%
▼ from 12.56% in Apr-26
Negotiated Deposit Rate
11.25%
▼ from 11.37% in Apr-26
Savings Deposit Rate
2.85%
▼ from 2.91% in Apr-26
12-Month Deposit Rate
10.17%
▲ from 9.81% in Apr-26
Long-Term Lending (3–5yr)
14.43%
▼ from 14.56% in Apr-26
Lending rates: Short-term lending (up to 1 year) eased to 15.38% while medium-term (1–2 year) lending actually rose to 17.11% from 17.19% — the highest tenor on the curve — reflecting banks pricing in duration risk more aggressively than short-dated risk.
Deposit rates: The 12-month deposit rate rose to a 15-month high of 10.17%, even as the overall (blended) time deposit rate fell — suggesting banks are paying up more selectively for longer-dated, stickier deposits while short-tenor deposit pricing eased.
Spread compression: The lending-deposit spread has now narrowed for two consecutive months (5.85 → 5.50 → 5.22 percentage points since March 2026), consistent with the Bank of Tanzania's accommodative liquidity stance feeding through to cheaper credit intermediation.
Negotiated vs. posted rates: The gap between the overall lending rate (15.32%) and the negotiated lending rate (11.90%) has widened to 3.42 percentage points — the largest gap in the 15-month series — underscoring how much more competitively banks price loans for their strongest corporate and prime clients versus posted/list rates.
Must-Read TICGL Analysis
What's Next for Tanzania's Economy? The Policy Gaps Keeping $1 Trillion Out of Reach by 2050
Before diving into the interest rate data below, read TICGL's flagship analysis on the structural and policy gaps standing between Tanzania and its Vision 2050 ambitions — essential context for interpreting the cost of credit and bank intermediation trends discussed here.
Tanzania's overall lending rate stood at 15.32 percent in May 2026, essentially flat month-on-month. Beneath that headline figure, however, the lending curve by tenor tells a more nuanced story: short-term lending (up to 1 year) eased to 15.38%, medium-term (1–2 year) lending climbed to a series-high 17.11%, medium-term (2–3 year) lending eased slightly to 15.60%, long-term (3–5 year) lending fell to 14.43%, and term loans over 5 years eased to 14.08%. This "hump" in the middle of the curve — where 1–2 year money is priced above both shorter and longer tenors — suggests banks see the greatest duration/credit risk in that medium horizon.
Chart 1: Tanzania Lending Rates by Tenor (%) — March 2025 to May 2026
Source: Bank of Tanzania (Table A4: Interest Rates Structure).
Table 1: Lending Interest Rates by Tenor (%), Selected Months
Tenor
May-25
Sep-25
Jan-26
Mar-26
Apr-26
May-26
Short-term (up to 1 year)
15.96
15.52
15.49
15.45
15.31
15.38
Medium-term (1–2 years)
16.35
16.26
16.73
16.53
17.19
17.11
Medium-term (2–3 years)
15.24
15.19
14.97
15.31
15.63
15.60
Long-term (3–5 years)
14.19
14.26
14.05
13.95
14.56
14.43
Term loans (over 5 years)
14.17
14.66
14.24
14.30
13.96
14.08
Overall lending rate
15.18
15.18
15.10
15.11
15.33
15.32
Source: Bank of Tanzania (Table A4: Interest Rates Structure, BOT MER June 2026).
TICGL take: The medium-term (1–2 year) segment is now the most expensive tenor on the lending curve at 17.11% — over 250 basis points above the overall average. For businesses planning working-capital or asset-financing facilities, structuring around shorter (≤1 year, rolled over) or longer (3–5 year) tenors may currently offer materially better pricing than 1–2 year facilities.
2. Deposit Interest Rates by Tenor
The overall time deposit rate eased to 8.43 percent in May 2026 from 8.54 percent in April. Within the deposit ladder, shorter tenors softened — the 1-month rate fell to 8.34% and the 3-month rate rose to 10.52% (its highest point in the 15-month series) — while the 12-month rate climbed to 10.17%, its highest level since at least March 2025. The savings deposit rate, which anchors the bottom of the curve, eased to 2.85%.
Chart 2: Tanzania Deposit Rates by Tenor (%) — March 2025 to May 2026
Source: Bank of Tanzania (Table A4: Interest Rates Structure).
Table 2: Deposit Interest Rates by Tenor (%), Selected Months
Tenor
May-25
Sep-25
Jan-26
Mar-26
Apr-26
May-26
Savings deposit rate
2.52
2.92
2.94
2.89
2.91
2.85
1-month deposit
10.47
9.65
8.96
8.65
9.06
8.34
2-month deposit
9.25
9.28
9.56
9.34
9.67
8.65
3-month deposit
9.85
9.61
9.43
9.56
9.01
10.52
6-month deposit
9.82
10.12
10.20
10.51
10.35
9.87
12-month deposit
9.72
9.84
9.70
9.60
9.81
10.17
24-month deposit
7.49
7.63
7.11
7.03
8.20
7.69
Overall time deposit rate
8.58
8.50
8.33
8.33
8.54
8.43
Source: Bank of Tanzania (Table A4: Interest Rates Structure, BOT MER June 2026).
TICGL take: Savers locking in 12-month deposits are now earning materially more (10.17%) than those on shorter 1- or 2-month placements (8.34% / 8.65%) — the widest 12-month vs. 1-month premium since early 2025. For treasury and cash-management decisions, this favours term deposits over rolling short-tenor placements at the margin.
3. Interest Rate Spread Analysis
The short-term interest rate spread — defined by the Bank of Tanzania as the short-term (up to 1 year) lending rate less the 12-month deposit rate — narrowed to 5.22 percentage points in May 2026, from 5.50 points in April and 5.85 points in March. This is the narrowest spread recorded in the current data series, and reflects both softer short-term lending pricing and a simultaneously higher 12-month deposit rate.
Chart 3: Overall Lending vs. Overall Deposit Rate, and Spread (Percentage Points) — March 2025 to May 2026
Source: Bank of Tanzania (Table A4); spread computed by TICGL as Overall Lending Rate minus Overall Time Deposit Rate.
Table 3: Short-Term Interest Rate Spread (%), Dec 2025 – May 2026
Indicator
Dec-25
Jan-26
Feb-26
Mar-26
Apr-26
May-26
Short-term lending rate (up to 1 year)
15.46
15.49
15.41
15.45
15.31
15.38
12-month deposit rate
9.58
9.70
9.82
9.60
9.81
10.17
Short-term interest spread
5.88
5.79
5.59
5.85
5.50
5.22
Source: Bank of Tanzania (Table 2.3.1, BOT MER June 2026).
TICGL take: A narrowing spread is a favourable signal for financial intermediation efficiency — it means the "wedge" banks charge between what they pay savers and what they charge borrowers is shrinking, benefiting both sides of the balance sheet. If sustained, this trend should support both credit access for businesses (23.2% private sector credit growth was recorded in May 2026) and better returns for term depositors.
4. Negotiated Rates: Prime Client Pricing
Negotiated rates — the pricing banks offer their strongest, highest-volume clients — moved in opposite directions from posted rates in May 2026. The negotiated lending rate fell sharply to 11.90 percent from 12.56 percent in April, its lowest level in the 15-month series, while the negotiated deposit rate eased to 11.25 percent from 11.37 percent. The gap between the overall (posted) lending rate and the negotiated lending rate has widened to 3.42 percentage points, the widest gap recorded since March 2025 — evidence of intensifying competition among banks for prime corporate borrowers even as list pricing for the broader market stays essentially flat.
Chart 4: Negotiated Lending Rate vs. Negotiated Deposit Rate (%) — March 2025 to May 2026
Source: Bank of Tanzania (Table A4: Interest Rates Structure).
Source: Bank of Tanzania (Table A4: Interest Rates Structure, BOT MER June 2026).
