What was Tanzania's national debt stock at the end of June 2026?

Tanzania's national debt stock stood at USD 50,595.8 million at the end of June 2026, of which 70.4 percent (USD 35,606.1 million) was external debt and the remainder was domestic debt, according to the Bank of Tanzania Monthly Economic Review, July 2026.

Who holds most of Tanzania's external debt?

The central government held 83.1 percent of Tanzania's external debt stock at the end of June 2026 (USD 29,606.0 million), with the private sector holding the remaining 16.9 percent (USD 6,000.1 million).

What currency is most of Tanzania's external debt denominated in?

The US Dollar dominates Tanzania's external debt currency composition at 66.2 percent, followed by the Euro at 17.4 percent, the Chinese Yuan at 6.7 percent, and other currencies at 9.8 percent, as of June 2026.

What has Tanzania's external debt mainly financed?

By use of funds, Tanzania's disbursed outstanding external debt as of June 2026 was concentrated in Balance of Payments and budget support (22.1 percent), transport and telecommunication (22.0 percent), social welfare and education (19.5 percent), and energy and mining (12.8 percent).

Who are the largest creditors of Tanzania's government domestic debt?

As at June 2026, commercial banks were Tanzania's largest domestic government creditor, holding 28.8 percent (TZS 11,320.8 billion) of domestic debt, followed by pension funds at 26.4 percent (TZS 10,399.0 billion), the Bank of Tanzania at 18.3 percent (TZS 7,197.1 billion), other holders (public institutions, private companies, individuals and non-residents) at 19.2 percent, insurance companies at 5.1 percent, and BOT's special funds at 2.1 percent.

What was Tanzania's government domestic debt stock in June 2026?

Tanzania's government domestic debt stock (excluding liquidity papers) stood at TZS 39,325.8 billion at the end of June 2026, up marginally from TZS 39,257.3 billion in May 2026, according to the Bank of Tanzania Monthly Economic Review, July 2026.

What instruments make up Tanzania's domestic debt?

Government securities made up 84.7 percent of domestic debt in June 2026, dominated by Government bonds at 79.9 percent, with Treasury bills at 4.5 percent. The remaining 15.3 percent was non-securitized debt, almost entirely the overdraft facility with the Bank of Tanzania.

How has Tanzania's domestic debt stock grown since 2018?

Tanzania's government domestic debt stock grew from TZS 13,228.2 billion in June 2018 to TZS 39,325.8 billion in June 2026, roughly tripling over eight years, according to Ministry of Finance data published in the Bank of Tanzania Monthly Economic Review, July 2026.

What is the largest category of Tanzania's services export receipts?

Travel (tourism) is the largest category of Tanzania's services export receipts, contributing USD 4,405.5 million in the year ending June 2026, out of total services receipts of USD 8,140.9 million, supported by an 18.9 percent rise in tourist arrivals.

Why did Tanzania's services payments increase in 2026?

Tanzania's services payments rose 6.7 percent to USD 3,375.3 million in the year ending June 2026, mainly due to higher freight payments linked to elevated global shipping costs, continued disruptions to maritime transport, and higher merchandise import volumes.

How much foreign exchange reserves did Tanzania hold at the end of June 2026?

Tanzania's gross official foreign exchange reserves stood at USD 5,673.5 million at the end of June 2026, equivalent to 4.4 months of projected imports of goods and services, above the four-month national benchmark.

What was Tanzania's headline inflation rate in June 2026?

Headline inflation eased to 4.0 percent in June 2026 from 4.2 percent in May 2026, remaining within the national target range of 3 to 5 percent, though higher than the 3.3 percent recorded a year earlier.

Is the Tanzanian shilling responsible for rising inflation?

Not primarily. The shilling depreciated by only 0.08 percent year-on-year to June 2026, so exchange-rate pass-through played a limited role. The main driver of the recent inflation uptick, especially energy and core inflation, was the global oil price shock linked to the Middle East conflict, which raised import costs largely independent of currency movements.

Why did transport inflation reach 13.6 percent in Tanzania?

Transport inflation surged to 13.6 percent year-on-year in June 2026, up from 1.6 percent a year earlier, primarily due to elevated global crude oil prices amid the Middle East conflict, which pushed domestic retail pump prices for petrol, diesel and kerosene sharply higher.

Why did the Bank of Tanzania raise the Central Bank Rate to 6.25 percent?

The Monetary Policy Committee raised the Central Bank Rate from 5.75 percent to 6.25 percent effective 2 July 2026 after core inflation rose from 2.2 percent in March to 3.7 percent in June 2026, signalling that the global supply shock was spreading into second-round inflation effects across the wider economy.

What is core inflation and why is it rising in Tanzania?

Core inflation excludes volatile unprocessed food and energy prices and measures underlying price pressure. It rose to 3.7 percent in June 2026, its highest level in two years, driven by higher transportation, personal care and social protection service prices, and became the largest single contributor to headline inflation at 2.7 percentage points.

How much did the Tanzanian shilling depreciate in the year to June 2026?

The shilling depreciated by only 0.08 percent on an annual basis in the year to June 2026, down from 0.21 percent depreciation in the year to June 2025, making it one of the more stable currencies in the region over the period.

What share of Tanzania's external debt is in US dollars?

As of June 2026, 66.2 percent of Tanzania's disbursed outstanding external debt was denominated in United States dollars, followed by the Euro at 17.4 percent, Chinese Yuan at 6.7 percent, and other currencies at 9.8 percent.

What is Tanzania's national debt stock in 2026?

Tanzania's national debt stock (external plus domestic) stood at USD 50,595.8 million at the end of June 2026, of which 70.4 percent was external debt and 29.6 percent domestic debt.

How many months of import cover do Tanzania's foreign reserves provide?

Gross official foreign exchange reserves of USD 5,673.5 million at end-June 2026 were sufficient to cover 4.4 months of projected imports of goods and services, exceeding the national benchmark of four months but with limited headroom.

Why is Tanzania relying more on domestic borrowing?

Domestic debt grew 10.8 percent year-on-year to June 2026 versus 2.4 percent growth in external debt, reflecting a deliberate shift that reduces exchange-rate risk on new borrowing but raises domestic Treasury yields and competes with private-sector credit demand.

#TanzaniaInvestment - TICGL | Tanzania Investment and Consultant Group Ltd

Disclaimer & scope

This note is prepared by TERI for research and strategic-information purposes only. It does not constitute investment, legal, tax or financial advice, and it does not state the position of the Government of Tanzania or TISEZA. All Q4 2025/26 and Q4 2024/25 figures for the General Investment Scheme and the EPZ/SEZ schemes are drawn directly from TISEZA's own Quarterly Investment Bulletin (April–June 2026); combined totals, ratios and averages are TICGL/TERI's own calculations from those published figures. Regional and global comparator figures use UNCTAD's annual, balance-of-payments FDI series, which is methodologically different from TISEZA's quarterly registered-capital series and is shown for context, not for direct like-for-like comparison.

01 — OverviewExecutive Summary

A single number is doing a lot of work in Tanzania's investment conversation this quarter: Foreign Direct Investment (FDI) registered under the General Investment Scheme (GIS) — the scheme most people simply call the "General Scheme" — fell 58.4% between Q4 2024/25 (April–June 2025) and Q4 2025/26 (April–June 2026), from USD 2,538.86 million to USD 1,055.47 million. Total GIS investment, FDI and Domestic Investment (DI) combined, fell 41.6%, from USD 3,220.33 million to USD 1,880.05 million.

Two things sit alongside that headline and change how it should be read. First, DI within the GIS rose 21.0% over the same period, from USD 681.47 million to USD 824.58 million, and now accounts for close to 44% of GIS capital, up from about 21% a year earlier. Second, capital registered under Tanzania's EPZ and SEZ schemes — reported separately by TISEZA — rose from USD 115.16 million to USD 3,378.5 million, an increase of roughly 29 times, driven substantially by a small number of very large agriculture and forestry projects.

The central claim

A 58.4% fall in one scheme's FDI line is a real number and deserves a real explanation — this report ranks five candidate explanations against the evidence TISEZA itself publishes. But it is not, on its own, evidence that Tanzania's investment climate deteriorated. When General Scheme and EPZ/SEZ capital are added together, total investment registered by TISEZA rose by roughly 57.7% year-on-year. The more accurate description of Q4 2025/26 is reallocation, not retreat.

This note works from TISEZA's Quarterly Investment Bulletin for April–June 2026 (Section Four: Investment Performance), cross-checked against UNCTAD's regional and global FDI series and contemporaneous reporting on Tanzania's October 2025 general election, to give TICGL/TERI's reading of what is — and is not — happening to foreign investment in Tanzania.

1. What Actually Happened in Q4 2025/26

A scheme-level FDI drop, not an economy-wide one

1.1 FDI vs. Domestic Investment, General Investment Scheme

TISEZA's comparison of approved investment capital between Q4 2025/26 and the corresponding quarter of FY2024/25 shows total GIS investment falling from USD 3,220.33 million to USD 1,880.05 million, a decrease of 41.6%. This decline was driven almost entirely by FDI, which fell 58.4%, from USD 2,538.86 million to USD 1,055.47 million. DI moved the opposite direction, rising 21.0% to USD 824.58 million. The practical effect: DI's share of GIS capital nearly doubled, from roughly 21% to roughly 44%, in a single year.

Indicator (General Investment Scheme)	Q4 2024/25	Q4 2025/26	Change
Total approved capital	$3,220.33M	$1,880.05M	−41.6%
FDI	$2,538.86M	$1,055.47M	−58.4%
Domestic Investment (DI)	$681.47M	$824.58M	+21.0%
FDI share of GIS capital	≈78.8%	≈56.1%	−22.7 pts
DI share of GIS capital	≈21.2%	≈43.9%	+22.7 pts
Registered projects	250	243	−2.8%
Average capital per project	≈$12.88M	≈$7.74M	≈−40%

General Investment Scheme: FDI vs. Domestic Investment

USD Million, TISEZA registered capital

The number underneath the number

Project count barely moved — down just 2.8%, from 250 to 243. What moved was deal size: average capital per project fell from roughly USD 12.9 million to roughly USD 7.7 million. Tanzania is not seeing meaningfully fewer investors register projects in the General Scheme; it is seeing a much smaller number of exceptionally large projects than it saw a year earlier.

1.2 Where the capital went: registered investment by sector

Manufacturing remained the leading destination in Q4 2025/26, with 139 projects, USD 764.07 million in capital and 17,875 projected jobs. The commercial building, construction and economic infrastructure group ranked second (13 projects, USD 387.22 million, 7,343 jobs), followed by tourism (23 projects, USD 361.36 million, 2,397 jobs — about 90.6% of it foreign-financed) and agriculture (23 projects, USD 69.27 million). Transportation, services, energy, and mining and petroleum made up the remainder.

Sector (GIS, Q4 2025/26)	Projects	Capital	Jobs
Manufacturing	139	$764.07M	17,875
Commercial Building / Construction / Econ. Infrastructure	13	$387.22M	7,343
Tourism	23	$361.36M	2,397
Agriculture	23	$69.27M	n/a in bulletin narrative
Transportation, Services, Energy, Mining & Petroleum (combined)	45	≈$298.13M	≈6,190*
Total, General Investment Scheme	243	$1,880.05M	33,805

*Residual sectors' project count, capital and jobs are TICGL/TERI calculations (total minus the four named sectors above); the bulletin does not break these out individually in its narrative text. A separate ownership-source view in the same bulletin (Section 4.5.1.2) splits infrastructure and commercial-building capital slightly differently (Economic Infrastructure $215.19M; Commercial Building/Construction $154.63M, entirely local-financed) — both views are TISEZA's own, shown here as published.

General Investment Scheme Capital by Sector, Q4 2025/26

USD Million

1.3 Ownership structure and regional distribution

Foreign-majority projects fell from 130 to 124, joint ventures fell from 50 to 46, while locally-owned projects rose from 70 to 73 — a small but consistent shift toward local ownership across all three categories. Regionally, Dar es Salaam (77 projects, USD 946.41 million, 11,243 jobs) and Pwani (54 projects, USD 264.18 million, 10,694 jobs) together accounted for more than half of all registered GIS projects and the large majority of GIS capital in the quarter, followed by Arusha, Mwanza, Geita, Dodoma and Morogoro.

Eleven expansion projects

Alongside new registrations, TISEZA recorded 11 expansion projects by existing investors during the quarter, worth a combined USD 380.79 million and projected to create 1,780 jobs — a signal that at least some already-established investors are deepening their Tanzania exposure even as new large-ticket FDI registrations slowed.

02 — DiagnosisFive Possible Explanations, Ranked

TICGL/TERI ranks five candidate explanations for the General Scheme FDI decline by how well each is supported by the bulletin's own data and by outside evidence, not by any single confirmed cause. As with most quarter-on-quarter shifts in investment data, more than one factor is very likely at work simultaneously.

Likelihood: Very High

Base effect — one-off large projects registered a year earlier

Q4 2024/25's USD 2.54 billion in GIS FDI was most likely lifted by a small number of unusually large infrastructure or energy projects registering in that specific quarter; Q4 2025/26 shows no comparable "mega project" cohort in the General Scheme. This is the explanation best supported by TISEZA's own numbers: project count fell only 2.8% while average capital per project fell by roughly 40%, meaning the drop is concentrated in deal size, not in the number of investors coming forward.

Likelihood: High

Global capital is becoming more selective

UNCTAD's most recent Global Investment Trends data shows global FDI flows rising in 2025, but almost entirely toward developed economies (+43%) while flows to developing economies declined (−2%) and became more concentrated in a limited number of host economies and in capital- and technology-intensive sectors. Higher-for-longer global interest rates and continued geopolitical uncertainty are part of the same story. Tanzania is competing for a shrinking, more selective slice of global FDI aimed at developing markets generally — not losing ground because of anything specific to the General Scheme.

Likelihood: Moderate–High

Domestic crowding-in

DI within the GIS rose 21.0% in the same quarter that FDI fell 58.4%. This is not automatically a bad sign — a rising DI share (from ≈21% to ≈44% of GIS capital) can reflect growing confidence among Tanzanian investors and a genuine broadening of the domestic capital base, which several TICGL/TERI reports have flagged as a longstanding structural need. It does mean, however, that at least part of the "FDI gap" this quarter has been filled by local capital rather than replaced.

Likelihood: Moderate

Election / political-cycle effect

Tanzania held its general election on 29 October 2025 — inside the twelve months separating the two quarters compared in this bulletin. International investment-risk commentary published in the following months flagged a period of heightened political tension and social unrest around the vote, and noted that this combination of factors typically increases short-term caution among internationally mobile capital, even where a country's underlying economic fundamentals are largely unaffected. Election-adjacent dips in FDI registration are a documented, recurring pattern across emerging markets generally, and are typically followed by normalisation once the political calendar clears. TICGL/TERI treats this as a real but partial contributor rather than the primary explanation, particularly since DI — which is far more sensitive to purely domestic political sentiment — rose rather than fell over the same period.

Likelihood: Moderate

Rising competition from neighbouring countries

On UNCTAD's 2024 annual figures (the latest full comparable year), Ethiopia (USD 3.98bn) and Uganda (USD 3.31bn) both attracted substantially more FDI than Tanzania (USD 1.72bn), and East Africa's 2025 regional total rose 12% with growth led by Ethiopia and Uganda specifically. Kenya, meanwhile, posted its strongest-ever FDI year in 2025 on the strength of digital-economy investment. Some internationally mobile capital that might otherwise have flowed to Tanzania's General Scheme in Q4 2025/26 may simply have been directed toward these more aggressively promoted regional destinations instead — though Tanzania's own FDI growth rate has, in other recent years, outpaced the regional average, so this is best read as a contributing rather than a decisive factor. See Section 4 for the full comparison.

TICGL/TERI's reading

The evidence most strongly favours explanations 1 and 2 acting together: a high statistical base from a small number of large projects a year ago, combined with a genuinely more selective global FDI environment for developing economies broadly. Explanations 3, 4 and 5 are real and worth monitoring, but none of them alone is large enough to explain a 58.4% single-quarter move in a series this volatile.

3. The Fuller Picture: EPZ/SEZ Capital Rose Nearly 30-Fold

Reallocation, not retreat

TISEZA reports EPZ and SEZ scheme investment separately from the General Scheme. In Q4 2025/26, the Authority registered 7 EPZ/SEZ projects worth USD 3,378.5 million, projected to create 30,235 jobs and generate USD 517.8 million in turnover — up from USD 115.16 million in capital, 1,155 jobs and USD 73.15 million in turnover in Q4 2024/25. Ownership of the seven Q4 2025/26 projects comprised four foreign-owned, two locally-owned and one joint venture.

EPZ/SEZ indicator	Q4 2024/25	Q4 2025/26	Change
Capital	$115.16M	$3,378.5M	≈+2,834%
Jobs	1,155	30,235	≈+2,518%
Turnover	$73.15M	$517.8M	≈+608%
FDI within EPZ/SEZ	$97.62M	$3,147.8M	≈+3,124%
DI within EPZ/SEZ	$38.04M	$230.7M	≈+506%

Source: TISEZA, Quarterly Investment Bulletin, April–June 2026, Section 4.6. Percentage changes rounded; base-period values are small, so percentage changes should be read alongside the absolute figures.

One region, and effectively one source country, drove most of it

Ruvuma Region alone accounted for USD 2,600 million of the USD 3,378.5 million in EPZ/SEZ capital (about 77%) and 18,050 of the 30,235 projected jobs (about 60%), concentrated in a single large agriculture project. China was overwhelmingly the leading FDI source within EPZ/SEZ, contributing USD 3,143.8 million in capital and 19,027 of the scheme's jobs — Kenya and the UAE followed a distant second and third. This is close to a textbook example of the "one-off large project" pattern flagged as explanation #1 above, just operating in the EPZ/SEZ scheme rather than the General Scheme.

3.1 The combined picture

Adding General Scheme capital to EPZ/SEZ capital gives the clearest single measure of TISEZA's total quarterly investment performance. On that combined basis, total registered capital rose from approximately USD 3,335.49 million in Q4 2024/25 to approximately USD 5,258.55 million in Q4 2025/26 — an increase of roughly 57.7%.

General Scheme vs. EPZ/SEZ vs. Combined Total

USD Million, capital registered by TISEZA

Why this matters for how the 58.4% figure should be read

A single scheme's FDI line falling 58.4% is a genuine, worthwhile signal — it should prompt exactly the kind of diagnostic exercise this report carries out. But treated in isolation, it overstates the story. Capital did not leave Tanzania; a large share of it appears to have shifted toward the EPZ/SEZ schemes, which the Government has been actively building out — including the launch of Special Economic Zones on 12 August 2025 and the allocation of more than 40 land parcels across the Bagamoyo, Ruvuma, Kwala and Nala SEZs — precisely because these zones offer stronger incentive packages, serviced land and streamlined regulatory processes than the General Scheme.

