As of March 2025, Tanzania’s total external debt stood at USD 34.06 billion, with the central government accounting for 78.3% (USD 26.67 billion), reflecting the public sector’s dominant role in external borrowing. The private sector held USD 7.38 billion (21.7%), of which USD 1.28 billion represented interest arrears. Disbursed funds were largely directed toward transport and telecommunication (21.3%), budget and balance of payments support (20.6%), and social welfare and education (20.1%), highlighting the government’s investment in infrastructure and social sectors. In terms of currency composition, the debt stock was heavily denominated in US dollars (67.7%), followed by the Euro (16.7%) and Chinese Yuan (6.3%), exposing the country to significant exchange rate risk. These figures underscore Tanzania’s strategy of development-oriented borrowing, while also signaling the need for prudent foreign currency risk management.

1. External Debt Stock by Borrowers (March 2025)

Insight: Public sector dominates Tanzania’s external debt, with over three-quarters owed by the central government.

2. Disbursed Outstanding Debt by Use of Funds (March 2025)

Insight: The top three sectors—Transport & Telecom (21.3%), Social Welfare & Education (20.1%), and BoP/Budget Support (20.6%)—account for over 62% of debt usage, showing focus on infrastructure and public services.

3. Debt by Currency Composition (March 2025)

Insight: The US dollar continues to dominate, making up over two-thirds of external debt. This exposes the debt profile to USD exchange rate risk.

As of March 2025, Tanzania’s external debt totaled USD 34.06 billion, with the central government accounting for 78.3%. Debt usage was primarily focused on infrastructure, public services, and budget support. The portfolio is heavily denominated in USD (67.7%), signaling potential currency exposure risk that needs active management.

Key Insights:

1. Debt Is Primarily Public and Government-Controlled

• 78.3% of total external debt (USD 26.7 billion) is owed by the central government.
• The private sector holds only 21.7%, with some of it (USD 1.28 billion) in interest arrears.

This shows: Tanzania’s external debt is mainly public, which gives the government control over how funds are allocated and managed, but also increases fiscal responsibility and repayment risk for the state.

2. Debt Is Focused on Development Priorities

• The largest shares of disbursed debt were used for:
  • Transport & Telecom (21.3%)
  • Budget Support & BoP (20.6%)
  • Social Welfare & Education (20.1%)
  • Energy & Mining (13.5%)

This shows: Borrowed funds are being directed towards infrastructure, public services, and economic growth sectors, which are critical for long-term development.

3. High Exposure to the US Dollar

• 67.7% of the debt stock is denominated in USD, with only 16.7% in EUR and 6.3% in Chinese Yuan (CNY).

This shows: Tanzania is highly exposed to USD fluctuations, meaning if the US dollar strengthens, the cost of servicing the debt increases in local currency (TZS). This is a key exchange rate risk.

Conclusion

The data indicates that Tanzania’s external debt is heavily concentrated in the central government, used for productive sectors like infrastructure and social services. However, the large share in USD poses a currency risk, making it important for Tanzania to maintain foreign reserves and export earnings to cushion against global shocks.

As of February 2025, Tanzania’s external debt stock reached USD 31.31 billion, reflecting a monthly increase of USD 393.4 million (1.3%). The central government accounts for 79.7% of the total, highlighting its leading role in borrowing to fund infrastructure and social projects. Funds are mainly allocated to transport and telecommunications (21.6%), education and social welfare (16.3%), and energy and mining (13.7%). However, with 65.8% of the debt denominated in US dollars, the country remains exposed to exchange rate volatility, necessitating prudent fiscal and monetary management.

Tanzania’s debt development, Tanzania’s Monthly Economic Review – March 2025, focusing on external debt.

Tanzania Debt Development (as of February 2025)

1. Total External Debt Stock

• Total External Debt Stock (Public and Private):
  ➤ USD 31,312.8 million (USD 31.31 billion)
• Month-to-Month Change:
  ➤ An increase of USD 393.4 million (1.3%) compared to January 2025.
• Reason for Increase:
  ➤ Mainly due to new disbursements and exchange rate valuation effects.

2. External Debt Stock by Borrower

Key Insight:
The Central Government holds the majority share of external debt, nearly 80%, showing that debt is primarily used to finance public infrastructure and development projects.

3. Disbursed Outstanding Debt by User of Funds

Key Insight:
The largest portion of external debt is invested in transport, telecom, education, and energy, which are strategic sectors for long-term development.

4. Debt by Currency Composition

Key Insight:
The dominance of the US Dollar (nearly 66%) exposes Tanzania to foreign exchange risk if the dollar strengthens further. However, diversification into other currencies like the Euro, Yuan, and Yen offers some buffer.

Summary:

• Tanzania’s external debt stock reached USD 31.31 billion in February 2025.
• 79.7% of it is held by the central government.
• Major debt usage goes to transport, education, energy, and finance.
• USD remains the dominant currency (65.8%), increasing exposure to exchange rate movements.

Tanzania’s external debt development tells us:

What the Figures Tell Us

1. Heavy Reliance on External Financing
   With USD 31.31 billion in total external debt, Tanzania continues to rely significantly on foreign borrowing, especially from multilateral and bilateral sources, to fund its development agenda.
2. Government is the Main Borrower
   The central government holds nearly 80% of the external debt. This indicates that most of the borrowing is channeled into large-scale public projects like infrastructure, energy, and social services—reflecting the government's role in driving economic development.
3. Strategic Allocation of Debt
   A large share of disbursed debt is used in productive sectors:
   • Transport and telecom (21.6%)
   • Social welfare and education (16.3%)
   • Energy and mining (13.7%)
     This shows a development-oriented borrowing strategy, aiming to boost long-term economic productivity.
4. Vulnerability to Exchange Rate Risk
   Since 65.8% of the debt is denominated in US dollars, any strengthening of the dollar could raise the cost of debt servicing. This makes exchange rate management critical for debt sustainability.
5. Gradual but Steady Growth in Debt Stock
   The month-on-month increase of USD 393.4 million (1.3%) suggests a controlled growth in borrowing, possibly linked to disbursements for ongoing projects and valuation changes.