TICGL take: Note the crossover: since around late 2025, the negotiated deposit rate (11.25% in May) has moved above the negotiated lending rate (11.90% is only marginally above it) — large depositors with negotiating power are earning nearly as much as prime borrowers are paying. This compression matters for corporate treasury strategy: businesses with strong banking relationships should actively negotiate rather than accept posted/list pricing on both sides of the balance sheet.
5. Foreign Currency Lending & Deposit Rates
Foreign currency (largely USD-denominated) lending and deposit rates remain structurally lower than their TZS counterparts, reflecting the absence of currency depreciation risk premium for lenders and the global USD rate environment. The overall foreign currency lending rate stood at 8.72 percent in May 2026, while the foreign currency overall time deposit rate was 4.47 percent — both up modestly from April.
Chart 5: TZS vs. Foreign Currency Overall Lending Rate (%) — March 2025 to May 2026
Source: Bank of Tanzania (Table A4: Interest Rates Structure, Section B: Foreign Currency).
Source: Bank of Tanzania (Table A4: Interest Rates Structure, Section B).
TICGL take: The TZS–USD lending rate differential remains wide (15.32% vs. 8.72%, a gap of roughly 6.6 percentage points), which continues to make foreign-currency borrowing attractive for importers and dollar-revenue businesses — provided they can manage the associated exchange rate risk, especially with the shilling's recent mild depreciation trend on a month-on-month basis.
6. May 2026 Rate Ladder Snapshot
The chart below consolidates the full lending and deposit rate ladder as it stood at the end of May 2026, giving a single-glance view of where funding and credit costs sit across the maturity spectrum.
Chart 6: Tanzania Lending & Deposit Rate Ladder — Snapshot, May 2026
Source: Bank of Tanzania (Table A4, BOT MER June 2026).
Policy backdrop: This rate structure sits against a Central Bank Rate held at 5.75% and a 7-day interbank cash market rate averaging 5.92% in May 2026 — meaning banks' overall lending rate carries a spread of roughly 9.6 percentage points over the policy rate, while the overall deposit rate sits only about 2.7 points above it. For a fuller picture of the monetary policy and money-market backdrop shaping these numbers, see TICGL's companion analysis on Tanzania's Government securities and interbank cash markets.
Related TICGL Research & Tools
Deepen your understanding of Tanzania's financial markets and economic trajectory with these related TICGL resources:
Tanzania Lending RatesDeposit RatesInterest Rate SpreadNegotiated RatesBanking SectorMonetary Policy
Muhtasari kwa Kiswahili
Ripoti ya Kila Mwezi ya Kiuchumi ya Benki Kuu ya Tanzania (BOT) ya Juni 2026 inaonesha kuwa riba za mikopo na amana za benki nchini Tanzania ziliendelea kuwa tulivu mwezi Mei 2026, huku kukiwa na upungufu mdogo katika pande zote mbili.
Riba ya mikopo kwa ujumla: Ilibaki karibu bila mabadiliko kwa asilimia 15.32, kutoka asilimia 15.33 mwezi Aprili.
Riba ya mikopo iliyojadiliwa (negotiated) kwa wateja wakubwa: Ilishuka kwa kiasi kikubwa hadi asilimia 11.90 kutoka asilimia 12.56, ikionesha ushindani mkubwa baina ya benki kuvutia wateja wazuri.
Riba ya amana kwa ujumla: Ilishuka hadi asilimia 8.43 kutoka asilimia 8.54, ingawa riba ya amana za miezi 12 iliongezeka hadi asilimia 10.17 — kiwango cha juu zaidi katika miezi 15 iliyopita.
Pengo la riba (interest rate spread): Pengo baina ya riba ya mikopo ya muda mfupi na riba ya amana za miezi 12 lilipungua hadi pointi 5.22, kutoka pointi 5.50 mwezi Aprili — hii ni ishara nzuri ya kuboreka kwa ufanisi wa upatanishi wa kifedha (intermediation) katika sekta ya benki.
Riba za fedha za kigeni: Riba ya mikopo kwa dola ilikuwa asilimia 8.72, ikiendelea kuwa chini sana ukilinganisha na riba ya mikopo kwa Shilingi (asilimia 15.32).
Kwa uchambuzi wa kina zaidi kuhusu soko la fedha la Tanzania (Government Securities Market na Interbank Cash Market), soma makala shirikishi ya TICGL: Tanzania Financial Markets Review — June 2026. Na kwa mapengo ya kisera yanayozuia uchumi wa Tanzania kufikia thamani ya Dola trilioni 1 ifikapo 2050, soma: What's Next for Tanzania's Economy?
Primary source: Bank of Tanzania, Monthly Economic Review, June 2026 (covering data through May 2026), Table A4: Interest Rates Structure and Table 2.3.1: Lending and Deposit Interest Rates. Compiled, analysed and contextualised by the TICGL Research Desk (Tanzania Investment and Consultant Group Ltd / Tanzania Economic Research Institute). The interest rate spread series in Chart 3 is computed by TICGL (Overall Lending Rate minus Overall Time Deposit Rate) using official BOT source data; Table 3's "short-term interest spread" reproduces BOT's own published definition and figures. This page is for general information purposes and does not constitute investment or financial advice.
Tanzania Inflation Report June 2026: NCPI Rises to 125.04 as Headline Inflation Eases to 4.0% | TICGL
TICGL Economic Research • National Bureau of Statistics Data • Published 8 July 2026
Tanzania's Inflation Eases to 4.0% in June 2026 as Transport Costs Keep Climbing
The National Bureau of Statistics' June 2026 NCPI release shows headline inflation cooling from 4.2% to 4.0% and food inflation easing sharply — even as transport costs surge 13.6% year-on-year and core inflation creeps higher. TICGL breaks down every number that matters.
Source: National Bureau of Statistics (NBS), Tanzania — Press Release Ref: AC 334/376/01/380, dated 8th July 2026. Analysis and visualization by TICGL Economic Research.
Executive Summary
Headline inflation eased to 4.0% in June 2026, down from 4.2% in May 2026, as the National Consumer Price Index (NCPI) rose from 124.90 to 125.04 (2020 = 100).
Food and non-alcoholic beverages inflation fell sharply to 4.1% from 5.6% in May — the single largest driver of the headline slowdown, even though several staples (sorghum, lentils, cassava) still recorded monthly increases.
Core inflation, which strips out volatile food and energy prices, rose to 3.7% from 3.4%, suggesting underlying price pressure is building even as headline inflation cools.
Transport remains the fastest-inflating major group at 13.6% year-on-year, pushed by a 7.6% monthly jump in motorcycle (bodaboda) fares, plus rising diesel, bus and taxi fares.
Energy, Fuel and Utilities inflation accelerated to 6.3% from levels seen in May, with gas (+4.3%) and kerosene (+4.5%) both climbing on a monthly basis.
Tanzania's inflation for June 2026 remains within the Bank of Tanzania's medium-term target band, but the widening gap between easing food inflation and rising core and transport inflation is a signal worth watching for FY2026/27 fiscal and monetary planning.
The National Consumer Price Index (NCPI) tracks the changing cost of a fixed basket of 383 goods and services — 132 food and non-alcoholic beverage items and 251 non-food items — priced across all 26 regional headquarters on the Tanzanian mainland. Weights are drawn from the 2017/18 Household Budget Survey, with 2020 as both the base and index reference period. The index is compiled following the UN's Classification of Individual Consumption by Purpose (COICOP 2018) across 13 divisions, and elementary aggregates use a geometric mean of price relatives while higher-level aggregates apply the Lowe (Laspeyres-type) index formula.
383
Goods & services in the basket
132
Food & non-alcoholic beverage items
251
Non-food items
26
Mainland regions covered
2020
Index & base reference period
02Headline Inflation: The 13-Month Trend
The chart below plots the NCPI level against the annual headline inflation rate from June 2025 through June 2026. The index climbed steadily from 120.18 to 125.04 over the year, while the inflation rate fluctuated in a comparatively narrow band of 3.2% to 4.2% before easing to 4.0% in the latest release.