04 — ContextRegional and Global Context

Tanzania's quarter did not happen in isolation. Two broader trends help calibrate how much of the General Scheme's FDI drop is Tanzania-specific versus part of a wider pattern affecting developing economies and East Africa as a region.

4.1 East Africa: a more competitive field

On UNCTAD's 2024 annual FDI figures — the latest full comparable year across the region — Ethiopia led East Africa with USD 3.98 billion (+21.9% year-on-year), followed by Uganda at USD 3.31 billion (+10.4%), Tanzania at USD 1.72 billion (+28.3%, the fastest growth rate in the group that year), Kenya at USD 1.50 billion (roughly flat), Rwanda at USD 819 million (+14.4%) and Somalia at USD 765 million (+13%). East Africa's regional FDI total rose 12% in 2025 to roughly USD 15 billion, with growth concentrated in Ethiopia and Uganda; Kenya separately reported its strongest-ever FDI year in 2025, driven by digital-economy and renewable-energy investment.

East African FDI Inflows, UNCTAD Annual Basis (2024, latest comparable year)

USD Million — balance-of-payments basis, not directly comparable to TISEZA's quarterly registered-capital figures above

Reading this chart correctly

These are UNCTAD's annual, balance-of-payments FDI figures for calendar 2024 — a different measure, on a different basis and timeframe, from the TISEZA quarterly registered-capital figures used throughout the rest of this report. They are shown to illustrate relative scale and regional competitive positioning, not as a direct comparison to the 58.4% General Scheme figure.

4.2 A more selective global environment

UNCTAD's Global Investment Trends Monitor for 2025 recorded a 14% rise in global FDI to an estimated USD 1.6 trillion — but more than USD 140 billion of that increase came from flows through global financial conduit economies rather than new productive investment, and flows to developed economies rose 43% while flows to developing economies declined 2%. Greenfield project announcements — the category most relevant to a scheme like Tanzania's General Scheme — fell 16% globally despite high headline values driven by a small number of megaprojects, and international project finance declined for a fourth consecutive year. This is the global backdrop explanation #2 in Section 2 draws on: developing economies broadly are seeing a smaller, more concentrated share of global capital, independent of anything specific to Tanzania.

4.3 Tanzania's institutional response

The same bulletin that reports the General Scheme's FDI decline also documents active institutional expansion: the formal launch of Special Economic Zones on 12 August 2025; more than 40 land parcels allocated across the Bagamoyo (≈524.89 hectares, 5 projects), Ruvuma (≈375.59 hectares), Kwala (≈3.20 hectares) and Nala (≈2.02 hectares) SEZs; continued implementation of the MKUMBI II regulatory-reform blueprint; a National Investment Database System that has already captured over 1,000 projects; and One-Stop Facilitation Centre services that processed 1,275 work permits and 2,702 residence permits during the quarter. None of this offsets the General Scheme FDI number directly, but it is the institutional context in which that number sits.

05 — ImplicationsWhat This Means

For different audiences, the same set of numbers points to different, practical takeaways.

1For policymakers

Treat the General Scheme FDI figure as a genuine signal worth investigating quarter-by-quarter, not a one-off to dismiss — but publish the combined GIS + EPZ/SEZ figure alongside it so the headline is not read in isolation.
Continue building the EPZ/SEZ pipeline deliberately, since it is now attracting the scale of FDI the General Scheme used to.
Monitor project-size concentration risk: a handful of very large projects (Ruvuma, China-linked) now account for the majority of new-scheme capital growth.

2For investors and market entrants

Manufacturing, tourism and infrastructure remain the deepest, most active General Scheme sectors by project count and capital in Q4 2025/26.
EPZ/SEZ zones (Bagamoyo, Ruvuma, Kwala, Nala) now offer materially larger co-investment and supply-chain opportunities than a year ago, particularly around the large anchor projects already registered there.
Rising DI (+21%) signals growing local co-investment appetite — a relevant consideration for structuring joint ventures.

3For researchers and analysts

Any year-on-year FDI comparison for Tanzania should specify which TISEZA scheme it refers to — General Scheme and EPZ/SEZ moved in opposite directions by an order of magnitude this quarter.
Project-count and average-deal-size data are as informative as the headline capital figure for diagnosing whether a decline reflects fewer investors or fewer mega-projects.

4For the wider public conversation

"FDI fell 58.4%" and "Tanzania attracted more total investment than a year ago" are both accurate statements about the same quarter — they describe different schemes and different aggregation levels, not contradictory realities.

"A single scheme's FDI line falling 58.4% deserves a real explanation, not a shrug — and this report has tried to give it one. But the more complete picture for Q4 2025/26 is not an investor retreat from Tanzania. It is a reallocation: fewer mega-projects landing in the General Scheme against an unusually high base, a genuinely more selective global FDI environment for developing economies, and a rapidly scaling EPZ/SEZ programme absorbing exactly the kind of large-ticket foreign capital the General Scheme lost. Read the two schemes together, and total investment registered by TISEZA this quarter rose by more than half."

— TICGL / Tanzania Economic Research Institute (TERI)

06 — SourcesMethod & Source Note

Basis

All Q4 2025/26 and Q4 2024/25 figures for the General Investment Scheme and the EPZ/SEZ schemes are drawn from the Tanzania Investment & Special Economic Zones Authority (TISEZA), Quarterly Investment Bulletin, April–June 2026 (Section Four: Investment Performance). Combined totals, percentage-point shares, average-deal-size and multi-year growth-rate calculations are TICGL/TERI's own, computed from those published figures. Regional and global comparator data draw on UNCTAD's World Investment Report 2025 and Global Investment Trends Monitor #50 (January 2026), together with contemporaneous reporting on Tanzania's October 2025 general election and its investment-climate implications.

The full TISEZA Quarterly Investment Bulletin, including regional maps, sectoral detail and investment-promotion activity for the quarter, is available on request; see below.

📨

Request TICGL/TERI's Full Investment Climate Briefing

This page summarises TICGL/TERI's reading of TISEZA's Q4 2025/26 Quarterly Investment Bulletin. Institutions, investors and development partners may request a fuller briefing — including sector-by-sector detail, regional maps and investment-promotion activity for the quarter — directly from TERI.

✉️ Request via economist@ticgl.com →

07 — Quick AnswersFrequently Asked Questions

Why did FDI in Tanzania's General Investment Scheme fall 58.4% in Q4 2025/26?

TISEZA's Quarterly Investment Bulletin shows FDI in the General Investment Scheme fell from USD 2,538.86 million in Q4 2024/25 to USD 1,055.47 million in Q4 2025/26, a 58.4% drop. TICGL/TERI ranks five contributing factors: a high base from one-off large projects registered a year earlier, more selective global capital allocation, domestic crowding-in, the 29 October 2025 election cycle, and rising regional competition for FDI. Project-count data show the number of projects fell only marginally while average deal size roughly halved, pointing most strongly to the base-effect explanation.

Did Domestic Investment also fall in Q4 2025/26?

No. Domestic Investment (DI) in the General Investment Scheme rose 21.0%, from USD 681.47 million to USD 824.58 million, and its share of GIS capital nearly doubled, from about 21% to about 44%.

Is Tanzania's total investment actually falling?

Not when both TISEZA schemes are combined. General Scheme plus EPZ/SEZ capital rose from about USD 3.34 billion to about USD 5.26 billion — an increase of roughly 58%. EPZ/SEZ capital alone rose from USD 115.16 million to USD 3,378.5 million, driven substantially by large agriculture and forestry projects concentrated in Ruvuma Region. TICGL/TERI reads this as a reallocation of capital, not an overall retreat.

What role did Tanzania's October 2025 general election play?

Tanzania held its general election on 29 October 2025, inside the period this bulletin compares. International investment-risk commentary flagged heightened political tension around the vote as a factor that typically increases short-term investor caution. TICGL/TERI ranks this as a moderate-likelihood contributor alongside four others, not the primary explanation.

How does Tanzania's FDI compare with its East African neighbours?

On UNCTAD's 2024 annual figures, Ethiopia led with USD 3.98 billion, followed by Uganda (USD 3.31bn), Tanzania (USD 1.72bn), Kenya (USD 1.50bn), Rwanda (USD 819M) and Somalia (USD 765M). Tanzania's 28.3% growth that year was the fastest in the group. Globally, 2025 FDI flows to developing economies declined 2% while flows to developed economies rose 43% — relevant context for any single quarter's dip.

Muhtasari

Muhtasari kwa Kiswahili

Kwa Nini FDI Ilishuka kwa 58.4% kwenye General Scheme? Uchambuzi wa Robo ya Nne 2025/26. — Uwekezaji wa moja kwa moja kutoka nje (FDI) kwenye Mpango Mkuu wa Uwekezaji (General Investment Scheme) ulishuka kutoka Dola za Marekani bilioni 2.54 (Robo ya Nne 2024/25) hadi Dola bilioni 1.06 (Robo ya Nne 2025/26) — punguzo la asilimia 58.4, kulingana na Ripoti ya Robo ya Uwekezaji ya TISEZA.

Lakini si sehemu nzima ya taswira: Uwekezaji wa ndani (DI) kwenye General Scheme uliongezeka kwa asilimia 21.0 (kutoka Dola milioni 681.5 hadi milioni 824.6), na mtaji uliosajiliwa kwenye mipango ya EPZ/SEZ uliongezeka mara karibu 30 (kutoka Dola milioni 115.2 hadi Dola milioni 3,378.5), hasa kutokana na miradi mikubwa ya kilimo na misitu, hususan mkoani Ruvuma inayohusishwa na uwekezaji kutoka China. Idadi ya miradi kwenye General Scheme haikushuka sana (kutoka 250 hadi 243) — kilichoshuka ni ukubwa wa wastani wa mradi mmoja mmoja, ambao ulipungua kwa karibu nusu.

Sababu tano zinazowezekana (kwa mpangilio wa uwezekano): (1) Base effect — miradi mikubwa ya mwaka jana isiyo na mfano mwaka huu (uwezekano: juu sana); (2) Mtaji wa dunia kuwa selective zaidi kuelekea nchi zilizoendelea (UNCTAD inaonesha FDI kwa nchi zinazoendelea ilishuka asilimia 2 mwaka 2025 wakati za nchi zilizoendelea ziliongezeka asilimia 43) (uwezekano: juu); (3) Domestic crowding-in — DI imeongezeka (uwezekano: wastani-juu); (4) Kipindi cha Uchaguzi Mkuu wa Oktoba 29, 2025 (uwezekano: wastani); (5) Ushindani kutoka nchi jirani kama Ethiopia na Uganda ambazo zilivutia FDI kubwa zaidi mwaka 2024 (uwezekano: wastani).

Taswira kamili: Ukijumlisha General Scheme na EPZ/SEZ, jumla ya mtaji uliosajiliwa na TISEZA uliongezeka kutoka Dola bilioni 3.34 hadi Dola bilioni 5.26 — ongezeko la takriban asilimia 57.7. Kwa hiyo, hata FDI ikishuka kwenye General Scheme, siyo dalili ya jumla ya uwekezaji kupungua Tanzania — ni reallocation ya mtaji kuelekea maeneo yenye vivutio bora zaidi.

FDI, General Scheme: –58.4% (Dola bilioni 2.54 → 1.06)
DI, General Scheme: +21.0% (Dola milioni 681.5 → 824.6)
Mtaji wa EPZ/SEZ: +2,834% (Dola milioni 115.2 → 3,378.5)
Jumla (General Scheme + EPZ/SEZ): +57.7% (Dola bilioni 3.34 → 5.26)

Chanzo: TISEZA, Ripoti ya Robo ya Uwekezaji, Aprili–Juni 2026; UNCTAD. Uchambuzi kamili unapatikana kwa ombi: economist@ticgl.com.

Disclaimer & scope

This report is prepared by TERI for research and strategic-information purposes only. It does not constitute investment, legal, tax or financial advice, and it does not state the position of the Government of Tanzania or TISEZA. All figures are drawn directly from TISEZA's Quarterly Investment Bulletin (April–June 2026) and have been cross-checked against the bulletin's own tables for internal consistency; where the bulletin's sector classification appears to sit uneasily against its own named project profiles, this is flagged explicitly rather than reconciled on TICGL/TERI's behalf.

01 — OverviewExecutive Summary

Tanzania's Export Processing Zones and Special Economic Zones (EPZ/SEZ) scheme had its strongest quarter on record in Q4 2025/26. Seven projects were registered, worth US$3,378.5 million in capital and US$517.8 million in projected turnover, together expected to create 30,235 jobs — up from US$115.16 million in capital, US$73.15 million in turnover, and just 1,155 jobs in the same quarter a year earlier. This is a genuine investment story, and it sits inside a broader national picture: TISEZA registered 250 new investment projects economy-wide in the quarter, bringing the cumulative total to 934 projects valued at USD 8.8 billion with the potential to create over 253,512 jobs.

Within the EPZ/SEZ scheme specifically, the boom is unusually concentrated on two axes at once. By country, China supplied US$3,143.8 million of the US$3,378.5 million in capital (93.1%) and 19,027 of the 30,235 jobs (62.9%) — Kenya and the United Arab Emirates, the next two largest sources, together contributed barely US$4 million. By sector, Agriculture and Forestry together account for six of the seven projects, US$3,328.5 million of the capital (98.5%), and 29,235 of the jobs (96.7%).

The central finding

The single largest EPZ/SEZ project in the bulletin — Ruvuma, US$2,600 million in capital and 18,050 jobs, filed under Agriculture — is, according to TISEZA's own project-level narrative elsewhere in the same document, an aluminium smelter with a 2,100 MW coal-fired power plant. This is not necessarily wrong, but it is a genuine internal inconsistency in the bulletin worth surfacing: the sectoral story the aggregate charts tell and the project the bulletin's own profile describes are not obviously the same investment.

None of this makes the boom illegitimate or the capital unwelcome. It does mean the sustainability question TICGL/TERI has raised in other resource-concentration analyses applies here too: is this the start of a diversified, capital-intensive transformation of Tanzania's agriculture, forestry and industrial base — or an enclave investment, heavily concentrated in one country, one investor group, and one region, whose benefits to the wider domestic economy will depend entirely on policy choices the current bulletin does not yet address.

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Read this alongside TICGL/TERI's investment climate analysis

This report on a single quarter's EPZ/SEZ data is best read together with TICGL/TERI's broader assessment of what opportunities and risks are actually shaping investment decisions in Tanzania in 2026 — concentration risk of exactly this kind is one of the themes covered there.

Read: Opportunities & Risks in Tanzania, 2026 →

1. The Scale of the Boom: EPZ/SEZ Investment, Q4 2025/26

Fast, large, and concentrated in two sectors

1.1 Quarter-on-quarter growth

TISEZA's own trend data (Figure 4.7) shows a scheme transformed within a single year. Capital rose from US$115.16 million to US$3,378.5 million; turnover rose from US$73.15 million to US$517.8 million; and jobs rose from 1,155 to 30,235 — a near 26-fold increase in jobs alone, across just seven registered projects.

Indicator	Q4 2024/25	Q4 2025/26	Change
EPZ/SEZ Capital	$115.16M	$3,378.5M	+2,833%
EPZ/SEZ Turnover	$73.15M	$517.8M	+608%
Jobs Created	1,155	30,235	+2,518%

Capital & Turnover Growth

US$ Million

Jobs Created

Number of jobs

1.2 Sector concentration: Agriculture and Forestry dominate

Of the seven projects registered, four were classified under Agriculture, two under Forestry, and one under Manufacturing. Combining the FDI and DI (domestic investment) capital and job breakdowns from the bulletin's own figures (4.12 and 4.13) into a single sector table shows just how concentrated the quarter was.

Sector	Projects	FDI Capital	DI Capital	Total Capital	Total Jobs	Turnover
Agriculture	4	$2,604.0M	$180.7M	$2,784.7M	28,258	$490.7M
Forestry	2	$543.8M	$0.0M	$543.8M	977	$25.1M
Manufacturing	1	$0.0M	$50.0M	$50.0M	1,000	$2.0M
Total	7	$3,147.8M	$230.7M	$3,378.5M	30,235	$517.8M

Agriculture and Forestry combined: 6 of 7 projects, $3,328.5M of $3,378.5M in capital (98.5%), and 29,235 of 30,235 jobs (96.7%).

EPZ/SEZ Capital by Sector

US$ Million (FDI + DI combined)

1.3 Ownership and regional concentration

Ownership in the quarter comprised four foreign-owned projects, two locally owned projects, and one joint venture. Geographically, Iringa and Njombe led on project count with two each, but capital and jobs were overwhelmingly concentrated in a single region: Ruvuma.

Region	Projects	Jobs	Capital	Turnover
Ruvuma	1	18,050	$2,600.0M	$265.5M
Iringa	2	375	$543.1M	$21.2M
Lindi	1	10,000	$180.0M	$220.0M
Njombe	2	810	$5.4M	$9.1M
Dar es Salaam	1	1,000	$50.0M	$2.0M
Total	7	30,235	$3,378.5M	$517.8M

One region, one project, 77% of the capital

Ruvuma's single registered project accounts for US$2,600 million of the US$3,378.5 million in total EPZ/SEZ capital — 77.0% — and 18,050 of the 30,235 jobs, 59.7%. Almost the entire national EPZ/SEZ story this quarter is the performance of one investment in one district.

02 — Source of CapitalChina's Dominance of the FDI Story

TISEZA's own country breakdown (Figure 4.14) leaves little ambiguity: China was, by a wide margin, the dominant source of foreign direct investment into the EPZ/SEZ scheme this quarter.

Country	FDI Capital	Jobs	Turnover	Share of Total FDI Capital
China	$3,143.8M	19,027	$290.6M	99.9%
Kenya	$3.1M	150	$1.2M	0.1%
United Arab Emirates	$0.9M	50	$1.1M	<0.1%
Total FDI	$3,147.8M	19,227	$292.9M	100%

China's share of total EPZ/SEZ capital (FDI + DI combined, $3,378.5M) is 93.1%; its share of total FDI capital alone ($3,147.8M) is effectively 99.9% — Kenya and the UAE are, in practical terms, rounding errors against China within the foreign-investment component.

FDI Capital by Source Country

US$ Million

FDI-Linked Jobs by Source Country

Number of jobs

2.1 Foreign vs. domestic investment

The quarter also shows a widening gap between foreign and domestic capital inside the scheme. FDI reached US$3,147.8 million against DI of US$230.7 million — both far above the prior year's US$97.62 million (FDI) and US$38.04 million (DI), but the ratio between them has shifted sharply toward foreign capital.