🧠 Bottom Line: Tanzania’s external debt is focused on development, government-driven, and largely USD-denominated, which helps fund national priorities but also requires careful debt and currency risk management to remain sustainable.

Tanzania's external debt reached USD 33.91 billion in January 2025, placing it among the top 10 most indebted African countries. This marks a significant rise from USD 2.47 billion in 2011, reflecting increased borrowing for infrastructure and economic development. The central government holds 77.4% of the debt, with USD 185.4 million paid for debt servicing in December 2024. Despite this, Tanzania’s debt-to-GDP ratio remains at 47.2%, below the IMF’s 55% risk threshold. However, careful debt management is crucial to ensure economic stability and sustainable growth.

​As of January 2025, Tanzania's external debt stood at approximately USD 33,905.10 million, a slight decrease from USD 34,075.50 million in December 2024. This positions Tanzania among the top ten African countries with substantial external debt.​

Historical Context: Over the years, Tanzania's external debt has exhibited significant growth:​

• December 2011: USD 2,469.70 million​
• December 2023: USD 29,541.7 million ​
• November 2024: USD 33,137.7 million ​
• December 2024: USD 34,075.50 million​
• January 2025: USD 33,905.10 million​

Composition of External Debt: The central government holds the majority of this debt, accounting for approximately 77.4% as of December 2024. The remaining portion is attributed to the private sector. ​

Debt Service and Disbursements: In December 2024, Tanzania received external loan disbursements totaling USD 376.8 million, primarily allocated to the central government. During the same period, the country serviced its external debt with payments amounting to USD 185.4 million, which included USD 111.2 million in principal repayments and USD 74.2 million in interest payments. ​

Public Debt Relative to GDP: As of November 2024, Tanzania's total public debt, encompassing both external and domestic obligations, was USD 38,243.5 million. This figure represents approximately 47.2% of the nation's Gross Domestic Product (GDP). ​

International Financial Support: In December 2024, the International Monetary Fund (IMF) completed a review under the Extended Credit Facility arrangement with Tanzania, resulting in an immediate disbursement of about USD 148.6 million. Additionally, the IMF approved a disbursement of approximately USD 55.9 million under the Resilience and Sustainability Facility, totaling USD 204.5 million in financial support. ​

These figures underscore Tanzania's significant external debt position within Africa, highlighting the importance of ongoing fiscal management and international financial collaborations.

Top ten African countries with high external debt based on 2025 data:

1. South Africa – USD 176,314 million (Sep 2024)
2. Egypt – USD 155,204 million (Sep 2024)
3. Tunisia – TND 128,856 million (Sep 2024)
4. Mauritius – MUR 96,713 million (Dec 2024)
5. Angola – USD 50,260 million (Dec 2023)
6. Nigeria – USD 42,900 million (Sep 2024)
7. Namibia – NAD 36,036 million (Jun 2024)
8. Tanzania – USD 33,905 million (Jan 2025)
9. Malawi – MWK 5,887,049 million (Dec 2023)
10. Burundi – BIF 1,873,263 million (Dec 2024)

Tanzania’s external debt and its position among African countries with significant debt levels:

1. Tanzania’s Debt Growth is Significant

• Tanzania's external debt has increased dramatically from USD 2.47 billion in 2011 to USD 33.91 billion in January 2025.
• This consistent rise reflects increased borrowing for infrastructure, public services, and economic projects but also raises concerns about debt sustainability.

2. Tanzania is Among Africa’s Top 10 Most Indebted Countries

• At USD 33.91 billion, Tanzania ranks 8th in Africa for external debt.
• While this debt level is high, it is still lower than economies like South Africa (USD 176.3B), Egypt (USD 155.2B), and Nigeria (USD 42.9B).

3. Most of Tanzania’s Debt is Public

• 77.4% of Tanzania’s external debt is held by the central government, meaning the government is the primary borrower.
• This suggests reliance on international loans for development, infrastructure, and fiscal needs.

4. Debt Servicing is a Major Challenge

• In December 2024, Tanzania borrowed USD 376.8M but also had to repay USD 185.4M (including interest payments).
• This means that a significant portion of revenues is spent on debt servicing, which could limit spending on public services.

5. IMF and International Financial Support Play a Key Role

• The IMF provided USD 204.5M in December 2024 to support Tanzania’s financial stability.
• This suggests Tanzania relies on international financial institutions to manage its debt obligations and sustain economic programs.

6. Tanzania’s Debt-to-GDP Ratio is Still Manageable

• Tanzania’s total public debt (domestic + external) was USD 38.24 billion, accounting for 47.2% of GDP in November 2024.
• While below the IMF’s 55% risk threshold, continued borrowing without sufficient economic growth could lead to debt distress.

7. Comparison with Other African Countries

• South Africa and Egypt have the highest external debts, but their economies are larger and more diversified.
• Nigeria has slightly higher debt than Tanzania, but its economy benefits from oil revenues.
• Tanzania’s debt is higher than Malawi, Burundi, and Namibia, suggesting it is borrowing at a faster rate.

Final Conclusion

Tanzania's rising external debt reflects ambitious economic growth plans but also poses risks of debt distress if borrowing continues at this rate without sufficient revenue growth. Proper debt management, economic diversification, and increased exports are crucial to ensuring sustainability.