NCPI Level vs. Headline Inflation Rate — June 2025 to June 2026 2020 = 100
Source: NBS NCPI Press Release, Chart 1, June 2026 (Ref: AC 334/376/01/380).
Table A — Monthly NCPI level and annual inflation rate, June 2025–June 2026
Month
NCPI (2020=100)
Annual Inflation Rate (%)
03Food vs. Core vs. Headline: A Diverging Picture
June 2026 tells a split story. Food inflation fell hard — from 5.6% to 4.1% — pulling the headline rate down with it. But core inflation, which excludes unprocessed food, energy and utilities, moved the other way, rising from 3.4% to 3.7%. That divergence matters: it suggests that once volatile food and fuel effects are stripped out, the underlying pace of price increases across the wider economy is quietly accelerating.
Headline vs. Food vs. Core Inflation, May 2026 → June 2026
Source: NBS NCPI Press Release, Sections 2.1–2.3, June 2026.
04Inflation by Consumption Group (COICOP)
Table 1 of the NBS release breaks the NCPI into 13 COICOP divisions. Transport (+13.6% y/y) and Energy, Fuel & Utilities (+6.3% y/y) are by far the fastest-moving categories, while Insurance & Financial Services (+0.2%) and Recreation, Sport & Culture (+0.5%) barely moved over the year.
12-Month Inflation Rate by COICOP Group — June 2026
Weights shown in Table B reflect each group's share of total household expenditure used to compile the NCPI.
Table B — NCPI by main group, weight and index values (2020=100)
#
Main Group
Weight (%)
Jun 2025
May 2026
Jun 2026
1-Month Change
12-Month Change
05Core, Non-Core, Goods, Services & Energy Indices
Beyond the 13 main groups, NBS publishes supplementary indices that help policymakers separate volatile price swings from underlying trends. The Services Index rose 5.4% year-on-year — faster than the Goods Index at 3.3% — indicating that labour- and rent-linked costs are rising faster than tradable goods prices.
Supplementary Indices — 12-Month Change
Weight Share of Core vs. Non-Core
Table C — Supplementary index aggregations, June 2026
Index
Weight (%)
Jun 2025
May 2026
Jun 2026
1-Month Change
12-Month Change
06What Pushed Prices Up Between May and June 2026
Month-on-month, the NCPI rose only marginally — from 124.90 to 125.04 — but the release names specific items behind that movement. On the food side, sorghum grains (+5.1%), dried lentils (+3.8%) and sorghum flour (+4.5%) led the increases. On the non-food side, motorcycle/bodaboda fares (+7.6%), kerosene (+4.5%) and gas (+4.3%) were the standout movers.
Top Monthly Price Movers — Food vs. Non-Food Items (May → June 2026)
All values are month-on-month percentage changes for individual items within the NCPI basket.
Full list of food items contributing to the June 2026 increase
Sorghum grains +5.1%Sorghum flour +4.5%Dried lentils +3.8%Dried peas +3.6%Poultry live +3.7%Dried sardines +3.5%Fresh cassava +2.9%Fresh fish +2.7%Flour of cassava +1.9%Soft drinks +1.7%Wheat flour +1.3%Irish/round potatoes +0.7%Bottled drinking water +0.6%Raw milk of cattle +0.3%Dried cowpeas +0.3%Pasta products +0.2%Meat of poultry +0.1%
Full list of non-food items contributing to the June 2026 increase
Motorcycle/bodaboda fare +7.6%Kerosene +4.5%Gas +4.3%Charcoal +3.0%Bus fare +3.1%Diesel +2.6%Taxi fare +2.6%Clothing materials +1.1%Products/materials for dwelling maintenance +1.0%Footwear (children) +0.3%Footwear (women) +0.2%Actual rentals paid by tenants +0.2%Footwear (men) +0.1%
07Why This Matters for Business and Investment in Tanzania
For businesses operating in or entering Tanzania, three signals in this release are worth flagging. First, easing food inflation is good news for household purchasing power and consumer-facing sectors such as retail and FMCG. Second, rising core inflation — now at its highest point in the 13-month window shown here — suggests that non-food, non-energy cost pressures (rent, services, wages) are building steadily, which matters for pricing and wage-planning decisions. Third, transport inflation at 13.6% is a direct cost pressure on logistics, distribution and last-mile delivery across Tanzania's regions, and is closely tied to fuel and bodaboda fare movements that also touch informal-sector incomes.
08NCPI Release Schedule
NBS publishes the NCPI monthly. The next three scheduled releases are set out below.
Table D — Upcoming NCPI release dates
Reference Month
Release Date
July 2026
10th August 2026
August 2026
08th September 2026
September 2026
08th October 2026
09Muhtasari kwa Kiswahili
Mfumuko wa bei nchini Tanzania umepungua hadi asilimia 4.0 mwezi Juni 2026, kutoka asilimia 4.2 mwezi Mei 2026, kulingana na Ofisi ya Taifa ya Takwimu (NBS). Kiwango cha mfumuko wa bei za vyakula kimeshuka kwa kasi hadi asilimia 4.1 kutoka asilimia 5.6, ikichangia kwa kiasi kikubwa kupungua kwa mfumuko wa bei kwa ujumla. Hata hivyo, mfumuko wa bei msingi (Core Inflation) umepanda hadi asilimia 3.7 kutoka asilimia 3.4, ikionesha kuwa shinikizo la bei kwenye bidhaa na huduma zisizo za vyakula na nishati linaendelea kuongezeka.
Sekta ya usafirishaji (Transport) imeendelea kuongoza kwa kasi ya mfumuko wa bei ya asilimia 13.6 kwa mwaka, ikichagizwa na ongezeko la nauli za bodaboda (+7.6% kwa mwezi), mafuta ya dizeli, na nauli za mabasi na teksi. Bei za nishati, gesi na mafuta ya taa pia ziliongezeka kwa kasi mwezi Juni 2026. Takwimu hizi ni muhimu kwa wafanyabiashara, wawekezaji, na watunga sera wanapopanga bajeti na mikakati ya bei kwa mwaka wa fedha 2026/27.
Source: National Bureau of Statistics (NBS), United Republic of Tanzania — "National Consumer Price Index (NCPI) for June, 2026," Press Release Ref: AC 334/376/01/380, dated 8th July 2026. All figures, tables and item-level price movements are drawn directly from this NBS publication. Analysis, charts and commentary are produced by TICGL Economic Research and do not constitute financial or investment advice.
Explore More Tanzania Economic Research from TICGL
Tanzania Tourism Economic Impact 2025: Arrivals, Earnings & Forecast to 2030/2031 | TICGL
TICGL Economic Research · Tourism & Macroeconomy
Tanzania's Tourism Dividend: Record 2025 Earnings and the Road to a US$1 Trillion Economy
A statistical breakdown of the 2025 International Visitors' Exit Survey — arrivals, spending, source markets, and what a record tourism season means for Tanzania's foreign exchange earnings, growth trajectory, and the outlook to 2030/2031.
Published: 08 July 2026By TICGL / Tanzania Economic Research Institute (TERI)Source: NBS, BOT, MNRT, ZCT, Immigration Services Department — 2025 Exit Survey
2,294,495
International arrivals, 2025 (URT)
▲ 7.1% vs 2024
USD 4.41bn
Tourism earnings, 2025 (URT)
▲ 13% vs 2024
USD 289
Avg. spend / person / night (URT)
▲ 19% vs 2024
USD 1.19bn
Zanzibar tourism earnings, 2025
▲ 19.3% vs 2024
Executive Summary
Tanzania's tourism sector closed 2025 with its strongest performance since the 2001 inception of the International Visitors' Exit Survey. According to the 25th edition of the survey — jointly produced by the Ministry of Natural Resources and Tourism (MNRT), the Bank of Tanzania (BOT), the National Bureau of Statistics (NBS), the Immigration Services Department (ISD) and the Zanzibar Commission for Tourism (ZCT) — the country welcomed 2,294,495 international visitors in 2025, a 7.1% increase over 2024, and earned USD 4,410.6 million in tourism receipts, up 13% year-on-year. Zanzibar, tracked separately, recorded 654,880 arrivals and USD 1,190.8 million in earnings — a 19.3% jump.