FDI vs. Domestic Investment (DI)

US$ Million, Q4 2024/25 vs Q4 2025/26

TISEZA's own commentary reads this as a positive signal on two fronts at once — FDI remains the key driver of scheme investment, while the emergence of a meaningfully larger DI figure suggests improving local investor engagement. Both are true. What the bulletin's framing does not address is the scale gap between them: domestic capital that grew six-fold still amounts to 6.8% of what a single foreign source group contributed.

3. What Is Actually Being Built?

The sector label and the project profile tell different stories

TISEZA's Section 7 profiles individual EPZ/SEZ projects by name. Two of them, both branded HWTZ, appear to be the same corporate group operating at a combined scale of roughly US$6 billion across two of Tanzania's four strategic Special Economic Zones — and neither is describable, on its own terms, as an agriculture or forestry project.

Ruvuma SEZ — Songea, Songea Urban District

HWTZ Holding Limited

An industrial cluster centred on an aluminium production plant with a capacity of 1,000,000 tonnes per year, alongside a coal-fired power plant with a capacity of 2,100 MW. Land clearing and road construction are underway; a Circulating Fluidized Bed (CFB) Boiler Steel Base (first lot) was delivered through the Port of Mtwara, with further equipment expected from July 2026.

≈$3,000M investment ≈10,000 direct jobs 2,100 MW coal power 1,000,000 t/yr aluminium

Bagamoyo SEZ — 33-year lease, 500 hectares

HWTZ SEZ Limited

A comprehensive industrial park with an expected investment exceeding US$3 billion, intended to host over 150 industrial investments. The investor will directly operate three core industries: assembly of vehicles, boats and motorcycles, and production of construction materials. Roads, water and solar-power infrastructure are under construction.

>$3,000M investment >5,000 direct jobs 500 hectares Vehicle & materials assembly

The classification gap

TISEZA's sector-level charts (Figures 4.8, 4.12 and 4.13) place the leading share of EPZ/SEZ capital and jobs under "Agriculture" and "Forestry." Yet the only project TISEZA's own bulletin names for Ruvuma SEZ — the region that alone accounts for 77% of quarterly capital and 60% of jobs — is an aluminium smelter and coal-fired power plant, an industrial and energy project by any conventional sector definition. TICGL/TERI is not asserting that the two do not relate — HWTZ Holding's site may include agricultural or forestry components not detailed in this bulletin — only that the bulletin, as published, does not reconcile its own aggregate sector data with its own named project profile. This is precisely the kind of measurement and classification gap TICGL/TERI has flagged in other TISEZA and Ministry data — most notably the divergence between CAG and Ministry of Minerals local-content figures in the mining sector.

This matters beyond bookkeeping. If Tanzania's public investment data records a coal-and-aluminium mega-project as an agriculture and forestry investment, then any future policy built on the "the boom is diversifying into agriculture and forestry" narrative would be building on a number that does not fully hold up against the same document's own project detail — with consequences for how targeted incentives, environmental oversight and local-content rules are designed and applied.

03 — AnalysisIs This Boom Sustainable?

Capital of this scale and speed is a genuine opportunity: it is capital-intensive, structurally significant, and consistent with Dira 2050's agenda of moving Tanzania toward value addition and industrialisation. Whether it is sustainable depends on how five specific risks are managed — none of which the current bulletin addresses.

What is genuinely positive

Capital-intensive investment of this scale can drive real structural change — from smallholder-dominated agriculture toward large-scale, industrial-grade production and processing.
It aligns with Dira 2050 and the national value-addition agenda, and it is arriving alongside genuine infrastructure gains (the SGR, port modernisation, the Julius Nyerere Hydropower Project) that improve the investment environment more broadly.
It can bring technology, energy infrastructure (2,100 MW is equivalent to a meaningful share of national generation capacity), and — if managed well — export-market access, including to China itself.

4.1 Land governance and free, prior and informed consent

Projects at this scale require thousands of hectares. TISEZA's bulletin confirms SEZ land allocations exceeding 900 hectares across Bagamoyo, Ruvuma, Kwala and Nala combined since August 2025, and describes HWTZ's Ruvuma cluster as already undertaking land clearing. Tanzania has prior experience — in Pwani, Morogoro and parts of the south — of large land-based projects generating disputes where free, prior and informed consent (FPIC) and fair compensation are not transparently documented. This bulletin does not publish FPIC or compensation process details for any SEZ project.

4.2 Local content and technology transfer

The bulletin gives no local-equity, local-supplier, or skills-transfer data for any named EPZ/SEZ project. Chinese-led industrial projects internationally have a documented tendency to bring their own workforce, machinery and supply chains; without published local-content requirements or verification — the same gap TICGL/TERI has flagged in mining local-content reporting — spillover effects for Tanzanian SMEs and workers cannot currently be assessed from public data.

4.3 Environmental and social risk

The risk profile here is specifically industrial rather than agricultural: a 2,100 MW coal-fired power plant carries direct implications for emissions and Tanzania's energy-mix trajectory, and a 1,000,000-tonne/year aluminium smelter is highly energy- and water-intensive. Separately, if the "Agriculture" and "Forestry" sector totals do include genuine large-scale monoculture or forestry operations, biodiversity, water-use and community-land impacts are the relevant risks there. Either reading requires environmental impact assessment (EIA) disclosure that this bulletin does not provide at project level.

4.4 Dependency and concentration risk

Dependence sits on two overlapping axes: 93.1% of quarterly EPZ/SEZ capital from a single country, and — on the evidence of the two named HWTZ-branded projects — a meaningful share of that capital tracing to what appears to be a single investor group operating in two separate SEZs simultaneously. A shift in Chinese outbound-investment policy, in the group's own financing, or in bilateral relations would expose Tanzania's EPZ/SEZ investment pipeline to a concentrated shock, not a diversified one.

4.5 The fiscal cost of the incentive package

TISEZA's own incentive schedule for projects targeting international markets includes free project land, a 10-year corporate income tax exemption, and VAT/duty exemptions on capital goods, raw materials, utilities and services. These are standard instruments to attract capital-intensive FDI, and may be entirely justified here — but they also mean the fiscal benefit to Tanzania from this boom, in the near term, is likely to be concentrated in jobs, forex earnings and turnover rather than direct tax revenue, a pattern consistent with TICGL/TERI's broader concern about Tanzania's narrow and unpredictable tax base.

The central risk, stated plainly

If land governance, local content, environmental oversight and source-diversification are not actively managed, this boom risks becoming what TICGL/TERI has called an "enclave investment" elsewhere: capital arrives, headline figures rise, but the benefits that reach the wider Tanzanian economy — beyond direct jobs and the eventual tax base — remain limited relative to the scale of the capital involved.

04 — TransparencyWhat the Bulletin Does Not Show

A quarterly investment bulletin cannot be expected to carry every disclosure a full impact assessment would. But for a reader trying to judge sustainability rather than just scale, four specific gaps stand out in this edition.

No local-content data — no supplier counts, local-equity shares, or skills-transfer figures for any EPZ/SEZ project, foreign or domestic.
No land compensation or FPIC documentation — land allocation hectarage is reported; the consent and compensation process behind it is not.
No project-level environmental disclosure — TISEZA confirms it houses an Environmental Impact Assessment function institutionally, but no EIA outcome specific to the Ruvuma or Bagamoyo projects appears in this edition.
An unreconciled sector classification — the aggregate "Agriculture" and "Forestry" totals and the named Ruvuma project profile (aluminium and coal power) do not evidently describe the same activity, and the bulletin does not explain the gap.

05 — RecommendationsPolicy Recommendations

None of this argues against the investment. It argues for the governance layer that determines whether capital of this scale compounds into broad-based growth or sits as a concentrated, hard-to-reverse dependency.

1Reconcile EPZ/SEZ sector classification and publish it project-by-project

Publish a project-level register showing each SEZ investment's actual activity alongside its reported sector code.
Have TISEZA or an independent body audit and correct classification going forward, the same way local-content figures need reconciling in mining.

2Mandate and verify local content for SEZ mega-projects

Set binding local-procurement, local-employment and skills-transfer targets for projects above a defined capital threshold.
Publish independently audited local-content figures annually, project by project, not only in aggregate.

3Publish land governance and FPIC documentation

Require and publish evidence of free, prior and informed consent and fair compensation for every SEZ land allocation above a set hectarage.
Establish an accessible grievance-redress mechanism for affected communities in Songea, Bagamoyo, Kwala and Nala.

4Diversify the FDI source base deliberately

Set an explicit target range for country-of-origin concentration within the EPZ/SEZ pipeline, and actively court capital from a wider set of source markets.
Track and publish investor-group-level concentration, not just country-level, given the apparent role of a single group across two SEZs.

Also recommended

Publish project-level environmental impact assessment outcomes for the Ruvuma and Bagamoyo mega-projects, given the scale of the coal-power and smelting components, and disclose the expected fiscal-revenue timeline associated with the 10-year corporate tax exemption and duty/VAT relief already committed to these projects.

"Ninety-three percent of a boom this size, from one country, largely traceable to one investor group, filed under a sector label its own named project does not obviously match — none of that makes the capital unwelcome. It makes the governance choices Tanzania makes next the entire story. Scale is not the same as sustainability. Policy — on land, on local content, on environmental oversight, on source diversification — will decide which one this becomes."

— TICGL / Tanzania Economic Research Institute (TERI)

06 — SourcesMethod & Source Note

Basis

This report is built directly from TISEZA's Quarterly Investment Bulletin, April–June 2026 (Q4 2025/26): the Director General's foreword, Section 4.6 (EPZ/SEZ Schemes, Figures 4.7–4.14), and Section 7 (Opportunities in Tanzania — SEZ project profiles for Bagamoyo, Kwala, Nala, Buzwagi and Ruvuma). All monetary and job figures were cross-checked for internal consistency across the bulletin's own FDI/DI, sector and regional tables before use in this analysis.

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Request a Full Briefing

This page summarises TICGL/TERI's reading of TISEZA's Q4 2025/26 Quarterly Investment Bulletin. Institutions, investors, government agencies and development partners may request a fuller briefing — including sector-by-sector detail and policy design options — directly from TERI.

✉️ Request via economist@ticgl.com →

07 — Quick AnswersFrequently Asked Questions

How much of Tanzania's EPZ/SEZ investment came from China in Q4 2025/26?

China supplied US$3,143.8 million of the US$3,378.5 million in total EPZ/SEZ capital registered in Q4 2025/26 — approximately 93.1%. China also accounted for 19,027 of the 30,235 jobs created, roughly 62.9%. Kenya and the UAE were the next largest FDI sources, at US$3.1 million and US$0.9 million respectively.

Which sectors did the Chinese-led EPZ/SEZ capital go into?

Agriculture and Forestry together accounted for six of the seven EPZ/SEZ projects registered, US$3,328.5 million of the capital (98.5%), and 29,235 of the 30,235 jobs (96.7%). Agriculture alone drew US$2,784.7 million and 28,258 jobs; Forestry drew US$543.8 million and 977 jobs.

What is actually being built with the Ruvuma capital?

TISEZA's bulletin records a single project in Ruvuma SEZ worth US$2,600 million and 18,050 jobs. The only Ruvuma project TISEZA's own bulletin names is HWTZ Holding Limited — an approximately US$3 billion aluminium smelter (1,000,000 tonnes/year capacity) and 2,100 MW coal-fired power plant in Songea, described elsewhere in the bulletin as an industrial and energy project.

Is this level of dependence on a single country and investor group sustainable?

It is a genuine opportunity with real concentration risk: 93% of EPZ/SEZ capital from one country, and Tanzania's two largest Chinese-linked project profiles in this bulletin (Bagamoyo and Ruvuma, both branded HWTZ, together worth roughly US$6 billion) appear to trace to the same investor group. Sustainability depends on land governance, local content, environmental oversight, and diversification of the FDI source base.

Does the bulletin disclose local content, land compensation, or environmental safeguard details?

No. TISEZA's Q4 2025/26 bulletin does not report local-content shares, land compensation or FPIC processes, or project-level environmental impact assessment findings for the EPZ/SEZ projects it profiles.

Muhtasari

Muhtasari kwa Kiswahili

Boom ya Mtaji wa China kwenye Kilimo na Misitu ya Kanda Maalum za Kiuchumi — Je, Ni Sustainable? — Kati ya Dola za Marekani milioni 3,378.5 za mtaji wa EPZ/SEZ uliosajiliwa Robo ya Nne 2025/26, China peke yake inachukua Dola milioni 3,143.8 (asilimia 93.1%). Ajira zinazotokana na China ni 19,027 kati ya 30,235 zote (asilimia 62.9%). Sekta kuu ni Kilimo (Dola milioni 2,604+ FDI, hasa Ruvuma) na Misitu.

Vipengele vyema: Hii ni mtaji unaohitaji uwekezaji mkubwa (capital-intensive) — unaoweza kuleta mabadiliko makubwa ya structural (kutoka smallholder farming kwenda large-scale agro-industrial). Inalingana na Dira 2050 na agenda ya value addition, na inaweza kuleta teknolojia, mifumo ya umeme, viwanda vya usindikaji, na masoko ya nje (hasa China yenyewe).

Hatari za ardhi: Miradi mikubwa kama hii inahitaji maelfu ya hekta. Kama hakuna free, prior and informed consent (FPIC) au fidia yenye haki, inaweza kuleta migogoro ya ardhi — kama ilivyowahi kutokea Pwani, Morogoro, na sehemu za Kusini. Taarifa hii ya TISEZA haioneshi taratibu za FPIC au fidia kwa mradi wowote wa SEZ.

Local content na uhamishaji teknolojia: Taarifa haioneshi details za local equity, skills transfer, au local suppliers. Miradi ya Kichina mara nyingi huwa na tendency ya kuleta wafanyakazi wao, mashine zao, na supply chain yao — jambo linaloweza kupunguza spillover effects kwa SMEs za Tanzania.

Hatari za kimazingira na utegemezi: Mradi pekee wa Ruvuma unaotajwa na TISEZA (HWTZ Holding Limited) ni kiwanda cha aluminium (tani milioni 1 kwa mwaka) pamoja na mtambo wa umeme wa makaa ya mawe wa MW 2,100 — si shughuli ya kilimo. Kutegemea nchi moja kwa asilimia 93 ya mtaji wa EPZ/SEZ, na kampuni moja (HWTZ) kwenye SEZ mbili tofauti (Ruvuma na Bagamoyo, zenye thamani ya jumla ya karibu Dola bilioni 6), ni hatari kubwa endapo sera au mahusiano ya kimataifa yatabadilika.

Mapendekezo ya TICGL: Kusawazisha uainishaji wa sekta za EPZ/SEZ na kuchapisha kwa kila mradi; kuweka na kuthibitisha malengo ya local content kwa miradi mikubwa; kuchapisha taratibu za FPIC na fidia ya ardhi; kutafuta mtaji kutoka nchi mbalimbali ili kupunguza utegemezi wa nchi moja; na kuchapisha matokeo ya Tathmini ya Athari za Kimazingira (EIA) kwa miradi ya Ruvuma na Bagamoyo.

Hitimisho: Boom hii ni fursa kubwa, lakini sustainability yake itategemea jinsi TISEZA na serikali zitakavyosimamia local content, land governance, na technology transfer. Kama haitasimamiwa vizuri, inaweza kuwa "enclave investment" — mtaji unakuja, lakini manufaa yanabaki madogo kwa uchumi wa ndani.

Mtaji wa EPZ/SEZ Q4 2025/26: $3,378.5M (juu kutoka $115.16M)
Hisa ya China: 93.1% ya mtaji, 62.9% ya ajira
Kilimo na Misitu: 98.5% ya mtaji, 96.7% ya ajira
Ruvuma pekee: $2,600M na ajira 18,050 (mradi mmoja)

Chanzo: TICGL/TERI, ikisoma Taarifa ya Robo ya Uwekezaji ya TISEZA, Aprili–Juni 2026. Kwa maelezo zaidi wasiliana na: economist@ticgl.com.

Executive Summary

Tanzania's national debt stock stood at TZS 132.74 trillion (USD 50,595.8 million) at the end of June 2026, according to the Bank of Tanzania's (BOT) July 2026 Monthly Economic Review. Of this, external debt accounted for 70.4 percent (TZS 93.41 trillion) and domestic debt accounted for 29.6 percent (TZS 39.33 trillion).

External debt rose only marginally month-on-month (up 0.1 percent from May 2026), but continued a steep multi-year climb — from roughly TZS 46.8 trillion in June 2018 to over TZS 93 trillion in June 2026, more than doubling in eight years. Domestic debt has grown even faster in relative terms, tripling from TZS 13.2 trillion to TZS 39.3 trillion over the same period, with the Bank of Tanzania overdraft facility, commercial banks and pension funds as the dominant domestic creditors.

Multilateral institutions remain Tanzania's single largest external creditor group (59.3 percent of external debt), the US Dollar dominates currency exposure (66.2 percent), and Balance of Payments/budget support plus transport & telecommunication infrastructure together absorb over 44 percent of disbursed external debt. In June 2026 alone, the Government paid an estimated TZS 2.2 trillion in combined domestic and external debt service — a reminder of how much of each month's revenue effort goes toward servicing past borrowing rather than new development spending.

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Related TICGL Deep-Dive

What's Next for Tanzania's Economy? The Policy Gaps Keeping USD 1 Trillion Out of Reach by 2050

Rising debt is only one piece of the Dira 2050 puzzle. TICGL's flagship analysis examines the structural and policy gaps standing between Tanzania and a USD 1 trillion economy — and why debt-financed growth alone won't close that gap.

Read the Full Analysis →

1. National Debt Overview — June 2026

All figures converted from BOT's USD-denominated debt tables using the end-June 2026 exchange rate of TZS 2,623.5 per USD, and presented in TZS trillions for clarity.

TZS 132.74 Tn

Total national debt stock (Jun-2026)

TZS 93.41 Tn

External debt stock — 70.4% of total

TZS 39.33 Tn

Domestic debt stock — 29.6% of total

+0.1%

External debt growth, m-o-m (May→Jun 2026)

Table 1: Tanzania National Debt Stock Snapshot, June 2026
Item	USD Million	TZS Trillion (approx.)	Share of National Debt
Total national debt stock	50,595.8	132.74	100.0%
— External debt (public + private)	35,606.1	93.41	70.4%
of which: Central government	29,606.0	77.68	83.1% of external
of which: Private sector	6,000.1	15.74	16.9% of external
— Domestic debt (excl. liquidity papers)	~14,989.7	39.33	29.6%
Total (check)	50,595.8	132.74	100.0%

Source: Bank of Tanzania, Monthly Economic Review, July 2026 (Tables 2.7.1, 2.7.5, A10). End-of-period exchange rate: TZS 2,623.5/USD.