The headline number that matters most for macroeconomic planners is not arrivals but value per visitor: overall average expenditure per person per night rose 19% in mainland Tanzania (to USD 289) and 9% in Zanzibar (to USD 274), meaning earnings grew almost twice as fast as arrivals. This report unpacks that gap statistically, traces the tourism–growth relationship, and projects the sector's trajectory to 2030/2031 — a horizon directly relevant to Tanzania's Dira 2050 ambition of a US$1 trillion economy.
📈
Companion Research: What's Next for Tanzania's Economy?
This tourism analysis feeds directly into TICGL's broader macroeconomic investigation of the policy gaps standing between Tanzania and its Dira 2050 target of a US$1 trillion economy. If tourism is one of the country's clearest growth engines, understanding where policy is — and isn't — keeping pace is essential context.
Global tourism fully recovered its pre-pandemic trajectory in 2025. International arrivals worldwide reached 1.52 billion, roughly 60 million more than 2024 (a 4% annual increase), while international tourism receipts rose 5% to approximately USD 1.9 trillion. Total tourism export revenues — receipts plus passenger transport — hit a record USD 2.2 trillion. Africa was among the fastest-growing regions, attracting over 80 million visitors and posting a 117% recovery rate relative to 2019, ahead of the global average of 104%.
Chart 1 — Global International Tourist Arrivals, 2016–2025 (millions)
Source: UNWTO World Tourism Barometer, January 2026. p = provisional.
Why this matters for Tanzania: Tanzania's 7.1% arrival growth outpaced the global average of 4%, and its 13% earnings growth outpaced the global receipts growth of 5% — evidence that Tanzania is gaining share of global tourism demand, not merely riding the post-pandemic tide.
Tanzania's tourist arrivals have followed a clear V-shaped recovery since the 2020 pandemic collapse (621,000 arrivals, a 59% drop from 2019). By 2025, arrivals reached 2,294,495 — more than 1.5 times the pre-pandemic 2019 level of 1,527,000, and over 3.6 times the 2020 trough.
Chart 3 — International Tourist Arrivals in Tanzania, 2015–2025 (thousands)
Source: Immigration Services Department (ISD), reproduced in the 2025 International Visitors' Exit Survey Report.
Table 1 — Tanzania Tourism Headline Indicators, 2024 vs 2025
Indicator
2024
2025
Change
International arrivals (URT)
2,141,895
2,294,495
+7.1%
Tourism earnings, URT (USD million)
3,903.1
4,410.6
+13.0%
Zanzibar arrivals
601,006
654,880
+9.0%
Zanzibar tourism earnings (USD million)
997.8
1,190.8
+19.3%
Avg. expenditure per person/night, URT (USD)
243
289
+19.1%
Avg. expenditure per person/night, Zanzibar (USD)
251
274
+9.0%
Average length of stay, URT (nights)
10
9
−1 night
Average length of stay, Zanzibar (nights)
7
6
−1 night
Package tour share, URT
56.3%
58.8%
+2.5 pts
Package tour share, Zanzibar
61.8%
67.2%
+5.4 pts
3. The Tourism–Economy Nexus: Tanzania's "Safari Dividend"
TICGL uses the term "Safari Dividend" to describe the gap between arrivals growth and earnings growth in Tanzania's tourism data — the extra value captured per visitor beyond simple volume growth. In 2025, arrivals grew 7.1% but earnings grew 13.0%, meaning roughly 5.5 percentage points of earnings growth came purely from visitors spending more, not from more visitors arriving. This is the statistical signature of a maturing, higher-value tourism economy rather than a purely volume-driven one.
Chart 4 — Decomposing 2025 Earnings Growth (URT)
Chart could not load. Arrivals growth contribution: 7.1%. Per-visitor spend growth contribution: ~5.5%. Combined earnings growth: 13.0%.
TICGL calculation from NBS/BOT/MNRT 2025 Exit Survey data.
Chart 5 — Avg. Expenditure per Person/Night, URT, 2019–2025 (USD)
Source: 2025 International Visitors' Exit Survey Report, Chart 2.30.
Tourism functions as one of Tanzania's principal sources of foreign exchange, alongside agricultural exports and mining. Every dollar of tourism earnings that enters the economy strengthens the current account, supports the shilling, and — through the hospitality, transport, and retail value chains — cascades into employment and small business income far beyond the parks and beaches where the spending physically occurs. The sector's 2025 performance, following an official government assessment of the sector as having "fully recovered and surpassed the COVID-19 pandemic era," reflects arrivals more than 1.5 times above 2019 pre-pandemic levels.
Macro read: With broader economic growth running at approximately 6% per year and tourism earnings growing more than twice that rate, tourism is currently expanding as a share of Tanzania's overall economic activity — reinforcing its position as one of the country's fastest-growing tradable sectors.
4. Source Markets: Who Is Visiting Tanzania
The top 15 source markets accounted for over 75% of total visitors to mainland Tanzania and about 77% of visitors to Zanzibar in 2025. The United States and Italy continue to anchor mainland demand, while Italy dominates Zanzibar. Notably, the Netherlands and India entered the mainland top-15 list in 2025, displacing Australia and Burundi — a sign of market diversification driven by promotional efforts.
Chart 6 — Top 15 Source Markets, Tanzania Mainland (URT), 2025 (%)
Chart could not load. See Table 2 below for full data.
Source: 2025 International Visitors' Exit Survey, Chart 2.1.
Chart 7 — Top 15 Source Markets, Zanzibar, 2025 (%)
Chart could not load. See Table 3 below for full data.
Source: 2025 International Visitors' Exit Survey, Chart 2.3.
Table 2 — Top 15 Source Markets, Tanzania Mainland, 2024 vs 2025 (%)
Country
2024 (%)
2025 (%)
United States
15.1
12.4
Italy
11.6
11.8
France
7.2
7.0
Kenya
8.8
6.4
United Kingdom
6.3
6.0
Germany
4.8
4.8
Zambia
3.2
4.7
Netherlands
—
3.8
Spain
5.3
3.6
DR Congo
3.0
3.2
China
3.0
3.1
South Africa
3.1
2.4
India
—
2.2
Canada
2.1
2.0
Zimbabwe
2.3
2.0
Table 3 — Top 15 Source Markets, Zanzibar, 2024 vs 2025 (%)
Country
2024 (%)
2025 (%)
Italy
19.9
18.8
France
12.3
10.6
United Kingdom
9.0
7.7
United States
7.2
6.6
Germany
7.0
6.4
Netherlands
2.3
5.6
Spain
7.5
5.1
South Africa
5.9
3.3
Poland
—
2.3
Australia
2.3
2.3
Kenya
3.6
2.0
Belgium
1.2
1.8
Greece
—
1.7
Canada
1.4
1.7
Austria
1.5
1.7
5. Purpose of Visit, Travel Arrangement & Length of Stay
Leisure and holidays dominate: 64.6% of mainland visitors and 92.9% of Zanzibar visitors travel for this purpose. Business travel remains economically significant on the mainland (12.5%) — reflecting Tanzania's role as a logistics hub for landlocked neighbours such as Zambia and the DRC — but is negligible in Zanzibar (0.4%).