Chart 1: Composition of Tanzania's National Debt, June 2026

External vs domestic share of the TZS 132.74 trillion debt stock

Chart unavailable — see Table 1 above for the External (70.4%) vs Domestic (29.6%) debt split.

2. Debt Trend: 2018 – 2026

Tanzania's total national debt has more than doubled over the past eight fiscal years, rising from an estimated TZS 60.0 trillion in June 2018 to TZS 132.74 trillion in June 2026. Domestic debt has grown the fastest in percentage terms — nearly tripling — while external debt has roughly doubled, reflecting continued reliance on both concessional multilateral financing and an expanding domestic securities market.

Chart 2: Tanzania's External, Domestic and Total Debt, June 2018 – June 2026 (TZS Trillion)

Long-run debt accumulation trend, as at end of June each year

Chart unavailable — see Table 2 below for the full year-by-year series.

Note: External debt converted to TZS using the respective end-of-period exchange rate for each year; domestic debt as reported directly by the Ministry of Finance in TZS.

Table 2: Tanzania National Debt Stock by Year, June 2018 – June 2026 (TZS Trillion)
As at June	External Debt (TZS Tn)	Domestic Debt (TZS Tn)	Total Debt (TZS Tn)
2018	46.77	13.23	60.00
2019	50.15	14.86	65.01
2020	52.76	15.59	68.35
2021	58.63	18.93	77.56
2022	64.26	24.04	88.30
2023	75.67	28.93	104.60
2024	75.87	31.94	107.81
2025	85.18	35.50	120.68
2026 (Jun)	93.41	39.33	132.74

Source: BOT Monthly Economic Review, July 2026 (Table A1, Table 2.7.1, Chart 2.7.1). External debt converted using end-of-period exchange rates.

Monthly Movement of Total National Debt (June 2025 – June 2026)

Zooming into the most recent 13 months shows a less linear picture: total debt fluctuated between roughly TZS 123.6 trillion and TZS 134.3 trillion, driven as much by shilling depreciation and cross-currency valuation effects as by new borrowing.

Chart 3: Total National Debt Stock, Monthly, June 2025 – June 2026 (TZS Trillion)

Reflects both new borrowing/repayment and exchange rate valuation effects

Chart unavailable — see Table 3 below for the monthly series.

Table 3: Total National Debt Stock by Month (TZS Trillion)
Month	Total Debt (USD Mn)	Exchange Rate (TZS/USD)	Total Debt (TZS Tn)
Jun-2025	48,396.3	2,604.6	126.05
Jul-2025	49,066.3	2,545.8	124.91
Aug-2025	50,159.0	2,463.3	123.56
Sep-2025	51,050.1	2,442.8	124.71
Oct-2025	51,653.8	2,451.6	126.63
Nov-2025	50,868.2	2,436.8	123.96
Dec-2025	51,013.8	2,447.5	124.86
Jan-2026	51,221.0	2,518.1	128.98
Feb-2026	51,078.3	2,542.5	129.87
Mar-2026	50,803.5	2,577.4	130.94
Apr-2026	51,623.7	2,602.0	134.32
May-2026	50,599.0	2,609.2	132.02
Jun-2026	50,595.8	2,623.5	132.74

Source: BOT Monthly Economic Review, July 2026 (Table A10).

3. External Debt: Creditors, Currency & Use of Funds

External debt (public and private) stood at TZS 93.41 trillion (USD 35,606.1 million) at end June 2026 — a marginal 0.1 percent increase from May 2026. Central government accounted for 83.1 percent of this (TZS 77.68 trillion), while the private sector accounted for 16.9 percent (TZS 15.74 trillion). During the month, external loans disbursed totalled USD 379.8 million (~TZS 1.0 trillion), mainly to the central government, while external debt service payments totalled USD 249.2 million (~TZS 0.65 trillion), of which USD 184.9 million was principal.

3.1 External Debt by Creditor Category

Chart 4: External Debt by Creditor, June 2026

Share of TZS 93.41 trillion external debt stock

Chart unavailable — see Table 4.

Table 4: External Debt Stock by Creditor, June 2026
Creditor	TZS Trillion	Share
Multilateral (World Bank, AfDB, IMF, etc.)	55.42	59.3%
Commercial lenders	32.17	34.4%
Bilateral (government-to-government)	4.01	4.3%
Export credit agencies	1.82	1.9%
Total external debt	93.41	100.0%

Source: BOT Monthly Economic Review, July 2026 (Table 2.7.2).

3.2 External Debt by Currency

Chart 5: External Debt by Currency, June 2026

US Dollar exposure dominates — a key exchange-rate risk factor

Chart unavailable — see Table 5.

Table 5: Disbursed External Debt by Currency Composition
Currency	Jun-25	May-26	Jun-26
United States Dollar	66.0%	65.9%	66.2%
Euro	17.7%	17.5%	17.4%
Chinese Yuan	6.4%	6.6%	6.7%
Other currencies	9.9%	9.9%	9.8%

Source: BOT Monthly Economic Review, July 2026 (Table 2.7.4).

Currency risk note: With 66.2 percent of external debt denominated in US Dollars and the shilling having depreciated 0.08 percent year-on-year to June 2026, continued TZS softening directly raises the shilling-equivalent cost of debt service — a key reason BOT actively manages reserves and intervenes in the interbank foreign exchange market.

3.3 External Debt by Use of Funds

Chart 6: Disbursed Outstanding External Debt by Use of Funds, June 2026

Where borrowed money has actually gone

Chart unavailable — see Table 6.

Table 6: Disbursed Outstanding External Debt by Activity/Use of Funds
Activity	Jun-25	May-26	Jun-26
Balance of Payments & budget support	21.9%	22.3%	22.1%
Transport & telecommunication	21.1%	22.1%	22.0%
Social welfare & education	19.9%	19.5%	19.5%
Energy & mining	13.0%	12.4%	12.8%
Agriculture	5.3%	5.4%	5.3%
Real estate & construction	4.4%	5.1%	5.1%
Finance & insurance	4.1%	4.2%	4.2%
Industries	3.5%	2.8%	2.8%
Tourism	1.7%	1.7%	1.7%
Other	5.1%	4.6%	4.6%

Source: BOT Monthly Economic Review, July 2026 (Table 2.7.3).

4. Domestic Debt: Instruments & Creditors

Government's domestic debt stock rose marginally to TZS 39.33 trillion at end June 2026, from TZS 39.26 trillion in May 2026. In June alone, the Government mobilised TZS 468 billion from the domestic market — TZS 273.3 billion in Treasury bonds and TZS 194.7 billion in Treasury bills — while domestic debt service payments totalled TZS 1.55 trillion (TZS 1.26 trillion principal, TZS 0.29 trillion interest).

4.1 Domestic Debt by Borrowing Instrument

Chart 7: Domestic Debt by Instrument, June 2026

Government bonds dominate the domestic debt portfolio

Chart unavailable — see Table 7.

Table 7: Domestic Debt by Borrowing Instrument, June 2026
Instrument	TZS Trillion	Share
Government bonds	31.42	79.9%
Overdraft (non-securitized)	6.01	15.3%
Treasury bills	1.76	4.5%
Government stocks	0.14	0.3%
Total domestic debt	39.33	100.0%

Source: BOT Monthly Economic Review, July 2026 (Table 2.7.5).

4.2 Domestic Debt by Creditor Category

Chart 8: Domestic Debt by Creditor, June 2026

Commercial banks and pension funds are the Government's main domestic financiers

Chart unavailable — see Table 8.

Table 8: Domestic Debt by Creditor Category, June 2026
Creditor	TZS Trillion	Share
Commercial banks	11.32	28.8%
Pension funds	10.40	26.4%
Bank of Tanzania (incl. overdraft)	7.20	18.3%
Others (institutions, individuals, non-residents)	7.55	19.2%
Insurance companies	2.02	5.1%
BOT's special funds	0.84	2.1%
Total domestic debt	39.33	100.0%

Source: BOT Monthly Economic Review, July 2026 (Table 2.7.6).

4.3 Domestic Debt Growth Trajectory, 2018–2026

Chart 9: Government Domestic Debt Stock, June 2018 – June 2026 (TZS Trillion)

Chart unavailable — see Table 2 above for the domestic debt column.

5. Debt Service & New Borrowing (June 2026 Snapshot)

Table 9: Debt Service and New Borrowing Flows, June 2026
Flow	External (TZS Tn)	Domestic (TZS Tn)	Combined (TZS Tn)
New borrowing / disbursements	~1.00	0.468	~1.47
Principal repayments	~0.49	1.26	~1.75
Interest payments	~0.17	0.29	~0.46
Total debt service (principal + interest)	~0.65	1.55	~2.20

Source: BOT Monthly Economic Review, July 2026 (narrative figures, Section 2.7). External figures converted from USD at TZS 2,623.5/USD.

In effect, for every shilling of new external borrowing disbursed in June 2026, the Government paid out roughly the same amount servicing existing external debt — while domestic debt service alone (TZS 1.55 trillion) was more than three times the value of new domestic securities issued (TZS 468 billion) that month. This "rolling debt" dynamic is a key reason the domestic debt stock has grown steadily even without large net new financing every month.

6. Macroeconomic Context Behind the Debt Numbers

Debt does not move in isolation — it sits alongside growth, inflation and monetary policy. Key context from BOT's July 2026 review:

Growth: Real GDP grew 6.0 percent in Q1 2026 (up from 4.3 percent a year earlier), with the Bank projecting 5.9 percent growth in Q2 2026 — growth that partly reflects continued public investment financed by borrowing.
Inflation: Headline inflation eased slightly to 4.0 percent in June 2026 (from 4.2 percent in May), remaining within the national 3–5 percent target band, though core inflation rose to 3.7 percent — its highest contribution to headline inflation in two years.
Monetary policy tightening: Following signs of broadening inflationary pressure, the Monetary Policy Committee raised the Central Bank Rate (CBR) from 5.75 percent to 6.25 percent for Q3 2026 (effective 2 July 2026) — a move that also raises the cost of new domestic government borrowing going forward.
Reserves buffer: Gross official foreign exchange reserves stood at USD 5,673.5 million, covering 4.4 months of projected imports — above the 4-month national benchmark, providing some cushion for external debt service.
Exchange rate: The shilling traded at an average of TZS 2,633.73/USD in June 2026, depreciating 0.08 percent year-on-year — modest, but a continued gradual drag on the TZS-equivalent cost of Tanzania's dollar-heavy external debt.

Chart 10: Central Bank Rate vs Headline Inflation, Recent Trend

Monetary tightening raises the cost of future domestic borrowing

Chart unavailable — CBR was held at 5.75% through Q2 2026, then raised to 6.25% for Q3 2026 (effective 2 July 2026), while headline inflation moved from 3.3% (Jun-25) to 4.0% (Jun-26).

7. Risks & Outlook

Currency concentration risk: Two-thirds of external debt is US-Dollar denominated. Any renewed shilling depreciation — plausible given continued global energy price volatility from the Middle East conflict — directly increases the shilling cost of debt service.

Rising interest burden domestically: With the CBR raised to 6.25 percent for Q3 2026, new Treasury bond and bill issuances are likely to carry higher coupons, raising the Government's future domestic interest bill on top of the TZS 39.33 trillion already outstanding.

Reserve buffer intact: At 4.4 months of import cover, reserves remain above the national and regional benchmarks, providing a cushion against short-term external shocks to debt service capacity.

Multilateral concentration cuts both ways: With 59.3 percent of external debt held by multilateral institutions (typically concessional, longer-tenor financing), Tanzania's external debt profile is comparatively lower-risk than one dominated by short-term commercial borrowing — though commercial debt (34.4 percent) is still substantial and growing.

For a broader assessment of how debt-financed public investment interacts with Tanzania's structural growth constraints and its Dira 2050 ambitions, see TICGL's related analysis on the policy gaps keeping USD 1 trillion out of reach by 2050 and whether Tanzania's economy is truly growing.

Muhtasari kwa Kiswahili

Muhtasari wa uchambuzi wa deni la taifa la Tanzania, kutoka Taarifa ya Kila Mwezi ya Uchumi ya BOT, Julai 2026

Deni la taifa: Hadi kufikia Juni 2026, deni la taifa la Tanzania lilifikia Shilingi trilioni 132.74 (dola za Marekani milioni 50,595.8). Kati ya hizo, asilimia 70.4 ni deni la nje (Shilingi trilioni 93.41), na asilimia 29.6 ni deni la ndani (Shilingi trilioni 39.33).

Deni la nje: Deni la nje liliongezeka kwa asilimia 0.1 tu kutoka Mei hadi Juni 2026. Serikali kuu inamiliki asilimia 83.1 ya deni hilo, huku sekta binafsi ikimiliki asilimia 16.9. Wakopeshaji wakubwa ni taasisi za kimataifa (multilateral) kwa asilimia 59.3, wakifuatiwa na wakopeshaji wa kibiashara kwa asilimia 34.4.

Sarafu: Dola ya Marekani inatawala mfumo wa deni la nje kwa asilimia 66.2, ikifuatiwa na Euro (asilimia 17.4) na Yuan ya China (asilimia 6.7) — hali inayoongeza hatari endapo thamani ya shilingi itashuka zaidi.

Deni la ndani: Deni la ndani limefikia Shilingi trilioni 39.33, likiongozwa na hatifungani za Serikali (asilimia 79.9). Wadai wakuu wa ndani ni benki za biashara (asilimia 28.8), mifuko ya pensheni (asilimia 26.4), na Benki Kuu ya Tanzania kupitia akaunti ya overdraft (asilimia 18.3).

Malipo ya deni: Katika mwezi wa Juni 2026 pekee, Serikali ililipa jumla ya takriban Shilingi trilioni 2.2 kama malipo ya deni la ndani na nje — kiasi kikubwa zaidi ya thamani ya mikopo mipya iliyochukuliwa mwezi huo huo.

Sera ya fedha: Kutokana na dalili za mfumuko wa bei kuenea (core inflation kupanda hadi asilimia 3.7), Benki Kuu iliongeza Riba ya Benki Kuu (CBR) kutoka asilimia 5.75 hadi asilimia 6.25 kwa robo ya tatu ya 2026 — hatua itakayoongeza gharama za mikopo mipya ya ndani.

Hitimisho: Ingawa akiba ya fedha za kigeni (miezi 4.4 ya uagizaji bidhaa) inatoa kinga fulani, ukuaji endelevu wa deni — hasa deni la ndani — unahitaji tathmini makini ya uwiano kati ya uwekezaji wa umma na uwezo wa kulipa deni kwa muda mrefu.

Frequently Asked Questions

What is Tanzania's total national debt as of June 2026?

Tanzania's national debt stock stood at TZS 132.74 trillion (USD 50,595.8 million) at the end of June 2026 — 70.4 percent external and 29.6 percent domestic.

How much of Tanzania's debt is external versus domestic?

External debt was TZS 93.41 trillion (USD 35,606.1 million), while domestic debt was TZS 39.33 trillion, as at end June 2026.

Who are Tanzania's largest external creditors?

Multilateral institutions hold 59.3 percent of external debt (about TZS 55.42 trillion), followed by commercial lenders at 34.4 percent, bilateral creditors at 4.3 percent, and export credit agencies at 1.9 percent.

Which currency dominates Tanzania's external debt?

The US Dollar accounts for 66.2 percent of external debt, followed by the Euro (17.4 percent) and the Chinese Yuan (6.7 percent).

Who holds Tanzania's domestic debt?

Commercial banks hold 28.8 percent, pension funds 26.4 percent, the Bank of Tanzania (mainly via the overdraft facility) 18.3 percent, other holders 19.2 percent, and insurance companies 5.1 percent.

How much did the Government spend on debt service in June 2026?

Roughly TZS 2.2 trillion combined — about TZS 1.55 trillion on domestic debt and about TZS 0.65 trillion on external debt.

Primary source: Bank of Tanzania, "Monthly Economic Review," July 2026. Tables 2.7.1–2.7.6, A1, A10, Chart 2.7.1, and related narrative sections on Government Budgetary Operations, Monetary Policy and External Sector Performance. USD figures converted to TZS using BOT's reported end-of-period exchange rates for each respective date. This analysis is produced by TICGL/TERI for informational and research purposes and does not constitute investment advice.

Executive Summary

Tanzania's economy maintained strong momentum through mid-2026, even as global conditions stayed volatile. Real GDP grew 6.0 percent in Q1 2026, up sharply from 4.3 percent a year earlier, driven by agriculture, financial and insurance services, and transport and storage. The Bank of Tanzania (BOT) projects 5.9 percent growth in Q2 2026, supported by expanding private sector credit, reliable power supply, strong mineral production and continued infrastructure investment.

Headline inflation eased marginally to 4.0 percent in June 2026 from 4.2 percent in May, staying within the national 3–5 percent target band — but core inflation climbed to 3.7 percent, its highest contribution to headline inflation in two years, prompting the Monetary Policy Committee to raise the Central Bank Rate from 5.75 percent to 6.25 percent for Q3 2026. Private sector credit growth accelerated to 28.1 percent year-on-year, the fastest pace in years, while the current account deficit widened to USD 2,303.9 million as import growth outpaced exports. Foreign reserves remained adequate at 4.4 months of import cover. In Zanzibar, inflation rose to 6.0 percent on food and transport costs, even as tourism-driven export earnings grew strongly.

📊

Related TICGL Deep-Dive

What's Next for Tanzania's Economy? The Policy Gaps Keeping USD 1 Trillion Out of Reach by 2050

Strong quarterly growth is encouraging, but TICGL's flagship analysis asks the harder question: are the structural and policy conditions in place for Tanzania to sustain this trajectory all the way to a USD 1 trillion economy by 2050?

Read the Full Analysis →

1. Global Economic Conditions

The global economy closed the first half of 2026 balancing two opposing forces: an energy-price shock from the Middle East conflict, and rapid AI-driven investment. The IMF's July 2026 World Economic Outlook Update projects global growth of 3.0 percent in 2026, strengthening to 3.4 percent in 2027 — broadly unchanged from the April 2026 forecast. The OECD's July 2026 Outlook is more cautious, projecting 2.8 percent in 2026, rising to 3.1 percent in 2027. Sub-Saharan Africa growth is projected to moderate to 4.3 percent in 2026 before recovering to 4.4 percent in 2027.

Global commodity prices corrected sharply in June 2026 as risk premiums eased following a ceasefire near the Strait of Hormuz. Crude oil (average of Brent, Dubai, WTI) fell to USD 81.70/barrel from USD 100.43 in May; Brent fell 20.6 percent to USD 85.40/barrel. Gold averaged USD 4,228/troy ounce, down from USD 4,587.21, as safe-haven demand eased. Despite the correction, energy prices remained about 25 percent above pre-conflict levels.

Chart 1: Global Commodity Price Index Change, June 2026 (m-o-m)

Sharp correction across energy, fertilizers and precious metals

Chart unavailable — see Table 1 below.

Table 1: World Commodity Price Index, % Change (June 2026, m-o-m)
Commodity/Index	% Change (m-o-m)
Fertilizers	-21.8%
Energy	-17.7%
o/w Brent crude oil	-20.6%
o/w Natural gas (US)	+7.3%
Precious metals	-9.2%
Non-energy	-3.2%
Metals and minerals	-2.4%
Food	-2.6%
Agriculture	-1.7%
Raw materials	-1.2%
Beverages	+1.1%

Source: World Bank Commodity Price (Pink Sheet), via BOT Monthly Economic Review, July 2026 (Table 1.1).

Monetary policy abroad: In June 2026, the European Central Bank and Bank of Japan each raised policy rates by 25 basis points (ECB deposit rate to 2.25%, BoJ to 1.00%), while the US Federal Reserve and Bank of England held rates at 3.50–3.75% and 3.75% respectively, both signalling their next move was more likely a hike than a cut. The IMF revised its 2026 global headline inflation forecast upward to 4.7 percent (from 4.1% in 2025), implying disinflation momentum since 2024 has stalled.

2. Domestic Output & GDP Growth

6.0%

Real GDP growth, Q1 2026 (vs 4.3% Q1 2025)

5.9%

BOT projected growth, Q2 2026

Agriculture

Leading growth driver, alongside finance & transport

2027 AFCON

Infrastructure prep supporting near-term activity

Chart 2: Tanzania Quarterly Real GDP Growth, 2022 – 2026 (at 2019 prices)

Percent, year-on-year

Chart unavailable — see Table 2 below.

Table 2: Quarterly Real GDP Growth, 2022–2026 (%)
Year	Q1	Q2	Q3	Q4
2022	2.5	4.9	6.6	3.9
2023	4.0	3.4	6.2	7.2
2024	7.5	6.8	4.6	3.9
2025	4.3	7.5	6.3	5.5
2026	6.0	5.9 (proj.)	—	—

Source: National Bureau of Statistics and Bank of Tanzania computations (Chart 2.1a). Q2 2026 is BOT's projection based on high-frequency indicators.

Growth in Q1 2026 was driven primarily by agriculture, financial and insurance services, and transport and storage activities. BOT expects Q2 2026 momentum to hold up on the back of continued private sector credit expansion, reliable power supply, strong mineral production, sustained tourism resilience, ongoing strategic infrastructure investment, and preparations for the 2027 Africa Cup of Nations.

3. Inflation

4.0%

Headline inflation, June 2026 (May: 4.2%)

3.7%

Core inflation, June 2026 (highest in 2 years)

4.1%

Food inflation, June 2026 (May: 5.6%)

6.3%

Energy, fuel & utilities inflation, June 2026

Headline inflation remained within Tanzania's national 3–5 percent target range and regional (SADC/EAC) convergence benchmarks throughout the period. The easing from May to June 2026 was mainly due to moderating food prices on the back of the ongoing harvest, which partly offset a continued rise in core inflation.

Chart 3: Headline, Core and Energy Inflation, June 2025 – June 2026

Twelve-month percentage change

Chart unavailable — see Table 3 below.

Table 3: Headline, Core and Energy/Fuel/Utilities Inflation, Monthly (%)
Month	Headline	Core	Energy, Fuel & Utilities
Jun-2025	3.3	1.9	2.1
Jul-2025	3.3	1.9	1.0
Aug-2025	3.4	2.0	2.6
Sep-2025	3.4	2.2	3.7
Oct-2025	3.5	2.1	4.0
Nov-2025	3.4	2.3	3.8
Dec-2025	3.6	2.3	3.8
Jan-2026	3.3	2.2	5.2
Feb-2026	3.2	2.1	2.8
Mar-2026	3.2	2.2	2.1
Apr-2026	4.0	3.1	5.3
May-2026	4.2	3.4	5.0
Jun-2026	4.0	3.7	6.3

Source: National Bureau of Statistics and Bank of Tanzania computations (Tables A9(i) and A9(ii)).

Food security note: Food stocks held by the National Food Reserve Agency stood at 480,219 tonnes in June 2026, after releasing 16,812.3 tonnes of maize and paddy to traders — supporting the moderation in food inflation to 4.1 percent from 7.3 percent a year earlier.

4. Monetary Policy & Money Supply

In June 2026, BOT continued implementing the MPC's April 2026 decisions, holding the CBR at 5.75 percent and narrowing the interest rate corridor to ±150 basis points (4.25–7.25%) to strengthen policy transmission. The 7-day interbank cash market rate averaged 5.98 percent, close to the CBR, reflecting effective liquidity management. However, with core inflation rising from 2.2 percent in March to 3.7 percent in June 2026 — a sign of broadening second-round effects from the global supply shock — the MPC raised the CBR to 6.25 percent for Q3 2026 at its 2 July 2026 meeting.

Chart 4: Extended Broad Money (M3) and Private Sector Credit Stock, June 2025 – June 2026

TZS Trillion

Chart unavailable — see Table 4 below.

Table 4: Money Supply (M3) and Private Sector Credit Stock, Monthly (TZS Trillion)
Month	Extended Broad Money (M3)	Credit to Private Sector
Jun-2025	55.48	40.55
Jul-2025	56.29	40.97
Aug-2025	57.46	41.53
Sep-2025	57.85	42.00
Oct-2025	59.79	42.39
Nov-2025	60.86	43.39
Dec-2025	60.99	44.60
Jan-2026	62.11	45.17
Feb-2026	63.07	46.05
Mar-2026	64.25	47.22
Apr-2026	65.09	47.92
May-2026	66.80	49.03
Jun-2026	69.62	51.92

Source: Bank of Tanzania and banks (Table A3). M3 growth reached 25.5% y-o-y in June 2026 (25.2% in May); private sector credit growth accelerated to 28.1% y-o-y (23.2% in May).

Chart 5: Annual Credit Growth by Economic Activity, June 2026

Trade posted the strongest annual credit growth, followed by transport & agriculture

Chart unavailable — see Table 5 below.

Table 5: Annual Growth of Credit to Select Economic Activities (%)
Sector	Jun-25	Dec-25	Jun-26
Trade	21.3	49.7	59.5
Transport and communication	25.7	29.4	46.4
Agriculture	30.2	28.9	39.9
Personal	13.7	17.7	34.4
Building and construction	25.7	25.6	30.1
Mining and quarrying	20.8	91.1	21.8
Hotels and restaurants	22.5	2.5	8.3
Manufacturing	2.5	-8.2	0.9

Source: Banks and Bank of Tanzania (Table 2.3.2). Personal loans (largely supporting MSMEs) continue to hold the largest overall share of the credit portfolio, followed by trade and agriculture.

5. Interest Rates & Financial Markets

Banks' interest rates stayed relatively stable in June 2026. The overall lending rate eased to 15.20 percent from 15.32 percent in May, while the overall time deposit rate rose to 8.60 percent from 8.43 percent. The spread between one-year lending and deposit rates widened to 5.66 percentage points from 5.22 points.

Chart 6: Overall Lending Rate vs Overall Time Deposit Rate, June 2025 – June 2026

Percent per annum

Chart unavailable — see Table 6 below.

Table 6: Overall Lending and Time Deposit Rates, Monthly (%)
Month	Overall Lending Rate	Overall Time Deposit Rate
Jun-2025	15.23	8.74
Jul-2025	15.16	8.83
Aug-2025	15.07	8.61
Sep-2025	15.18	8.50
Oct-2025	15.19	8.36
Nov-2025	15.27	8.54
Dec-2025	15.24	8.36
Jan-2026	15.10	8.33
Feb-2026	15.11	8.32
Mar-2026	15.11	8.33
Apr-2026	15.33	8.54
May-2026	15.32	8.43
Jun-2026	15.20	8.60

Source: Banks and Bank of Tanzania computations (Table A4).

Chart 7: Treasury Bond Yield Curve, June 2026

Yield to maturity by tenor

Chart unavailable — see Table 7.

Table 7: Treasury Securities Auction Results, June 2026
Instrument	Detail
T-bill tender size	TZS 552.1 billion
T-bill bids received	TZS 1,295.9 billion
T-bill amount accepted	TZS 597.1 billion
Overall T-bill weighted avg. yield	4.83% (from 4.74%)
T-bond tender size (10 & 25-yr)	TZS 387.6 billion
T-bond bids received	TZS 1,539.6 billion
T-bond amount accepted	TZS 269.8 billion
10-year yield	10.39% (from 9.40%)
25-year yield	11.89% (from 11.99%)

Source: Bank of Tanzania (Section 2.5, Table A4). Both auctions were oversubscribed, reflecting strong investor appetite for government securities.

Money and forex markets: Interbank cash market turnover rose to TZS 2,508.7 billion in June 2026 (from TZS 1,732.7 billion in May), with the overall interbank rate easing to 6.0 percent. In the interbank foreign exchange market, turnover rose to USD 193.3 million (from USD 119.3 million), with BOT making a net sale of USD 28.5 million to smooth volatility. The shilling averaged TZS 2,633.73/USD in June 2026, depreciating just 0.08 percent year-on-year.

6. Government Budgetary Operations (Mainland)

Latest available actuals: May 2026 (cheques issued basis), against monthly targets under the 2025/26 budget.

Chart 8: Central Government Revenue vs Expenditure, May 2026

Actual vs monthly target, TZS Trillion

Chart unavailable — see Table 8 below.

Table 8: Central Government Budgetary Operations, May 2026 (TZS Trillion)
Item	Target	Actual	Performance
Total government revenue	3.242	3.259	100.5% of target
Central government revenue	3.110	3.152	101.4% of target
Tax revenue	2.615	2.750	105.2% of target
of which: Income tax	0.719	0.955	132.9% of target
of which: Taxes on imports	0.964	1.123	above target
Non-tax revenue	0.495	0.402	below target
Total expenditure	4.653	4.018	below target
Recurrent expenditure	—	2.881	—
Development expenditure	—	1.138	—
Overall balance (deficit)	-1.334	-0.418	narrower than targeted

Source: Ministry of Finance and Bank of Tanzania computations (Table A2). Figures for 2026 are provisional.

Tax revenue performance was strong, exceeding target by 5.2 percent, driven mainly by income tax collections which beat target by 32.9 percent — reflecting improved tax administration and compliance. Non-tax revenue underperformed its target. On expenditure, the Government kept spending below target, financing the resulting narrower deficit through a mix of domestic borrowing (TZS 0.376 trillion) and foreign financing (TZS 0.042 trillion).

7. External Sector Performance

USD 19,923.6M

Exports of goods & services, FY to Jun-26 (+17.2%)

USD 20,815.7M

Imports of goods & services, FY to Jun-26 (+18.1%)

USD 2,303.9M

Current account deficit, FY to Jun-26

4.4 months

Import cover from reserves (benchmark: 4 months)

Chart 9: Exports vs Imports of Goods & Services, Year Ending June (USD Million)

Chart unavailable — see Table 9 below.

Table 9: External Trade & Current Account, Year Ending June (USD Million)
Year Ending June	Exports (Goods & Services)	Imports (Goods & Services)	Current Account Balance
2024	14,410.9	16,144.9	-2,823.1
2025	17,001.3	17,629.8	-2,153.4
2026 (provisional)	19,923.6	20,815.7	-2,303.9

Source: Tanzania Revenue Authority, banks and Bank of Tanzania computations (Table 2.8.1).

Export growth was led by gold (the leading export, benefiting from elevated international prices), manufactured goods (iron and steel, glassware, textiles), and traditional crops (tobacco, cashew nuts, coffee). Import growth was driven by industrial supplies, refined petroleum products, machinery and capital goods — reflecting strong domestic demand and continued efforts to expand productive capacity.

Chart 10: Gross Official Foreign Exchange Reserves, 2018 – 2026 (USD Million)

Chart unavailable — see Table 10 below.

Table 10: Gross Official Reserves, Year-End (USD Million)
Year	Gross Reserves	Months of Import Cover
2018	5,044.6	4.9
2019	5,567.6	6.4
2020	4,767.7	5.6
2021	6,386.0	6.6
2022	5,177.2	4.7
2023	5,450.1	4.5
2024	5,546.9	4.5
2025	6,329.0	4.9
2026 (Jun)	5,673.5	4.4

Source: Bank of Tanzania (Table A1, Chart 2.8.1). Reserves supported by sustained gold export earnings and the domestic gold purchase programme.

8. Zanzibar's Economy

6.0%

Zanzibar headline inflation, June 2026

10.5%

Food inflation, June 2026

USD 1,023.2M

Current account surplus, FY to Jun-26 (+29.1%)

949,278

Tourist arrivals, FY to Jun-26 (+18.9%)

Chart 11: Zanzibar Inflation, June 2025 vs June 2026

Chart unavailable — see Table 11.

Table 11: Zanzibar Inflation, Annual Change (%)
Measure	Jun-25	May-26	Jun-26
Headline inflation	4.1	5.5	6.0
Food inflation	4.4	9.9	10.5
Non-food inflation	3.9	2.1	2.5

Source: Office of the Chief Government Statistician (Table 3.1.1).

Table 12: Zanzibar Government Budget, June 2026 (TZS Billion)
Item	Amount
Domestic revenue and grants	204.4 (77.5% of target)
Tax collections	160.1 (72.9% of target)
Non-tax revenue	17.0 (78.2% of target)
Total government expenditure	423.6
of which: Development expenditure	314.9
Overall fiscal deficit (financed by domestic borrowing)	219.2

Source: Ministry of Finance and Planning, Zanzibar (Section 3.2).

Zanzibar's external position strengthened notably, with the current account surplus growing 29.1 percent to USD 1,023.2 million, mainly on higher service receipts from tourism-related activities. Exports of goods and services grew 26.7 percent to USD 1,796.6 million, aided by an 18.9 percent rise in tourist arrivals to 949,278.

9. Outlook

Growth momentum intact: With BOT projecting 5.9 percent growth for Q2 2026 and strong credit expansion feeding private investment, Tanzania's near-term growth outlook remains solid — provided global energy prices don't spike again.

Inflation vigilance required: Core inflation's rise to 3.7 percent suggests second-round effects from the Middle East-driven supply shock are broadening. The CBR hike to 6.25 percent signals BOT is willing to act pre-emptively, which could gradually raise borrowing costs across the economy.

Widening trade gap: Imports are growing faster than exports (18.1% vs 17.2%), keeping the current account in deficit. Continued reliance on gold as the dominant export earner leaves the external position exposed to global gold price swings.

For a structural view of what stands between Tanzania and its Dira 2050 ambitions, see TICGL's related analyses on the policy gaps keeping USD 1 trillion out of reach, whether Tanzania's economy is truly growing, and why growth has not been sufficiently inclusive.

Muhtasari kwa Kiswahili

Muhtasari wa Taarifa ya Uchumi ya Tanzania, kutoka Taarifa ya Kila Mwezi ya BOT, Julai 2026

Ukuaji wa Uchumi: Pato la Taifa (GDP) liliongezeka kwa asilimia 6.0 katika robo ya kwanza ya 2026, kutoka asilimia 4.3 mwaka jana, likichagizwa na kilimo, huduma za fedha na bima, pamoja na usafirishaji na uhifadhi. BOT inatarajia ukuaji wa asilimia 5.9 katika robo ya pili ya 2026.

Mfumuko wa bei: Mfumuko wa bei ulipungua kidogo hadi asilimia 4.0 mwezi Juni 2026 kutoka asilimia 4.2 mwezi Mei, ukibaki ndani ya wigo wa lengo la taifa la asilimia 3–5. Hata hivyo, "core inflation" iliongezeka hadi asilimia 3.7 — kiwango cha juu zaidi katika miaka miwili.

Sera ya fedha: Kutokana na dalili za mfumuko wa bei kuenea, Benki Kuu iliongeza Riba ya Benki Kuu (CBR) kutoka asilimia 5.75 hadi asilimia 6.25 kwa robo ya tatu ya 2026, kuanzia tarehe 2 Julai 2026.

Mikopo na fedha: Ukuaji wa mikopo kwa sekta binafsi uliongezeka hadi asilimia 28.1 — kasi ya juu zaidi katika miaka ya hivi karibuni — ukichagizwa na biashara, usafirishaji, na kilimo.

Sekta ya nje: Nakisi ya urari wa malipo (current account deficit) iliongezeka hadi dola za Marekani milioni 2,303.9, kwani uagizaji wa bidhaa ulikua kwa kasi zaidi (asilimia 18.1) kuliko usafirishaji (asilimia 17.2). Akiba ya fedha za kigeni ilikuwa dola milioni 5,673.5, sawa na miezi 4.4 ya uagizaji bidhaa.

Zanzibar: Mfumuko wa bei Zanzibar uliongezeka hadi asilimia 6.0 mwezi Juni 2026, ukichagizwa na bei za vyakula na usafiri. Ziada ya urari wa malipo iliongezeka kwa asilimia 29.1 hadi dola milioni 1,023.2, ikichagizwa na ongezeko la watalii kwa asilimia 18.9.

Hitimisho: Uchumi wa Tanzania unaendelea kukua kwa kasi nzuri, lakini changamoto za mfumuko wa bei na nakisi ya biashara ya nje zinahitaji ufuatiliaji makini katika miezi ijayo.

Frequently Asked Questions

How fast is Tanzania's economy growing in 2026?

Real GDP grew 6.0 percent in Q1 2026, up from 4.3 percent a year earlier, with BOT projecting 5.9 percent growth for Q2 2026.

What is Tanzania's inflation rate in June 2026?

Headline inflation was 4.0 percent in June 2026, within the national 3–5 percent target band, though core inflation rose to 3.7 percent.

What is Tanzania's Central Bank Rate in 2026?

The CBR was held at 5.75 percent through Q2 2026, then raised to 6.25 percent for Q3 2026 effective 2 July 2026.

What is Tanzania's current account deficit?

The current account deficit widened to USD 2,303.9 million in the year ending June 2026, from USD 2,153.4 million a year earlier.

How much are Tanzania's foreign exchange reserves?

USD 5,673.5 million at end June 2026, covering 4.4 months of projected imports.

How is Zanzibar's economy performing in 2026?

Zanzibar's headline inflation rose to 6.0 percent while its current account surplus grew 29.1 percent to USD 1,023.2 million, driven by tourism.