Chart 8 — Purpose of Visit, URT vs Zanzibar, 2025 (%)
Chart could not load. Leisure/holidays — URT: 64.6%, Zanzibar: 92.9%. VFR — URT: 12.3%, Zanzibar: 3.9%. Business — URT: 12.5%, Zanzibar: 0.4%. Meetings — URT: 2.7%, Zanzibar: 0.8%. Other — URT: 7.9%, Zanzibar: 2.0%.
Source: 2025 Exit Survey, Chart 2.9.
Chart 9 — Package Tour Share Trend, URT vs Zanzibar, 2019–2025 (%)
The rising share of package tours (58.8% mainland, 67.2% Zanzibar) is economically important: package tourists spend far more per night than independent travellers. In 2025, mainland package travellers spent USD 479 per person per night versus USD 203 for independent travellers — a 2.4x premium.
Table 4 — Average Length of Stay, URT vs Zanzibar, 2020–2025 (nights)
Chinese visitors recorded the highest average expenditure per person per night in the mainland top-15 markets at USD 551 (up from USD 491 in 2024), followed by long-haul European and North American travellers. Visitors from neighbouring landlocked countries (DR Congo, Kenya, Zambia, Zimbabwe) spent considerably less per night, consistent with shorter, business-oriented, cross-border trips rather than long-haul leisure travel.
Chart 10 — Independent vs Package Expenditure per Person/Night, URT, 2019–2025 (USD)
Table 5 — Tourism Earnings by Purpose of Visit, URT, 2025 (USD million)
Purpose of visit
Package
Non-package
Total
Leisure and holidays
3,023.3
899.1
3,922.4
Visiting friends & relatives
4.0
91.4
95.4
Other
26.0
48.0
74.1
Business
3.1
45.9
49.0
Total tourism earnings
3,056.5
1,084.4
4,140.9
Note: This breakdown table (Table 2.16 of the source survey) totals USD 4,140.9 million; the headline national figure cited in the survey's Executive Summary is USD 4,410.6 million. TICGL reproduces both as published by NBS/BOT/MNRT without adjustment.
Payment channels: Cash remained the dominant payment method in 2025 (87.0% URT, 82.4% Zanzibar), with credit/debit cards accounting for 12.8% and 17.1% respectively — a formal-sector share that has room to grow as digital and mobile-money payment infrastructure expands in the tourism corridor.
7. Zanzibar: A Distinct Economic Engine
Zanzibar's tourism economy is structurally different from the mainland's: 92.9% of visitors come for leisure, average expenditure growth (9%) has been more moderate than the mainland's (19%), and the package-tour share (67.2%) is now the highest on record. Beach tourism accounts for 88.9% of all recorded activity, with wildlife (10.6%) — largely dolphin and marine excursions — a distant second.
Table 6 — Zanzibar Tourism Earnings by Purpose of Visit, 2025 (USD million)
Purpose of visit
Package
Non-package
Total
Leisure and holidays
702.6
486.4
1,188.9
Visiting friends & relatives
0.4
1.1
1.5
Business
0.2
0.0
0.3
Other
0.0
0.1
0.1
Total earnings
703.2
487.6
1,190.8
Zanzibar's near-total dependence on leisure tourism (over 92% of arrivals) makes it more exposed to global discretionary-spending cycles than the mainland's more diversified visitor base — a risk concentration policymakers should weigh alongside the island's clear revenue strengths.
8. TICGL Forecast: Arrivals & Earnings to 2030/2031
Methodology note: The figures below are TICGL Economic Research indicative projections, not official government forecasts. They apply three compound annual growth rate (CAGR) scenarios to the 2025 base year (2,294,495 arrivals; USD 4,410.6 million in earnings): a Low case (4% arrivals / 6% earnings CAGR, reflecting a slowdown toward the global UN Tourism outlook of 3–4%), a Base case (6% arrivals / 9% earnings CAGR, aligned with Tanzania's broader ~6% GDP growth trajectory and continued per-visitor spend gains), and a High case (8% arrivals / 12% earnings CAGR, reflecting sustained momentum from Tanzania's 2025 World Travel Awards wins and expanding air connectivity).
Chart 11 — Forecast: Tanzania International Arrivals, 2019–2031 (millions, scenario analysis)
Chart could not load. See Table 7 below for full forecast figures.
Historical: ISD/NBS. Projections 2026–2031: TICGL Economic Research (indicative, non-official).
Reading the forecast: Under the Base case, Tanzania's tourism sector alone could contribute a cumulative USD 30–35 billion in earnings between 2026 and 2031, with the annual run-rate approaching USD 7.4 billion by 2031 — roughly 68% above the 2025 level. Even the Low case implies earnings growth outpacing global tourism receipts projections (3–4% p.a.), underscoring how much of Tanzania's tourism growth story is domestically driven rather than dependent on global tailwinds.
9. Constraints & Areas Needing Investment
Visitors were candid about what needs improvement. Roads and infrastructure top the list by a wide margin in both mainland Tanzania (35.3% of comments) and Zanzibar (29.6%), followed by airport and hotel facilities, and traffic congestion.
Table 9 — Top Areas for Improvement Cited by Visitors, 2025 (%)
Area
URT (%)
Zanzibar (%)
Roads and infrastructure
35.3
29.6
Airport and hotel facilities
8.5
7.7
Traffic jams
7.0
5.3
Visa and airport procedures
4.9
6.1
Security and safety
3.2
5.6
Social services
3.6
3.8
Customer service quality
3.5
4.5
Conservation measures
3.1
4.8
The government has responded with targeted investment: ongoing road construction inside Ngorongoro Conservation Area, Ruaha and Mikumi national parks; the near-complete Msalato International Airport in Dodoma; expansion of AAKIA in Zanzibar; and new airstrips at Tanga, Lake Manyara, Nyerere National Park and Serengeti Mugumu. These directly target the infrastructure bottleneck visitors flag most consistently — and represent the clearest lever for converting the High-case forecast scenario (Section 8) into reality.
10. Outlook & Policy Implications
Three factors underpin a positive medium-term outlook for Tanzania's tourism-driven growth: (1) brand momentum — Tanzania's 18-award sweep at the 2025 World Travel Awards, Serengeti's ranking as Africa's best wildlife park, and a top-10 global ranking for natural beauty are raising the country's profile in exactly the long-haul, high-spend markets (US, Italy, China) that already post the highest per-night expenditure; (2) connectivity investment — new routes (e.g., RwandAir's Kigali–Zanzibar service) and airport upgrades are reducing a structural constraint on arrivals growth; and (3) product diversification — the leading attractions' combined visitor share fell from 62.6% (2024) to 58.9% (2025), showing visitors are spreading demand across a wider range of sites, which reduces overcrowding risk at flagship parks and builds resilience into the visitor economy.
For policymakers, the clearest actionable insight from the 2025 data is that value capture, not just volume, is the more powerful growth lever: a 1 percentage-point increase in average nightly expenditure has historically moved earnings more than a 1 percentage-point increase in arrivals. Continued investment in service quality, product diversification beyond traditional wildlife/beach circuits, and infrastructure that reduces friction (roads, airports, visa processes) should therefore be prioritised alongside — not instead of — market-diversification and route-development efforts.
11. Frequently Asked Questions
How much did tourism earn Tanzania in 2025?
Tanzania's tourism sector earned USD 4,410.6 million in 2025, up 13% from USD 3,903.1 million in 2024. Zanzibar separately recorded USD 1,190.8 million, up 19.3% from USD 997.8 million in 2024.
How many tourists visited Tanzania in 2025?
Tanzania recorded 2,294,495 international arrivals in 2025 (+7.1% year-on-year). Zanzibar recorded 654,880 arrivals (+9%).
Which countries send the most tourists to Tanzania?
The United States (12.4%), Italy (11.8%), France (7.0%), Kenya (6.4%) and the United Kingdom (6.0%) lead mainland arrivals. Italy (18.8%), France (10.6%), the UK (7.7%) and the US (6.6%) lead Zanzibar arrivals.