Primary source: Bank of Tanzania, "Monthly Economic Review," July 2026 — Sections 1.0–3.3 and Statistical Tables A1–A10. This analysis is produced by TICGL/TERI for informational and research purposes and does not constitute investment advice.

Executive Summary

Zanzibar's economy showed a mixed but broadly positive picture in June 2026. Headline inflation rose to 6.0 percent, from 4.1 percent a year earlier, driven by higher food prices and rising transport costs linked to fuel prices — food inflation alone reached 10.5 percent. On the fiscal side, domestic revenue and grants reached TZS 204.4 billion against a monthly target, while government spending of TZS 423.6 billion produced an overall fiscal deficit of TZS 219.2 billion, financed through domestic borrowing.

The external sector was the standout performer: Zanzibar's current account surplus grew 29.1 percent to USD 1,023.2 million in the year ending June 2026, driven overwhelmingly by tourism. Tourist arrivals rose 18.9 percent to 949,278, pushing service export receipts up 24.7 percent and cementing tourism as the backbone of Zanzibar's external earnings. Exports of goods and services grew 26.7 percent to USD 1,796.6 million, while imports grew 23.1 percent to USD 785.7 million.

🏝️

Related TICGL Deep-Dive

What's Next for Tanzania's Economy? The Policy Gaps Keeping USD 1 Trillion Out of Reach by 2050

Zanzibar's tourism-led growth is a bright spot in the Union economy — but TICGL's flagship analysis examines the structural and policy gaps that stand between the whole of Tanzania and a USD 1 trillion economy by 2050.

Read the Full Analysis →

1. Inflation Developments

6.0%

Headline inflation, June 2026 (May: 5.5%)

10.5%

Food inflation, June 2026

2.5%

Non-food inflation, June 2026

1.0%

Month-on-month headline (Jun-26), up from 0.5% a year ago

Zanzibar's headline inflation climbed to 6.0 percent in June 2026, from 4.1 percent a year earlier, largely on higher food prices and rising transport costs linked to elevated fuel prices. By contrast, non-food inflation actually eased to 2.5 percent (from 3.9 percent a year earlier), with moderation in clothing/footwear, personal care and miscellaneous goods and services.

Chart 1: Zanzibar Headline, Food and Non-Food Inflation

Twelve-month percentage change

Chart unavailable — see Table 1 below.

Table 1: Zanzibar Inflation, Annual Change (%)
Measure	Jun-25	May-26	Jun-26
Headline inflation	4.1	5.5	6.0
Food	4.4	9.9	10.5
Non-food	3.9	2.1	2.5

Source: Office of the Chief Government Statistician (Table 3.1.1).

1.1 Inflation by Category, June 2026

Chart 2: Zanzibar CPI by Category, June 2026

Twelve-month percentage change, by COICOP group

Chart unavailable — see Table 2 below.

Table 2: Zanzibar CPI by Main Group, Annual Change (%)
Category	Weight (%)	Jun-25	May-26	Jun-26
Food and non-alcoholic beverages	41.9	5.0	9.7	10.3
Restaurants and accommodation services	1.4	0.6	7.4	7.4
Alcoholic beverages, tobacco and narcotics	0.2	-2.2	4.3	5.5
Transport	9.1	2.4	5.1	5.3
Furnishings, household equipment & maintenance	4.8	3.8	2.4	3.7
Personal care, social protection & misc.	1.7	4.8	0.8	0.8
Health	1.3	1.5	0.6	0.7
Housing, water, electricity, gas & other fuels	25.8	3.6	1.2	1.8
Clothing and footwear	6.3	5.0	1.6	1.4
Education	1.6	2.1	0.3	2.0
Recreation, sport and culture	1.1	5.1	2.6	2.0
Information and communication	4.2	2.8	0.1	-0.6
Insurance and financial services	0.5	0.0	0.0	0.0
All items (headline)	100.0	4.1	5.5	6.0

Source: Office of the Chief Government Statistician (Table 3.1.1). Base: July 2022 = 100.

Watch food and transport: Food (41.9% of the CPI basket) and restaurants/accommodation both accelerated sharply in the year to June 2026, while transport inflation stayed elevated on fuel costs — together these are the main drivers pulling Zanzibar's headline inflation above the 4-percent mark.

2. Government Budgetary Operations

In June 2026, Zanzibar's domestic revenue and grants reached TZS 204.4 billion, equivalent to 77.5 percent of the monthly target. Domestic revenue accounted for the largest share (86.6 percent), with the balance made up of grants. Tax collections reached TZS 160.1 billion (72.9 percent of target), with satisfactory performance in VAT and local excise duties, while non-tax revenue reached TZS 17 billion (78.2 percent of target).

Chart 3: Zanzibar Government Resources, June (TZS Billion)

2025 Actual vs 2026 Estimate vs 2026 Actual

Chart unavailable — see Table 3.

Table 3: Zanzibar Government Resources, June 2026 (TZS Billion)
Item	2025 Actual	2026 Estimate	2026 Actual
Tax on imports	30.4	31.5	26.4
VAT & excise duties (local)	43.5	46.9	47.5
Income tax	49.0	61.3	50.2
Other taxes	39.2	80.0	36.0
Non-tax revenue	20.5	21.8	17.0
Grants	2.3	22.4	27.3
Total resources	184.9	263.9	204.4

Source: Ministry of Finance and Planning, Zanzibar (Chart 3.2.1). "Other taxes" include hotel/restaurant levies, tour operator levy, revenue stamps, airport/seaport charges, road development fund, and petroleum levy.

Chart 4: Zanzibar Government Expenditure, June (TZS Billion)

2025 Actual vs 2026 Estimate vs 2026 Actual

Chart unavailable — see Table 4.

Table 4: Zanzibar Government Expenditure, June 2026 (TZS Billion)
Item	2025 Actual	2026 Estimate	2026 Actual
Wages and salaries	68.2	67.5	67.6
Other recurrent expenditure	92.6	55.1	41.1
Development expenditure	270.8	369.5	314.9
Total expenditure	431.6	492.1	423.6

Source: Ministry of Finance and Planning, Zanzibar (Chart 3.2.2). "Other recurrent expenditure" includes transfers, domestic debt interest, consolidated fund service and other charges.

Fiscal outcome: With expenditure of TZS 423.6 billion against resources of TZS 204.4 billion, Zanzibar recorded an overall fiscal deficit of TZS 219.2 billion in June 2026, financed entirely through domestic borrowing. Development spending (TZS 314.9 billion) made up 74 percent of total expenditure, underscoring continued heavy public investment.

3. External Sector Performance

USD 1,796.6M

Exports of goods & services, FY to Jun-26 (+26.7%)

USD 785.7M

Imports of goods & services, FY to Jun-26 (+23.1%)

USD 1,023.2M

Current account surplus, FY to Jun-26 (+29.1%)

949,278

Tourist arrivals, FY to Jun-26 (+18.9%)

Zanzibar's current account surplus grew 29.1 percent to USD 1,023.2 million in the year ending June 2026, from USD 792.4 million a year earlier — driven overwhelmingly by higher service receipts from tourism-related activities. The services account surplus reached USD 1,597.1 million (+24.5%), dwarfing the goods account deficit of USD 586.2 million.

Chart 5: Zanzibar Current Account Components, Year Ending June (USD Million)

2025 vs 2026 (provisional)

Chart unavailable — see Table 5.

Table 5: Zanzibar Current Account, Year Ending June (USD Million)
Item	2025	2026 (provisional)	% Change
Goods account (net)	-503.9	-586.2	16.3%
Services account (net)	1,283.3	1,597.1	24.5%
Goods & services (net)	779.4	1,010.9	29.7%
Primary income account (net)	11.6	10.3	-11.3%
Secondary income (net)	1.4	2.0	44.6%
Current account balance	792.4	1,023.2	29.1%

Source: Tanzania Revenue Authority, banks, and Bank of Tanzania computations (Table 3.3.1).

Chart 6: Zanzibar Exports vs Imports of Goods & Services, Year Ending June (USD Million)

Chart unavailable — see Table 5 above (Goods & Services rows) and Table 6 below.

Chart 7: Tourist Arrivals to Zanzibar, Year Ending June

Central driver of Zanzibar's services export growth

Chart unavailable — tourist arrivals grew 18.9% from approximately 798,384 (FY2025 est.) to 949,278 (FY2026).

3.1 Export Composition, Year Ending June 2026

Clove exports — Zanzibar's flagship traditional export — surged in value, more than doubling from a low base as unit prices rose 33.8 percent to USD 6,335.9 per tonne. Non-traditional exports (seaweed, manufactured goods, fish products) softened somewhat in value even as export volumes shifted, while "other exports" grew strongly.

Chart 8: Zanzibar Export Composition, FY 2026 (USD Million)

Chart unavailable — see Table 6.

Table 6: Zanzibar Exports of Goods, Year Ending June (USD Million)
Item	2025	2026 (provisional)	% Change
Clove (traditional export)	3.45	44.58	+1,192%
Seaweeds	3.22	1.74	-45.9%
Manufactured goods	15.39	10.76	-30.1%
Fish and fish products	1.18	0.89	-24.0%
Other exports	10.05	12.49	+24.2%
Grand total (goods exports)	33.29	70.46	+111.6%

Source: Tanzania Revenue Authority and Bank of Tanzania computations (Table 3.3.2).

3.2 Import Composition, Year Ending June 2026

Import growth was broad-based across categories: capital goods imports more than doubled (led by machinery, mechanical appliances and industrial transport equipment), consumer goods imports rose 45.6 percent (soap and detergents, textiles, footwear), while intermediate goods imports were roughly flat overall as a 35.7 percent drop in fuel and lubricant imports offset a 48.5 percent rise in industrial supplies.

Chart 9: Zanzibar Import Composition, FY 2026 (USD Million)

Chart unavailable — see Table 7.

Table 7: Zanzibar Imports of Goods, Year Ending June (USD Million)
Category	2025	2026 (provisional)	% Change
Capital goods	68.9	161.0	+133.7%
Intermediate goods	399.1	395.0	-1.0%
of which: Industrial supplies	123.2	183.0	+48.5%
of which: Fuel and lubricants	159.7	102.7	-35.7%
Consumer goods	69.1	100.6	+45.6%
Total imports (f.o.b)	537.2	656.7	+22.2%

Source: Tanzania Revenue Authority and Bank of Tanzania computations (Table 3.3.3).

4. Outlook

Tourism remains the growth engine: With arrivals up 18.9 percent and services receipts up 24.7 percent, tourism continues to be the single biggest driver of Zanzibar's external strength — an encouraging sign as global travel demand remains resilient despite Middle East-driven energy volatility.

Inflation needs monitoring: At 6.0 percent, Zanzibar's headline inflation now sits above Tanzania Mainland's 4.0 percent, driven by food and transport costs. Continued food price pressure could erode real incomes if not addressed through supply-side measures.

Fiscal deficit financed domestically: A TZS 219.2 billion monthly deficit financed entirely through domestic borrowing adds to Zanzibar's public debt burden over time; revenue mobilisation (currently below target on income tax and other taxes) will be key to narrowing this gap.

For the Mainland picture behind these numbers, see TICGL's companion analysis on the full Tanzania Economic Update for July 2026 and Tanzania's national debt position.

Muhtasari kwa Kiswahili

Muhtasari wa Uchumi wa Zanzibar, kutoka Taarifa ya Kila Mwezi ya BOT, Julai 2026

Mfumuko wa bei: Mfumuko wa bei Zanzibar uliongezeka hadi asilimia 6.0 mwezi Juni 2026, kutoka asilimia 4.1 mwaka jana, ukichagizwa na bei za vyakula (asilimia 10.5) na gharama za usafiri zinazohusiana na bei za mafuta.

Bajeti ya Serikali: Mapato ya ndani na ruzuku Zanzibar yalifikia Shilingi bilioni 204.4 mwezi Juni 2026 (asilimia 77.5 ya lengo), huku matumizi yakifikia Shilingi bilioni 423.6 — na kusababisha nakisi ya bajeti ya Shilingi bilioni 219.2, iliyofadhiliwa kwa mikopo ya ndani.

Sekta ya nje: Ziada ya urari wa malipo (current account surplus) iliongezeka kwa asilimia 29.1 hadi dola za Marekani milioni 1,023.2, ikichagizwa zaidi na mapato ya utalii. Idadi ya watalii iliongezeka kwa asilimia 18.9 hadi 949,278.

Biashara ya nje: Mauzo ya bidhaa na huduma nje yaliongezeka kwa asilimia 26.7 hadi dola milioni 1,796.6, huku uagizaji ukiongezeka kwa asilimia 23.1 hadi dola milioni 785.7. Zao la karafuu liliongoza mauzo, likiongezeka kwa kiasi kikubwa kutokana na ongezeko la bei za soko la dunia.

Hitimisho: Utalii unaendelea kuwa nguzo kuu ya uchumi wa Zanzibar, lakini changamoto ya mfumuko wa bei wa chakula na nakisi ya bajeti zinahitaji ufuatiliaji makini katika miezi ijayo.

Frequently Asked Questions

What is Zanzibar's inflation rate in June 2026?

Zanzibar's headline inflation rose to 6.0 percent in June 2026, from 4.1 percent a year earlier, driven mainly by food prices (10.5 percent) and transport costs.

How is Zanzibar's government budget performing?

Domestic revenue and grants reached TZS 204.4 billion in June 2026 (77.5% of target), against expenditure of TZS 423.6 billion, resulting in a TZS 219.2 billion deficit financed by domestic borrowing.

How much did Zanzibar's current account surplus grow?

It grew 29.1 percent to USD 1,023.2 million in the year ending June 2026, from USD 792.4 million a year earlier, driven by tourism receipts.

How important is tourism to Zanzibar's economy?

Tourist arrivals grew 18.9 percent to 949,278, and tourism is the dominant driver of Zanzibar's services account surplus and overall current account strength.

What does Zanzibar mainly export and import?

Exports are led by cloves and non-traditional exports (seaweed, manufactured goods, fish). Imports are dominated by intermediate goods, followed by capital and consumer goods.

Primary source: Bank of Tanzania, "Monthly Economic Review," July 2026 — Section 3.0 "Economic Performance in Zanzibar" and related statistical tables (Tables 3.1.1, 3.3.1–3.3.3, Charts 3.2.1–3.2.2). This analysis is produced by TICGL/TERI for informational and research purposes and does not constitute investment advice.

Executive Summary

Tanzania's economy carried strong growth momentum into the second quarter of 2026, with real GDP expanding 6.0 percent in Q1 2026 against 4.3 percent a year earlier, even as global energy and shipping costs stayed elevated on the back of the Middle East conflict. Headline inflation eased to 4.0 percent in June 2026, still comfortably inside the Bank of Tanzania's 3–5 percent target band, though core inflation's climb to 3.7 percent pushed the Monetary Policy Committee to raise the Central Bank Rate from 5.75 percent to 6.25 percent for Q3 2026.

On the debt side — the focus of this analysis — Tanzania's total national debt stock reached USD 50,595.8 million at the end of June 2026, essentially flat against May's USD 50,599.0 million. External debt made up 70.4 percent of that total at USD 35,606.1 million, with the central government responsible for the overwhelming majority of it. The currency mix remains heavily dollar-denominated, exposing the debt-service bill to shilling depreciation risk, while use-of-funds data shows financing concentrated in balance-of-payments/budget support, transport and telecommunication infrastructure, and social welfare and education.

This page unpacks the three debt breakdowns TICGL clients ask about most: who owes the money (by borrower), who lent it and in what currency, and what it was used for — set against the wider macroeconomic backdrop from the Bank of Tanzania's July 2026 Monthly Economic Review.

★

Related deep-dive: What's Next for Tanzania's Economy?

Before the numbers below, read TICGL's policy analysis on the structural gaps standing between Tanzania and its DIRA 2050 trillion-dollar economy ambition — essential context for interpreting today's debt and growth data.

Read the Policy Gap Analysis →

Macroeconomic Snapshot: Growth & Inflation

Real GDP in Mainland Tanzania grew 6.0 percent in Q1 2026 against 4.3 percent in Q1 2025, driven chiefly by agriculture, financial and insurance services, and transport and storage. The Bank of Tanzania projects Q2 2026 growth of around 5.9 percent, supported by private-sector credit expansion, stable power supply, strong mineral output, tourism resilience, and infrastructure investment ahead of AFCON 2027.

Quarterly Real GDP Growth, 2022–2026 (%)

At 2019 prices, Mainland Tanzania · Source: NBS & BOT computations

Headline, Food, Energy & Core Inflation (%)

June 2025 – June 2026 · Source: NBS & BOT computations

Table 1: Selected Macroeconomic Indicators, June 2026
Indicator	Jun-25	May-26	Jun-26
Headline inflation (%)	3.3	4.2	4.0
Core inflation (%)	1.9	3.4	3.7
Food inflation (%)	7.3	5.6	4.1
Energy, fuel & utilities inflation (%)	2.1	5.0	6.3
Central Bank Rate (%)	—	5.75	5.75 (raised to 6.25 from Q3 2026)
Overall lending rate (%)	15.23	15.32	15.20
Extended broad money M3 growth (y/y, %)	18.7	25.2	25.4
Private sector credit growth (y/y, %)	—	23.2	28.1
Exchange rate (TZS/USD, monthly avg.)	—	2,616.88	2,633.73

Source: Bank of Tanzania Monthly Economic Review, July 2026.

National Debt Overview

Tanzania's national debt — the combined external and domestic obligations of government and the private sector — stood at USD 50,595.8 million at the end of June 2026, marginally below May's USD 50,599.0 million. External debt accounted for 70.4 percent of the total, with domestic debt (denominated in Tanzanian shillings) making up the balance.

National Debt Stock Trend: External vs Domestic (USD Millions)

Monthly, June 2025 – June 2026 · Source: Ministry of Finance & Bank of Tanzania (Table A10)

Table 2: National Debt Stock, Monthly Trend (USD Millions)
Period	External Debt	Domestic Debt	Total Debt	TZS/USD (EOP)
Jun-25	34,765.3	13,631.1	48,396.3	2,604.6
Sep-25	35,642.2	15,407.9	51,050.1	2,442.8
Dec-25	35,528.8	15,485.0	51,013.8	2,447.5
Mar-26	35,886.2	14,917.3	50,803.5	2,577.4
Apr-26	36,506.1	15,117.6	51,623.7	2,602.0
May-26	35,553.3	15,045.7	50,599.0	2,609.2
Jun-26	35,606.1	14,989.7	50,595.8	2,623.5

Source: Ministry of Finance and Bank of Tanzania, Table A10, BOT Monthly Economic Review, July 2026.

Stable overall stock

Total national debt has held in a narrow USD 48.4–51.7 billion band over the past 13 months, suggesting disciplined overall borrowing even as individual components moved.

Domestic debt eased back

Domestic debt peaked near USD 15.7 billion in October 2025 and has since drifted down to USD 15.0 billion, partly a function of shilling movements against the dollar.

External debt dominates

External obligations consistently represent roughly seven of every ten dollars of national debt, keeping Tanzania's debt-service bill sensitive to global interest rates and the exchange rate.

External Debt Stock by Borrower

The external debt stock (public and private combined) rose marginally by 0.1 percent to USD 35,606.1 million at the end of June 2026. The central government remains by far the dominant borrower, holding 83.1 percent of the stock, with the private sector holding the remaining 16.9 percent. Public corporations carried no external debt in June 2026 — TANESCO, ATCL, TRC, TPA, TFC and DAWASA are recorded as having no outstanding external debt.

External Debt Stock by Borrower, June 2026

Share of total external debt stock (%)

External Debt by Borrower: 3-Month Trend

USD Millions · Jun-25, May-26, Jun-26

Table 3: External Debt Stock by Borrower (USD Millions)
Borrower	Jun-25 (Amount)	Share %	May-26 (Amount)	Share %	Jun-26 (Amount)	Share %
Central government	28,243.6	81.2	29,611.6	83.3	29,606.0	83.1
— Disbursed outstanding debt (DOD)	28,164.9	81.0	29,531.1	83.1	29,525.6	82.9
— Interest arrears	78.7	0.2	80.6	0.2	80.4	0.2
Private sector	6,517.9	18.7	5,941.7	16.7	6,000.1	16.9
— Disbursed outstanding debt (DOD)	5,884.3	16.9	5,739.5	16.1	5,761.9	16.2
— Interest arrears	633.6	1.8	202.3	0.6	238.3	0.7
Public corporations	3.8	0.0	0.0	0.0	0.0	0.0
External debt stock	34,765.3	100.0	35,553.3	100.0	35,606.1	100.0

Source: Ministry of Finance and Bank of Tanzania, Table 2.7.1, BOT Monthly Economic Review, July 2026. DOD = disbursed outstanding debt.

During June 2026, external loan disbursements totalled USD 379.8 million — mostly to the central government — against external debt service payments of USD 249.2 million, of which USD 184.9 million was principal repayment.

External Debt Stock by Creditor

Multilateral institutions continue to be Tanzania's largest external creditor group, holding 59.3 percent of the external debt stock in June 2026 — up from 56.8 percent a year earlier — followed by commercial lenders at 34.4 percent, bilateral creditors at 4.3 percent, and export credit agencies at 1.9 percent.

External Debt by Creditor Category, June 2026

Share of total external debt stock (%)

Creditor Composition Trend (%)

Jun-25 → May-26 → Jun-26

Table 4: External Debt Stock by Creditor Category (USD Millions)
Creditor	Jun-25	Share %	May-26	Share %	Jun-26	Share %
Multilateral	19,756.7	56.8	20,977.6	59.0	21,122.7	59.3
Bilateral	1,507.8	4.3	1,558.5	4.4	1,529.3	4.3
Commercial	12,439.1	35.8	12,331.1	34.7	12,261.4	34.4
Export credit	1,061.7	3.1	686.2	1.9	692.7	1.9
External debt stock	34,765.3	100.0	35,553.4	100.0	35,606.1	100.0

Source: Ministry of Finance and Bank of Tanzania, Table 2.7.2, BOT Monthly Economic Review, July 2026.

Disbursed Outstanding Debt by Use of Funds

Breaking the disbursed outstanding external debt down by what it actually financed shows Balance of Payments and budget support leading at 22.1 percent, closely followed by transport and telecommunication at 22.0 percent — together nearly 45 percent of all disbursed external debt. Social welfare and education (19.5%) and energy and mining (12.8%) round out the largest categories, while tourism remains the smallest recipient at just 1.7 percent.

Disbursed Outstanding Debt by Use of Funds (% Share)

Jun-25 vs May-26 vs Jun-26 · Source: Table 2.7.3, BOT Monthly Economic Review

Table 5: Disbursed Outstanding Debt by Use of Funds (Percentage Share)
Activity	Jun-25	May-26	Jun-26	Trend
Balance of Payments & budget support	21.9	22.3	22.1	▲ Largest use
Transport & telecommunication	21.1	22.1	22.0	▲
Social welfare & education	19.9	19.5	19.5	◆ Stable
Energy & mining	13.0	12.4	12.8	◆ Stable
Real estate & construction	4.4	5.1	5.1	▲
Agriculture	5.3	5.4	5.3	◆ Stable
Finance & insurance	4.1	4.2	4.2	◆ Stable
Other	5.1	4.6	4.6	▼
Industries	3.5	2.8	2.8	▼
Tourism	1.7	1.7	1.7	◆ Stable, smallest
Total	100.0	100.0	100.0	—

Source: Ministry of Finance and Bank of Tanzania, Table 2.7.3, BOT Monthly Economic Review, July 2026.

Infrastructure-heavy portfolio

Transport, telecommunication, energy and mining together absorb over a third of disbursed debt — consistent with Tanzania's strategic infrastructure investment agenda.

BoP support still large

Nearly a quarter of external debt exists to support the balance of payments and government budget directly, rather than a specific physical asset.

Tourism under-leveraged

Despite tourism being a top foreign-exchange earner (see external sector data below), it draws the smallest share of external financing at 1.7 percent.

Disbursed Outstanding Debt by Currency Composition

Currency risk in Tanzania's external debt portfolio remains concentrated. The US Dollar accounted for 66.2 percent of disbursed outstanding debt in June 2026 — up slightly from 65.9 percent in May — followed by the Euro at 17.4 percent and the Chinese Yuan at 6.7 percent. All other currencies combined made up just 9.8 percent.

Currency Composition, June 2026

Share of disbursed outstanding external debt (%)

Currency Composition Trend (%)

Jun-25 → May-26 → Jun-26

Table 6: Disbursed Outstanding Debt by Currency Composition (Percentage Share)
Currency	Jun-25	May-26	Jun-26
United States Dollar	66.0	65.9	66.2
Euro	17.7	17.5	17.4
Chinese Yuan	6.4	6.6	6.7
Other currencies	9.9	9.9	9.8
Total	100.0	100.0	100.0

Source: Ministry of Finance and Bank of Tanzania, Table 2.7.4, BOT Monthly Economic Review, July 2026.

Two-thirds of Tanzania's external debt service bill moves directly with the US Dollar–Shilling exchange rate. With the shilling depreciating 0.08 percent year-on-year to June 2026 and averaging TZS 2,633.73/USD in June, dollar-denominated obligations remain the single largest currency exposure in the portfolio.

Domestic Debt Developments

Government's domestic debt stock rose marginally to TZS 39,325.85 billion at the end of June 2026, up from TZS 39,257.3 billion in May. Government securities (Treasury bills, bonds and stocks) make up 84.7 percent of domestic debt, with the overdraft facility with the Bank of Tanzania constituting the largest slice of non-securitized debt. Commercial banks (28.8%) and pension funds (26.4%) remain the government's largest domestic creditors.

Domestic Debt Stock Growth, 2018–2026

TZS Billions, end of June each year · Source: Ministry of Finance

Domestic Debt by Creditor Category, June 2026

Share of domestic debt stock (%)

Table 7: Government Domestic Debt by Creditor Category (TZS Billions)
Category	Jun-25	Share %	May-26	Share %	Jun-26	Share %
Commercial banks	10,161.5	28.6	11,149.8	28.4	11,320.8	28.8
Pension funds	9,265.7	26.1	10,441.4	26.6	10,399.0	26.4
Bank of Tanzania	7,174.1	20.2	7,455.1	19.0	7,197.1	18.3
Others (public institutions, private, individuals, non-residents)	6,420.4	18.1	7,381.7	18.8	7,547.4	19.2
Insurance	1,843.0	5.2	2,030.7	5.2	2,022.8	5.1
BOT's special funds	638.1	1.8	798.4	2.0	838.6	2.1
Domestic debt stock (excl. liquidity papers)	35,502.8	100.0	39,257.3	100.0	39,325.8	100.0

Source: Ministry of Finance and Bank of Tanzania, Table 2.7.6, BOT Monthly Economic Review, July 2026.

External Sector Performance & Reserves

The current account deficit widened to USD 2,303.9 million in the year ending June 2026, from USD 2,153.4 million a year earlier, as import growth (+18.1% to USD 20,815.7 million) outpaced export growth (+17.2% to USD 19,923.6 million). Gold remained the standout export performer, and gross official foreign exchange reserves closed June 2026 at USD 5,673.5 million — equivalent to 4.4 months of projected imports, above the four-month national benchmark.

Exports vs Imports of Goods & Services

Year ending June, USD Millions

Top Export Commodities, Year Ending June 2026

USD Millions · Source: Table 2.8.2

Table 8: Current Account Summary (USD Millions)
Item	Year ending June 2025	Year ending June 2026 (p)	% Change
Goods account balance	-4,580.0	-5,657.7	23.5
Services account balance	3,951.4	4,765.6	20.6
Exports of goods and services	17,001.3	19,923.6	17.2
Imports of goods and services	17,629.8	20,815.7	18.1
Primary income balance	-2,011.4	-1,773.2	-11.8
Secondary income balance	486.6	361.4	-25.7
Current account balance	-2,153.4	-2,303.9	7.0

Source: Tanzania Revenue Authority, banks, and Bank of Tanzania, Table 2.8.1, BOT Monthly Economic Review, July 2026.

What This Means for Investors & Policymakers

Debt sustainability looks manageable

National debt has held broadly steady for over a year and reserves comfortably exceed the four-month import cover benchmark — a reassuring signal for sovereign risk assessments.

Dollar exposure needs active hedging

With 66.2 percent of external debt in USD, any renewed dollar strength or shilling weakness will directly raise the shilling cost of debt service — a key variable for PPP and infrastructure financing structures.

Infrastructure financing dominates

Nearly 35 percent of external debt use of funds sits in transport, telecommunication, energy and mining — sectors where TICGL's PPP advisory work is most active.

Multilateral reliance is rising

Multilateral creditors' share climbed from 56.8% to 59.3% year-on-year, generally favourable given typically concessional terms relative to commercial borrowing.

Widening current account deficit

Import growth continues to outpace exports, reinforcing the case for export diversification beyond gold and stronger domestic value addition.

Rate environment tightening

The MPC's move to 6.25 percent for Q3 2026 signals vigilance on second-round inflation effects — relevant for anyone modelling local-currency financing costs.

Executive Summary

Government's domestic debt stock rose marginally to TZS 39,325.85 billion at the end of June 2026, up from TZS 39,257.3 billion in May 2026 and roughly triple the TZS 13,228.2 billion recorded in June 2018. Unlike external debt — which is dominated by multilateral and bilateral development partners — domestic debt is financed almost entirely by Tanzanian financial institutions and the Bank of Tanzania itself.

Commercial banks are the single largest creditor group, holding 28.8 percent (TZS 11,320.8 billion) of the domestic debt stock in June 2026, followed closely by pension funds at 26.4 percent (TZS 10,399.0 billion). The Bank of Tanzania itself holds 18.3 percent (TZS 7,197.1 billion) — largely through the overdraft facility extended to government — while insurance companies and BOT's special funds together add a further 7.2 percent. The remaining 19.2 percent sits with "other" holders: public institutions, private companies, individuals, and non-resident investors.

By instrument, government securities — dominated by Treasury bonds — account for 84.7 percent of the stock, with the government's overdraft facility with the central bank making up nearly all of the remaining 15.3 percent. This page walks through each of these breakdowns in detail, with the full underlying data tables from the Bank of Tanzania's July 2026 Monthly Economic Review.

↔

Companion analysis: Tanzania's External Debt, Decoded

This page covers domestic debt. For the external side of Tanzania's national debt position — by borrower, creditor, currency and use of funds — read our companion analysis.

Read the External Debt Analysis →

Government Domestic Debt by Creditor Category

Six categories of creditor hold Tanzania's government domestic debt. Commercial banks lead the field, edging up from 28.4 percent in May 2026 to 28.8 percent in June — the highest reading of the past year — as banks continue to treat government securities as a core, low-risk, liquid asset. Pension funds sit close behind at 26.4 percent, having eased slightly from a 26.6 percent peak in May, reflecting their structural role as long-duration buyers of Treasury bonds matched against long-term pension liabilities.

The Bank of Tanzania's own exposure — chiefly the overdraft facility used to smooth government cash-flow timing — has been trending down, from 20.2 percent in June 2025 to 18.3 percent in June 2026, even as the absolute overdraft balance rose (see the instrument breakdown below). Insurance companies hold a stable 5.1 percent, and BOT's special funds a small but rising 2.1 percent. The fastest-growing bucket is "Others" — public institutions, private companies, individuals and non-residents — up from 18.1 percent to 19.2 percent over the year, pointing to broadening retail and institutional participation in government securities.

Domestic Debt by Creditor Category, June 2026

Share of domestic debt stock (excl. liquidity papers), %

Domestic Debt by Creditor Category, June 2026

TZS Billions, absolute holdings

Table 1: Government Domestic Debt by Creditor Category (TZS Billions)
Creditor Category	Jun-25	Share %	May-26	Share %	Jun-26	Share %
Commercial banks	10,161.5	28.6	11,149.8	28.4	11,320.8	28.8
Pension funds	9,265.7	26.1	10,441.4	26.6	10,399.0	26.4
Bank of Tanzania	7,174.1	20.2	7,455.1	19.0	7,197.1	18.3
Others (public institutions, private companies, individuals, non-residents)	6,420.4	18.1	7,381.7	18.8	7,547.4	19.2
Insurance	1,843.0	5.2	2,030.7	5.2	2,022.8	5.1
BOT's special funds	638.1	1.8	798.4	2.0	838.6	2.1
Domestic debt stock (excl. liquidity papers)	35,502.8	100.0	39,257.3	100.0	39,325.8	100.0

Source: Ministry of Finance and Bank of Tanzania, Table 2.7.6, BOT Monthly Economic Review, July 2026.

Banks remain the anchor creditor

At 28.8 percent, commercial banks hold more government debt than any other single category — a reminder that bank balance sheets and sovereign risk are closely intertwined in Tanzania.

Pension funds are near-equal partners

Pension funds' 26.4 percent share means retirement savings are a major, structurally stable source of government financing — but also ties pension solvency to sovereign credit quality.

BOT's direct exposure is easing — in share terms

The central bank's share has fallen almost two full percentage points year-on-year, even though its overdraft balance in absolute terms has grown (see Table 2 below).

Creditor Mix: How It Has Shifted

Viewed as a 12-month trend, three patterns stand out: commercial banks' share has been the most volatile but ends the period at its highest point; the Bank of Tanzania's share has declined steadily; and the "Others" category has grown the most consistently, suggesting government securities are reaching an increasingly diverse investor base beyond the traditional banking and pension sector.

Creditor Category Share Trend (%)

Jun-25 → May-26 → Jun-26 · Source: Table 2.7.6, BOT Monthly Economic Review

Creditor Holdings, Stacked View (TZS Billions)

Composition of the full domestic debt stock across the three most recent periods

Domestic Debt by Borrowing Instrument

Alongside who holds the debt, it is worth seeing how it was raised. Government securities — Treasury bonds, Treasury bills, government stocks and tax certificates combined — made up 84.7 percent of the domestic debt stock in June 2026, with Government bonds alone accounting for 79.9 percent, confirming that Tanzania's domestic debt is overwhelmingly long-duration and market-based rather than short-term. The remaining 15.3 percent is non-securitized debt, almost entirely the overdraft facility with the Bank of Tanzania (TZS 6,011.4 billion in June 2026, up from TZS 5,314.0 billion a year earlier).

Domestic Debt by Instrument, June 2026

Share of domestic debt stock (%)

Instrument Mix Trend (%)

Jun-25 → May-26 → Jun-26

Table 2: Government Domestic Debt by Borrowing Instrument (TZS Billions)
Instrument	Jun-25	Share %	May-26	Share %	Jun-26	Share %
Government securities	30,170.4	85.0	33,610.9	85.6	33,314.4	84.7
— Treasury bills	2,001.3	5.6	1,562.8	4.0	1,757.5	4.5
— Government stocks	187.1	0.5	135.7	0.3	135.7	0.3
— Government bonds	27,982.0	78.8	31,912.3	81.3	31,421.2	79.9
— Tax certificates	0.1	0.0	0.1	0.0	0.1	0.0
Non-securitized debt	5,332.4	15.0	5,646.4	14.4	6,011.4	15.3
— Overdraft (with Bank of Tanzania)	5,314.0	15.0	5,646.4	14.4	6,011.4	15.3
— Other liabilities	18.4	0.1	0.0	0.0	0.0	0.0
Domestic debt stock (excl. liquidity papers)	35,502.8	100.0	39,257.3	100.0	39,325.8	100.0

Source: Ministry of Finance and Bank of Tanzania, Table 2.7.5, BOT Monthly Economic Review, July 2026.

Reading Tables 1 and 2 together: the Bank of Tanzania's 18.3 percent creditor share is made up almost entirely of the overdraft facility, not government securities holdings — meaning its exposure is a short-term cash-management tool rather than a market investment position, even though the balance has grown year-on-year.

Eight-Year Growth of Domestic Debt, 2018–2026

Tanzania's domestic debt stock has nearly tripled since June 2018, rising from TZS 13,228.2 billion to TZS 39,325.8 billion in June 2026. Growth accelerated sharply between June 2020 and June 2023 — a period that coincided with pandemic-related fiscal pressure and a deliberate policy shift toward deepening the domestic securities market — before moderating to single-digit annual growth over the past two years.

Government Domestic Debt Stock, June 2018 – June 2026

TZS Billions, end of June each year (latest two points: May-26 and Jun-26) · Source: Ministry of Finance

Table 3: Government Domestic Debt Stock, 2018–2026 (TZS Billions)
Period	Jun-18	Jun-19	Jun-20	Jun-21	Jun-22	Jun-23	Jun-24	Jun-25	May-26	Jun-26
Domestic debt stock	13,228.2	14,863.1	15,587.7	18,934.3	24,039.8	28,927.1	31,938.2	35,502.8	39,257.3	39,325.8

Source: Ministry of Finance, Chart 2.7.1, BOT Monthly Economic Review, July 2026.

June 2026 Financing Activity

In June 2026 alone, government mobilised TZS 468 billion from the domestic market through new security issuance — TZS 273.3 billion in Treasury bonds and TZS 194.7 billion in Treasury bills. Against this, domestic debt service payments totalled TZS 1,551.5 billion, comprising TZS 1,264.4 billion in principal repayments and TZS 287.1 billion in interest — a reminder that gross issuance each month is substantially smaller than the roll-over and interest burden the stock already carries.