What is Tanzania's tourism forecast for 2030 and 2031?
Under TICGL's Base-case scenario (6% CAGR), arrivals could reach approximately 3.07 million in 2030 and 3.25 million in 2031, with earnings potentially reaching USD 6.8 billion and USD 7.4 billion respectively. These are indicative research estimates, not official projections.
How much do tourists spend per night in Tanzania?
In 2025, average expenditure was USD 289 per person per night in mainland Tanzania and USD 274 per person per night in Zanzibar.
Related TICGL Research & Tools
Continue exploring Tanzania's economic story with these related resources from TICGL and the Tanzania Economic Research Institute (TERI).
Contribute to research like this — apply to TICGL's Researcher Programme.
Muhtasari kwa Kiswahili
Hapa chini ni muhtasari wa uchambuzi huu wa kiuchumi kuhusu sekta ya utalii Tanzania kwa mwaka 2025, kama ulivyoainishwa katika Ripoti ya Utafiti wa Watalii Wanaotoka nchini (International Visitors' Exit Survey) 2025.
Idadi ya watalii: Tanzania ilipokea watalii 2,294,495 mwaka 2025, ongezeko la asilimia 7.1 ikilinganishwa na mwaka 2024. Zanzibar peke yake ilipokea watalii 654,880, ongezeko la asilimia 9.
Mapato ya utalii: Sekta ya utalii iliingiza jumla ya Dola za Kimarekani milioni 4,410.6 (Tanzania Bara), ongezeko la asilimia 13 kutoka mwaka 2024. Zanzibar iliingiza Dola milioni 1,190.8, ongezeko la asilimia 19.3.
Matumizi ya watalii: Kwa wastani, kila mtalii alitumia Dola 289 kwa siku Tanzania Bara (ongezeko la asilimia 19) na Dola 274 kwa siku Zanzibar (ongezeko la asilimia 9) — ushahidi kwamba ukuaji wa mapato unatokana zaidi na kuongezeka kwa thamani ya matumizi ya kila mtalii, si idadi tu.
Nchi zinazoongoza kwa watalii: Marekani, Italia, Ufaransa, Kenya na Uingereza zinaongoza Tanzania Bara; wakati Italia, Ufaransa na Uingereza zinaongoza Zanzibar.
Utabiri hadi 2030/2031: Kwa kutumia mfumo wa TICGL wa "Base case" (ukuaji wa asilimia 6 kwa mwaka), watalii wanaweza kufikia takriban milioni 3.07 mwaka 2030 na milioni 3.25 mwaka 2031, huku mapato yakiweza kufikia Dola bilioni 6.8 na bilioni 7.4 mtawalia. Haya ni makadirio ya kitafiti ya TICGL, si takwimu rasmi za serikali.
Changamoto kuu: Miundombinu ya barabara, viwanja vya ndege, na msongamano wa magari ndizo changamoto kubwa zilizotajwa na watalii — na ndizo maeneo yanayohitaji uwekezaji zaidi ili kuongeza mapato ya sekta hii muhimu kwa uchumi wa Tanzania.
Data Source
The 2025 International Visitors' Exit Survey Report — Ministry of Natural Resources and Tourism (MNRT), Bank of Tanzania (BOT), National Bureau of Statistics (NBS), Immigration Services Department (ISD), Zanzibar Commission for Tourism (ZCT). Global figures: UNWTO World Tourism Barometer, January 2026. TICGL forecast figures (Section 8) are TICGL Economic Research estimates and are not official government projections.
Why Did Dangote Choose Kenya Over Tanzania for Its $20 Billion Refinery? | TICGL
TICGL / TERI · Investment Research Note · July 2026
Why Did Dangote Choose Kenya Over Tanzania for Its $20 Billion Refinery — And What Does It Mean for Investors?
Dangote Industries has confirmed its 700,000 bpd, USD 15-20 billion East African refinery will rise at Lamu, Kenya — not Tanga, Tanzania. TICGL unpacks the diplomatic misstep, the deeper structural gaps behind it, and the parallel power, fertiliser and port pipeline Tanzania just secured instead.
Prepared by: TICGL Research DivisionAuthor: Amran Bhuzohera, Managing Director & Chief EconomistPublished: July 2026
The headline number, the headline decision, and why TICGL says this was never really about diplomacy alone.
700,000
barrels/day refinery capacity
$15-20bn
estimated investment size
Lamu, Kenya
final chosen site
~15%
Tanzania's 2025 FDI realisation rate
Dangote Industries Limited has confirmed that its planned 700,000-barrel-per-day East African refinery — the group's largest refining investment outside Nigeria — will be sited at Lamu, Kenya, rather than Tanga, Tanzania. Company officials told Reuters that the site has been selected, soil tests are under way, and design and engineering work has commenced, with financing to be drawn from internal cash flow, bonds and a planned initial public offering.
The decision followed a diplomatic misstep rather than a straightforward least-cost analysis: Kenya's President William Ruto announced at a Nairobi summit that the refinery would be built at Tanga before Tanzania's government had approved the plan, prompting President Samia Suluhu Hassan to publicly disown it. Dangote then pivoted toward Mombasa and, subsequently, Lamu — citing superior port depth, larger fuel consumption, and a bigger economy as the deciding commercial factors.
TICGL's core reading: the diplomatic friction was the proximate trigger, but the underlying decision was shaped by structural investment-climate variables TICGL has tracked for years — a narrow tax base, a manufacturing sector stuck near 8% of GDP, a private sector crowded out by government borrowing, an FDI pipeline that converts pledges into disbursed capital at only 15-20%, and permitting/land-acquisition delays averaging 18-24 months.
This is not the end of the Tanzania–Dangote relationship. On 29 June 2026, President Samia met Aliko Dangote at State House in Dar es Salaam and secured commitment to a parallel investment pipeline — a 2,000 MW coal-fired power plant, a urea fertiliser complex, port development, a 40-km port-access road, and an 812-km Mtwara–Mbamba Bay transport corridor — alongside an open invitation for Tanzania to take an equity stake in the Lamu refinery itself. TICGL reads this as evidence that Tanzania remains commercially attractive, but converting interest into disbursed capital still depends on closing the systemic gaps set out below.
The Dangote refinery pivot to Lamu is a live example of the same policy gaps this TICGL report tracks. If Tanzania's tax base, land-permitting, private-capital and FDI-conversion constraints are not addressed, TICGL's Dira 2050 modelling indicates the country risks falling behind its own timetable for building a USD 1 trillion economy by 2050 — meaning fewer mega-projects like this one choose Tanzania, and the roughly 24 years remaining to that target close in faster than the reforms needed to reach it.
The $1 Trillion Milestone Is a 2058–2062 Story, Not 2050
At Tanzania's current real GDP growth rate of 5.9%, the $1 trillion milestone arrives around 2065. Closing the gap to 2050 requires a growth rate of 10.2% nominal per year — nearly double the current pace. This is not a failure of vision; it is a gap in execution. Five structural policy gaps — detailed in the full report — are the primary reasons Tanzania is on a 2058–2062 trajectory rather than a 2050 one. Closing even three of these gaps could advance the timeline by a decade.
1.1 Timeline — from the Nairobi announcement to the confirmed Lamu site.
23 APRIL 2026
At a Nairobi summit, Aliko Dangote pledges a 650,000 bpd East African refinery. Kenya's President Ruto publicly names Tanga, Tanzania as the site, citing the EACOP pipeline route — without prior sign-off from Dodoma.
LATE APRIL 2026
President Samia Suluhu Hassan clarifies her government had not approved a Tanga refinery plan, creating diplomatic friction between Dar es Salaam and Nairobi.
MAY 2026
Dangote pivots publicly toward Mombasa, citing greater port depth, higher domestic fuel consumption, and the larger Kenyan economy. Kenya's National Infrastructure Fund pledges co-investment, with roughly KSh 21.5 billion in seed capital earmarked.
MAY–JUNE 2026
Feasibility studies formally cover three candidate ports — Tanga, Mombasa and Lamu — with Lamu emerging as preferred, in part to serve South Sudan and Ethiopia via the LAPSSET corridor.
29 JUNE 2026
Dangote meets President Samia at State House, Dar es Salaam, confirming the refinery's move to Lamu while unveiling a parallel, non-refinery investment pipeline for Tanzania.
1–7 JULY 2026
Dangote Industries confirms the refinery's capacity at 700,000 bpd and discloses financing via internal cash flow, bonds and a planned IPO, with construction timelines of up to three years.
1.2 Why Kenya Won on Dangote's Own Stated Terms
Four factors recur consistently across reporting on the decision.
Factor Dangote cited
Kenya / Lamu advantage
Tanzania / Tanga position
Port depth & scale
Mombasa handles 45m+ tonnes/year, Africa's largest & deepest regional port
Comparatively shallower, smaller facility at Tanga
Kenya's National Infrastructure Fund pledged direct equity & de-risking (~KSh 21.5bn seed)
No equivalent co-investment vehicle activated in time
Corridor access
Lamu sits on LAPSSET, opening South Sudan & Ethiopia markets
Tanga cannot easily reach these markets
Pipeline proximity (EACOP)
Dangote stated crude can arrive by ship, reducing pipeline-terminus dependence
Assumed EACOP-hosting advantage did not materialise as decisive
Mombasa vs Tanga: Port Throughput Gap
Illustrative comparison of annual port cargo throughput cited as a deciding commercial factor (million tonnes/year).
1.3 The Emerging Tanzania Consolation Package
Rather than walking away, Dangote used the 29 June meeting to lay out a considerably broader pipeline of Tanzania-based investments than the group's existing USD 500 million, 3-million-tonne cement plant in Mtwara.
Component
Scale / detail
Coal-fired power plant
2,000 MW — a potentially transformative addition against Tanzania's current ~4,522 MW installed capacity
Urea fertiliser complex
Extends Dangote's African fertiliser strategy into a market still heavily import-dependent for fertiliser
Port development + access road
40-km concrete access road to relieve congestion around Tanzania's principal ports
Transport corridor
812-km Mtwara–Mbamba Bay corridor to move raw materials and finished goods more efficiently
Special economic zone
Proposed trade/economic zone tied to the pipeline
Lamu refinery equity stake
Open invitation for the Tanzanian government to acquire equity in the Lamu refinery itself
Not yet at financial close. President Samia has directed the Minister of Planning and Investment, Prof. Kitila Mkumbo, to coordinate technical negotiations. On TICGL's registration-to-disbursement framework, the conversion of this pipeline into disbursed capital — not the announcement itself — will be the true test of Tanzania's investment climate.
2. Systemic Investment-Climate Challenges — the TICGL Lens
TICGL's ongoing Dira 2050 policy-gap research and FDI registration-to-disbursement analysis identify recurring structural constraints that shape how large investors like Dangote evaluate Tanzania against regional peers.
2.1 A Narrow, Shallow Tax Base
Tanzania's tax-to-GDP ratio stands at approximately 13.1%, below the Sub-Saharan Africa average of roughly 16% and well short of the 18-20% associated with sustainable middle-income economies. Corporate income tax of approximately 30% sits above Kenya's 25% and Rwanda's 28%, while compliance remains time-intensive relative to regional peers. VAT refund arrears — estimated at TZS 1.4-1.5 trillion — further strain working capital for capital-intensive investors.
Tax-to-GDP Ratio: Tanzania vs Regional Benchmarks
Tanzania trails the Sub-Saharan Africa average and the 18-20% band typical of sustainable middle-income economies.
TICGL recommendation: broaden the base by formalising the informal economy rather than raising rates on existing formal taxpayers, alongside automation of tax administration.
2.2 An Industrialisation and Infrastructure Deficit
Manufacturing contributes only about 8.1% of GDP, against a 22-28% range typically associated with a USD 1 trillion-scale economy under Tanzania's Dira 2050 ambition. Installed power capacity of roughly 4,522 MW remains far below the 15,000 MW envisioned for 2050. In the specific case of the refinery, Tanga's comparatively shallow port and smaller throughput capacity versus Mombasa's scale was cited directly by Dangote as a deciding factor.
Manufacturing Share of GDP
Current vs the range required for Dira 2050's $1 trillion ambition
Installed Power Capacity (MW)
Current capacity vs the 2050 target
2.3 Private-Sector Crowding-Out
Government domestic borrowing continues to compete directly with private credit: treasury bills and bonds offer risk-free yields of 8-12%, discouraging commercial banks from lending to manufacturing and infrastructure SMEs. Private investment remains near 22% of GDP, short of the 30-35% TICGL estimates is required to sustain 8%+ growth. As of TICGL's most recent PPP tracking, no PPP project has yet reached financial close, even though a PPP policy framework exists on paper.
Private Investment as % of GDP: Actual vs Required
Tanzania's private investment share sits well below the 30-35% band needed to sustain 8%+ growth.
2.4 The FDI Registration-to-Disbursement Gap
Tanzania's highest-leverage, most actionable investment-climate constraint.
Tanzania's approved FDI pipeline has grown five-fold over a decade, from USD 2.1 billion (2015) to USD 10.95 billion (2025), yet the realisation rate — actual disbursed inflows divided by registered pledges — has fallen from roughly 73% in 2015 to an estimated 15% in 2025, the lowest point in an eleven-year series. The resulting annual disbursement gap has widened to approximately USD 9.3 billion.
Registered FDI Pipeline vs Actual Inflows (USD Billion)
The widening gap between what Tanzania approves and what actually gets disbursed, 2015-2025.
FDI Realisation Rate Trend
Share of registered/approved FDI pledges that convert into actual disbursed capital.
Indicator
Tanzania (2025)
Regional benchmark
Registered FDI pipeline
USD 10.95bn
Five-fold growth since 2015
Actual FDI inflows
~USD 1.66-1.72bn
Grew only ~8% in real terms since 2015
Realisation rate
~15%
Mature peer economies: 45-65%
Avg. investment approval time
~240 days
Rwanda: ~28 days; Kenya: ~90 days
World Bank B-READY score (2024)
52.1
Rwanda: 72.6; Kenya: 58.8; Ethiopia: 54.3
Six Structural Drivers of the Gap
Ranked by estimated share of the shortfall: land acquisition and title-deed issuance (≈28%, typically 18-24 months to complete); multi-agency regulatory approvals across an average of seven agencies (≈22%); foreign-exchange availability and repatriation uncertainty (≈18%); infrastructure gaps in power, roads and port connectivity (≈16%); scarcity of long-term local-currency project finance (≈10%); and residual investment-protection uncertainty (≈6%).
What Drives Tanzania's FDI Disbursement Gap?
Estimated share of the shortfall attributable to each structural driver.
TICGL note: a one percentage-point improvement in Tanzania's realisation rate on the current ~USD 11 billion registered base is estimated to be worth approximately USD 100-110 million in additional annual FDI inflows — meaning the conversion problem, not the attraction problem, is Tanzania's most actionable investment-climate lever.
2.5 Regional Benchmarking: Tanzania vs Kenya vs Rwanda vs Ethiopia
Kenya's absolute FDI stock is smaller than Tanzania's, but its realisation rate, approval speed and regulatory-quality score are all materially stronger.
Country
2024 Actual FDI (USD bn)
Est. realisation rate
Avg. approval time
B-READY score
Tanzania
1.72
~20%
~240 days
52.1
Kenya
0.70
~45%
~90 days
58.8
Ethiopia
3.90
~42%
~180 days
54.3
Rwanda
0.90
~68%
~28 days
72.6
Realisation Rate by Country
Share of registered FDI actually disbursed
Average Investment Approval Time
Days from application to approval
World Bank B-READY Score (2024)
Business Ready index — regulatory quality and ease of doing business benchmark.
Rwanda remains the regional gold standard, and TICGL continues to view it as the most directly transferable reform model for Tanzania given broadly similar economic structure and scale.
3. Reading the Dangote Decision Through the Gap Framework
The refinery decision was overdetermined: even absent the diplomatic misstep, Tanzania's land, permitting and private-capital constraints would have made Tanga a harder sell.
Dangote's stated reason
Underlying TICGL systemic gap
Mombasa's port is deeper and larger than Tanga
Infrastructure/industrialisation deficit — ports, power and logistics investment lagging Dira 2050 targets
Kenya has a bigger economy, higher fuel consumption
Smaller realised private-sector base; Tanzania's own private investment share of GDP (~22%) below the 30-35% needed for scale
Kenya offered public co-investment/de-risking via the National Infrastructure Fund
Tanzania's PPP framework exists on paper, but no project has yet reached financial close
Diplomatic friction over the Tanga announcement
Policy predictability and inter-governmental coordination — a governance-adjacent, not purely economic, factor
Feasibility/soil studies already advancing at Lamu
Tanzania's land-acquisition and title process (18-24 months) is the single largest driver (≈28%) of its FDI disbursement gap
TICGL's assessment is therefore that Tanzania should not treat the loss as a one-off political misunderstanding, but as confirmation of gaps already identified in its own research.
4. Policy Recommendations
What government and investors should each take away from the Dangote case.
For the Government of Tanzania
Fast-track the pre-titled industrial/SEZ land bank concept already under discussion at TISEZA, prioritising sites relevant to the Dangote power, fertiliser and port pipeline, to avoid replicating the 18-24 month land-acquisition delay that cost Tanzania the refinery.
Bring at least one Dangote-linked project (power plant, fertiliser complex, or port works) to genuine financial close within 12-18 months, as proof-of-concept for a functioning one-stop investment facilitation process.
Formalise a single-window, legally binding service-level approval process, replacing the current multi-agency sequence that accounts for an estimated 22% of Tanzania's FDI disbursement gap.
Broaden the tax base through informal-sector digitalisation and formalisation incentives rather than raising rates on existing formal taxpayers.
Pursue the offered equity stake in the Lamu refinery on commercially sound terms, to secure fuel-security benefits and stay embedded in East Africa's refined-products value chain.
For TICGL Clients and Investors
Treat land title and multi-agency permitting timelines as the primary bankability risk for large Tanzanian projects, and budget 18-24 months into feasibility schedules unless a pre-titled SEZ site is secured.
Where projects depend on foreign-exchange repatriation certainty, seek forward cover or structure financing to hedge against currently limited long-dated FX facilities.
Benchmark any Tanzania investment decision against Kenya and Rwanda on realisation rate and approval speed, not headline FDI totals alone.
Monitor the Dangote-Tanzania power, fertiliser, port and transport pipeline as a live test case: reaching financial close within 12-24 months would be a strong positive signal for Tanzania's investment climate trajectory.
5. Conclusion
Dangote's choice of Lamu over Tanga is, on the surface, a story about diplomacy and port depth. Beneath that surface, it is consistent with the systemic investment-climate gaps TICGL has documented across its Dira 2050 and FDI-disbursement research: a narrow tax base, an underweight manufacturing and power sector, a private sector still crowded out by government borrowing, and — most tellingly — a land-acquisition and permitting regime that takes many months longer to clear than regional peers.
Tanzania's fundamentals — natural resources, a large and youthful population, an EAC/SADC-bridging location, and continued reform momentum under President Samia Suluhu Hassan — remain genuinely strong, as evidenced by Dangote's parallel commitment to a multi-billion-dollar power, fertiliser, port and transport-corridor pipeline agreed just weeks after the refinery decision was finalised. Whether that pipeline becomes another entry in Tanzania's registration ledger or an actual disbursed, operating asset will depend on exactly the reforms — land banking, single-window approvals, FX certainty, and PPP financial close — that TICGL has been recommending across its research programme.
Muhtasari kwa Kiswahili
Uamuzi wa Dangote na Somo kwa Tanzania
1
Uamuzi: Kampuni ya Dangote imethibitisha kuwa kiwanda chake kikubwa cha kusafisha mafuta (mapipa 700,000 kwa siku, thamani ya Dola za Marekani bilioni 15-20) kitajengwa Lamu, Kenya, badala ya Tanga, Tanzania.
2
Chanzo cha uamuzi: Tatizo la kidiplomasia lilitokea baada ya Rais wa Kenya kutangaza Tanga kama eneo la mradi kabla ya Serikali ya Tanzania kuridhia rasmi, jambo lililomfanya Rais Samia Suluhu Hassan kulikanusha hadharani.
3
Sababu za kibiashara: Dangote alitaja kina kirefu cha bandari ya Mombasa, uchumi mkubwa wa Kenya, matumizi makubwa ya mafuta, na uwekezaji wa moja kwa moja wa Serikali ya Kenya kupitia Mfuko wake wa Miundombinu.
4
TICGL inaona zaidi: Nyuma ya sababu hizo, kuna mapengo ya kimfumo — msingi mdogo wa kodi (13.1% ya Pato la Taifa), sekta ya viwanda inayosalia karibu 8% tu ya uchumi, sekta binafsi inayozibwa na mikopo ya Serikali, na kiwango cha chini cha ubadilishaji wa ahadi za uwekezaji kuwa fedha halisi (karibu 15% mwaka 2025).
5
Fursa mpya: Tarehe 29 Juni 2026, Rais Samia alikutana na Aliko Dangote Ikulu na kupata ahadi ya mradi mbadala — kituo cha umeme cha megawati 2,000, kiwanda cha mbolea, uendelezaji wa bandari, barabara ya kilomita 40, na ukanda wa usafirishaji wa kilomita 812 kutoka Mtwara hadi Mbamba Bay — pamoja na fursa ya Tanzania kununua hisa katika kiwanda cha Lamu.
6
Mapendekezo ya TICGL: Serikali iharakishe upatikanaji wa ardhi na hati miliki, iunde mfumo wa kibali kimoja (single-window approval), na ihakikishe angalau mradi mmoja wa Dangote unafikia hatua ya fedha (financial close) ndani ya miezi 12-18 ijayo, ili kuonesha uwezekano wa Tanzania kuvutia na kutimiza uwekezaji mkubwa.
Related TICGL Research & Tools
This note sits within TICGL's broader Dira 2050 and FDI research programme. Explore the related analysis below.
Reuters/CNBC Africa, "Dangote to fund proposed Kenya refinery with cash, bonds and an IPO," 7 July 2026.
TICGL, "What's Next for Tanzania's Economy? The Policy Gaps Keeping $1 Trillion Out of Reach by 2050," June 2026.
TICGL, "Tanzania's FDI Registration-to-Disbursement Gap: Bridging the US$170 Billion Financing Chasm," April 2026.
The Citizen, "Getting to the bottom of the race for East Africa's $17 billion refinery," May 2026.
Business Daily Africa, "Kenya to buy stake in Dangote-fronted oil refinery," May 2026.
Tuko.co.ke, "Mombasa's Critical Role in Dangote's Mega Refinery Plan for East Africa," June 2026.
Kenyans.co.ke / Billionaires.Africa, "Dangote unveils power, fertiliser and port plans for Tanzania," 30 June 2026.
Nairobi Wire / Tribune Online, "Dangote's Kenya Refinery to Refine 700,000 Barrels Daily," 1-2 July 2026.
This research note is prepared by TICGL Research Division / Tanzania Economic Research Institute (TERI) for informational purposes and does not constitute investment advice.