New issuance, June 2026

TZS 468.0 billion raised: TZS 273.3bn in Treasury bonds (58.4%) and TZS 194.7bn in Treasury bills (41.6%).

Debt service, June 2026

TZS 1,551.5 billion paid out: TZS 1,264.4bn principal (81.5%) and TZS 287.1bn interest (18.5%).

Net financing gap

Debt service outpaced new issuance by more than 3-to-1 in June — the difference is met through the stock of outstanding securities rolling over and the overdraft facility.

What This Means for Banks, Pension Funds & Policy

Watch for crowding-out signals

With commercial banks holding 28.8 percent of government debt, sustained heavy issuance could compete with credit to the private sector for balance-sheet space — worth monitoring alongside the 28.1 percent private-sector credit growth reported for June 2026.

Pension fund concentration risk

Pension funds' 26.4 percent exposure to government paper means fund solvency and sovereign credit risk are closely linked — a standard feature of frontier markets, but one that merits ongoing asset-liability monitoring.

Diversifying the investor base is a positive sign

The rising "Others" category (19.2 percent, including non-residents) suggests Tanzania's domestic securities market is broadening beyond banks and pension funds — generally a healthy sign for market depth and liquidity.

Overdraft reliance bears watching

The BOT overdraft facility grew from TZS 5,314.0bn to TZS 6,011.4bn year-on-year — a short-term liquidity tool, but one whose growing absolute size is worth tracking against statutory limits.

Long-duration financing dominates

With Treasury bonds at 79.9 percent of the stock, government has locked in long-term financing terms, reducing near-term rollover risk relative to a bill-heavy structure.

Steady long-run growth, moderating pace

After a rapid build-up from 2020–2023, domestic debt growth has slowed to low single digits over the past year — a signal of increasing fiscal discipline on the domestic financing side.

Executive Summary

Tanzania's external position stayed broadly resilient in the year ending June 2026 despite a difficult global backdrop — the prolonged Middle East conflict kept energy prices and freight costs elevated for much of the period. Strong gold prices, resilient tourism and firmer regional trade lifted export earnings, but import growth outpaced exports, widening the current account deficit to USD 2,303.9 million, up 7.0 percent from USD 2,153.4 million a year earlier.

On the export side, services receipts rose 14.4 percent to USD 8,140.9 million, powered by travel (tourism) receipts of USD 4,405.5 million — still Tanzania's single largest services export category — on the back of an 18.9 percent jump in tourist arrivals to 949,278 (Zanzibar) and a 4.5 percent rise to 2,291,479 for the Mainland. Transport receipts also grew strongly, tracking rising transit cargo volumes through Tanzania's corridors.

On the import side, services payments rose a more modest 6.7 percent to USD 3,375.3 million, driven chiefly by higher freight payments linked to elevated global shipping costs and greater merchandise import volumes. Gross official reserves closed the period at USD 5,673.5 million — 4.4 months of import cover, comfortably above the four-month national benchmark.

↔

Companion analysis: Tanzania's External Debt, Decoded

See how the current account deficit shown here interacts with Tanzania's external debt position — by borrower, creditor, currency and use of funds.

Read the External Debt Analysis →

🏦

Companion analysis: Who Finances Government Domestically?

Explore Tanzania's TZS 39.3 trillion domestic debt stock by creditor category — banks, pension funds, BOT and more.

Read the Domestic Debt Analysis →

Current Account: Full Breakdown

The current account is the sum of four sub-balances: the goods account, the services account, the primary income account (compensation of employees, investment income), and the secondary income account (transfers such as remittances and grants). In the year ending June 2026, only the services and secondary income balances were in surplus — the goods account deficit widened sharply enough to push the overall current account further into deficit.

Current Account Components, Year Ending June (USD Millions)

2025 vs 2026(p) · Source: Table 2.8.1

Monthly Current Account Balance (USD Millions)

Jun-25, May-26, Jun-26

Table 1: Current Account Summary (USD Millions)
Item	Jun-25	May-26	Jun-26	YE Jun-2025	YE Jun-2026 (p)	% Change
Goods account	-349.7	-771.8	-595.7	-4,580.0	-5,657.7	23.5
— Exports	913.9	963.3	1,069.8	9,885.9	11,782.7	19.2
— Imports	1,263.6	1,735.1	1,665.5	14,465.9	17,440.4	20.6
Services account	404.6	368.7	488.7	3,951.4	4,765.6	20.6
— Receipts	654.4	647.5	743.8	7,115.4	8,140.9	14.4
— Payments	249.8	278.8	255.1	3,163.9	3,375.3	6.7
Goods and services balance	54.9	-403.1	-107.0	-628.5	-892.1	41.9
Primary income account	-184.2	-136.9	-126.7	-2,011.4	-1,773.2	-11.8
Secondary income account	36.8	55.3	47.9	486.6	361.4	-25.7
Current account balance	-92.5	-484.7	-185.8	-2,153.4	-2,303.9	7.0

Source: Tanzania Revenue Authority, banks, and Bank of Tanzania, Table 2.8.1, BOT Monthly Economic Review, July 2026.

Goods deficit is the main driver

The goods account deficit alone widened by USD 1,077.7 million year-on-year — more than explaining the entire increase in the current account deficit.

Services remain a reliable offset

The services surplus grew 20.6 percent to USD 4,765.6 million, cushioning close to half of the goods deficit.

Primary income deficit is narrowing

Lower interest and investment income payments to non-residents cut the primary income deficit by 11.8 percent — a rare bright spot.

Exports: Services Receipts by Category

Service exports increased 14.4 percent to USD 8,140.9 million in the year ending June 2026, up from USD 7,115.4 million a year earlier. Travel (tourism) is by far the largest category, contributing USD 4,405.5 million — 54.1 percent of all services receipts — supported by a 4.5 percent rise in Mainland international tourist arrivals to 2,291,479. Transport receipts followed at USD 3,230.9 million (39.7 percent), firming on rising freight earnings from transit cargo through Tanzania's regional transport corridors. Other services — construction, insurance, financial, telecommunication, computer and information, government, personal and other business services — contributed the remaining USD 504.5 million (6.2 percent).

Services Receipts by Category, Year Ending June 2026(p)

Share of total services receipts (%)

Services Receipts by Category: 3-Year Trend

USD Millions, Year ending June

Table 2: Services Receipts by Category (USD Millions, Year Ending June)
Category	2024	2025	2026(p)	Share of 2026 total
Travel (Tourism)	3,679.7	4,096.5	4,405.5	54.1%
Transport	2,304.3	2,538.3	3,230.9	39.7%
Other services	594.6	480.6	504.5	6.2%
Total services receipts	4,578.6	7,115.4	8,140.9	100.0%

Source: Banks and Bank of Tanzania computations, Chart 2.8.3, BOT Monthly Economic Review, July 2026. Note: "Other services" includes construction, insurance, financial, telecommunication, computer and information, charges for the use of intellectual property, government, personal, and other business services.

On a monthly basis, service receipts rose to USD 743.8 million in June 2026, up from USD 654.4 million in June 2025 — a reminder that tourism and transport earnings are the fastest-growing pillars of Tanzania's export base, alongside gold.

Exports of Goods: Context

Goods exports rose 19.2 percent to USD 11,782.7 million, continuing to be led by gold (USD 5,522.9 million), which benefited from elevated international gold prices. Manufactured goods, tobacco, cashew nuts and coffee all posted solid gains, aided by favourable commodity prices and strengthening regional demand.

Top Export Commodities of Goods, Year Ending June 2026(p)

USD Millions · Source: Table 2.8.2, BOT Monthly Economic Review

Imports: Services Payments by Category

Service payments rose a more moderate 6.7 percent to USD 3,375.3 million in the year ending June 2026, from USD 3,163.9 million a year earlier — a much slower pace than the 14.4 percent growth in services receipts. The Bank of Tanzania attributes the rise chiefly to higher freight payments, consistent with elevated global shipping costs, continued disruptions to maritime transport, and the increase in merchandise imports. On a monthly basis, service payments rose to USD 255.1 million in June 2026 from USD 249.8 million in June 2025.

To show how services payments split by category, TICGL draws on the Bank of Tanzania's calendar-year Balance of Payments series, which separately tracks Transport, Travel and Other services debits. On this basis, Transport is consistently the largest services payment category — reflecting Tanzania's reliance on imported freight, shipping and international transport services — followed by Other services and Travel.

Services Payments (Debit) by Category, 2025(p)

Share of total services debit (%) · Calendar year

Services Payments by Category: 5-Year Trend

USD Millions · Calendar years 2021–2025

Table 3: Services Payments (Debit) by Category (USD Millions, Calendar Year)
Category	2021	2022	2023	2024(r)	2025(p)
Transport	-806.4	-1,378.4	-1,326.4	-1,411.9	-1,467.3
Travel	-196.2	-357.5	-477.2	-522.3	-715.5
Other	-604.4	-729.5	-592.3	-860.9	-1,059.1
Total services debit	-1,607.0	-2,465.4	-2,395.9	-2,795.0	-3,241.8

Source: Bank of Tanzania, Table A5 (Tanzania Balance of Payments), BOT Monthly Economic Review, July 2026. Figures are calendar-year balance of payments data, presented as debits (negative values); r denotes revised data, p denotes provisional data. This calendar-year series is shown here because it is the most reliable disaggregation of services payments by category currently published; it complements the fiscal year-ending-June totals in Table 1 and the text above.

Note on data: the Bank of Tanzania's July 2026 Monthly Economic Review reports a fiscal-year (year-ending-June) total for services payments of USD 3,375.3 million, which TICGL treats as the authoritative aggregate figure used throughout this page. The category-level split shown in Table 3 and the charts above uses the Bank's separately published calendar-year Balance of Payments series (Table A5) for Transport, Travel and Other services debits, since it is the cleanest disaggregated source available for this breakdown.

Freight costs are the swing factor

Transport payments have grown faster than any other services payment category over the past five years, tracking global shipping cost cycles.

Travel payments are rising too

Outbound travel spending has more than tripled since 2021, reflecting both currency effects and growing outbound travel demand.

Receipts still comfortably exceed payments

At roughly 2.4 times the size of payments, Tanzania's services trade surplus remains a structural strength of the external account.

Imports of Goods: Context

Goods imports rose 20.6 percent to USD 17,440.4 million, driven mainly by higher imports of industrial supplies, refined petroleum products and capital goods. Refined white petroleum products — 16.2 percent of total goods imports — rose 19.5 percent to USD 2,826.9 million, reflecting elevated global oil prices amid continued Middle East tensions.

Top Import Categories of Goods, Year Ending June 2026(p)

USD Millions · Source: Table 2.8.4, BOT Monthly Economic Review

Foreign Exchange Reserves & Import Cover

Despite the widening current account deficit, gross official foreign exchange reserves remained at a healthy level, closing June 2026 at USD 5,673.5 million — supported by sustained gold export earnings and the Bank of Tanzania's domestic gold purchase programme. This is equivalent to 4.4 months of projected imports of goods and services, above both the national four-month benchmark and comfortably within regional convergence norms.

Gross Official Foreign Exchange Reserves & Import Cover

USD Millions (bars) and Months of Import Cover (line), Fiscal Years 2018–2026

Table 4: Gross Official Reserves & Import Cover
Period	2018	2019	2020	2021	2022	2023	2024	2025	2026 (Jun, p)
Gross reserves (USD Millions)	5,044.6	5,567.6	4,767.7	6,386.0	5,177.2	5,450.1	5,546.9	6,329.0	5,673.5
Import cover (months)	4.9	6.4	5.6	6.6	4.7	4.5	4.5	4.9	4.4

Source: Bank of Tanzania, Table A1 and Table 2.8.1, BOT Monthly Economic Review, July 2026.

What This Means for Investors & Policy

Tourism is doing the heavy lifting

At 54.1 percent of services receipts and rising, tourism is now Tanzania's single most important services export — infrastructure and marketing investment here has outsized returns.

Freight costs are an external risk to watch

Transport payments track global shipping cycles outside Tanzania's control; a renewed spike in freight rates would widen the services and current account deficits further.

Reserves buffer remains adequate

4.4 months of import cover gives policymakers room to manage shocks, though the buffer has thinned slightly from 4.9 months in the prior fiscal year.

Goods trade deficit is the structural issue

With the goods account deficit driving the entire current account widening, diversifying and adding value to merchandise exports remains the highest-leverage policy lever.

Export diversification beyond gold

While gold dominates goods exports, manufactured goods, tobacco, cashew nuts and coffee are all growing — a base worth building on for resilience against gold price cycles.

Services surplus is a genuine cushion

A services trade surplus of roughly USD 4.8 billion offsets nearly half the goods deficit — underscoring why tourism and transport/logistics policy matter for macro stability, not just sector growth.

Executive Summary

Tanzania's headline inflation eased slightly to 4.0 percent in June 2026, from 4.2 percent in May, remaining inside the national 3–5 percent target band but still well above the 3.3 percent recorded a year earlier. At first glance this looks like a currency story — inflation normally rises when a currency weakens and imports become more expensive. But the shilling depreciated by only 0.08 percent on an annual basis to June 2026, among the most stable currency performances in the region over the period. The real driver is different: a global oil price shock tied to the Middle East conflict pushed crude oil from roughly USD 63.7/barrel in January 2026 to USD 103.9/barrel by April 2026 (+63%), feeding directly into Tanzania's energy, fuel and transport costs largely independent of the exchange rate.

The result is a clear split in the inflation data: transport inflation surged to 13.6 percent year-on-year in June 2026 (from 1.6% a year earlier) and energy, fuel and utilities inflation reached 6.3 percent, while food inflation actually fell to 4.1 percent (from 7.3% a year earlier) as the domestic harvest improved supply. Crucially, core inflation — which strips out volatile food and energy — rose to 3.7 percent, its highest level in two years, and became the single largest contributor to headline inflation (2.7 percentage points), signalling that the oil shock has started spreading into second-round price effects across the wider economy. This is precisely why the Monetary Policy Committee raised the Central Bank Rate from 5.75 percent to 6.25 percent effective 2 July 2026 — not to defend an already-stable currency, but to stop a supply shock from becoming an entrenched, broad-based inflation problem.

↗

Related TICGL Deep-Dive: What's Next for Tanzania's Economy?

Price stability, exchange-rate management and monetary credibility are foundational to the long-run growth story TICGL examines in our flagship policy research on closing the gaps between Tanzania's current trajectory and a US$1 trillion economy by 2050.

Read: What's Next for Tanzania's Economy? →

Headline Inflation (Jun-26)

4.0%

Within 3–5% target; up from 3.3% a year ago

Core Inflation (Jun-26)

3.7%

2-year high; now the top contributor

Transport Inflation (Jun-26)

13.6%

Up from just 1.6% a year earlier

Energy, Fuel & Utilities Inflation

6.3%

Up from 5.0% in May 2026

Food Inflation (Jun-26)

4.1%

Down from 7.3% a year earlier

Shilling Depreciation (y/y)

0.08%

FX pass-through was minimal

Crude Oil Price Swing (Jan–Apr 2026)

+63%

USD 63.7 → USD 103.9 per barrel

Central Bank Rate (Q3 2026)

6.25%

Raised from 5.75% on 2 July 2026

Executive Summary
1. Currency vs Inflation: Tracing the Transmission Channel
2. The Real Driver: Global Oil Prices & Energy Inflation
3. Headline vs Core vs Non-Core Inflation, 2024–2026
4. What's Actually Driving Headline Inflation?
5. Inflation by Category: Import-Sensitive vs Domestic
6. The Monetary Policy Response & Real Interest Rates
7. TICGL Assessment & Outlook
Related TICGL Research
Muhtasari kwa Kiswahili

1. Currency vs Inflation: Tracing the Transmission Channel

Plotting the shilling's monthly path against headline inflation over the same window shows the two series moving largely independently of one another. The shilling weakened modestly from January 2026 (TZS 2,518.1) to June 2026 (TZS 2,623.5) — a gentle, gradual slide — while headline inflation moved more sharply, jumping from 3.2 percent in March 2026 to 4.2 percent by May 2026 before easing slightly to 4.0 percent in June. The inflation jump happened faster and earlier than the currency move, which is the first sign that something other than the exchange rate was the primary driver.

Chart 1 · TZS/USD Exchange Rate vs Headline Inflation, June 2025–June 2026

Left axis: TZS per USD (end of period). Right axis: headline inflation (%, y/y). Source: Bank of Tanzania, National Bureau of Statistics (Tables A10, A9(i)).

TICGL Reading: A Stable Currency Cushioned, Rather Than Caused, the Inflation Uptick

BOT's own policy commentary attributes part of the reason the Central Bank Rate could stay at 5.75 percent through Q2 2026 to the shilling's stability limiting the pass-through of external price pressures into domestic prices. In other words, the currency did the opposite of amplifying inflation this cycle — it dampened what would otherwise have been a larger imported-inflation shock. Had the shilling depreciated at anywhere near its 2023–2024 pace (when the annual-average rate jumped 9.0% in a single year), the same global oil shock would likely have pushed headline inflation well above the 5 percent ceiling rather than keeping it inside the target band.

2. The Real Driver: Global Oil Prices & Energy Inflation

The clearest evidence that global commodity prices — not the shilling — are driving Tanzania's recent inflation uptick comes from lining up crude oil prices against domestic energy, fuel and utilities inflation. Global crude oil (average of Brent, Dubai and WTI) rose from USD 60.9 per barrel in December 2025 to a peak of USD 103.9 per barrel in April 2026 as the Middle East conflict intensified, before correcting to USD 81.7 by June 2026 following a ceasefire near the Strait of Hormuz. Tanzania's domestic energy, fuel and utilities inflation tracked this pattern with a short lag, rising from 2.1 percent in June 2025 to 6.3 percent in June 2026, with retail pump prices for petrol, diesel and kerosene reported as "persistently high" through the second quarter of 2026.

Chart 2 · Global Crude Oil Price vs Tanzania Energy/Fuel/Utilities Inflation, June 2024–June 2026

Left axis: crude oil price, USD per barrel (average of Brent, Dubai, WTI). Right axis: energy/fuel/utilities inflation (%, y/y). Source: World Bank Commodity Price data (Table A8); National Bureau of Statistics (Table A9(ii)).

TICGL Reading: An Imported Shock That Bypassed the Currency Channel

The April 2026 oil spike (+63% from January) is the single clearest cause of the current inflation episode — this was a global commodity event, not a Tanzania-specific currency event.
Energy inflation lags the oil price by roughly one to two months, consistent with retail pump-price adjustment cycles and fuel-subsidy smoothing — the government provided fuel subsidies in May and June 2026 that absorbed part of the initial price increase, an example of fiscal policy complementing monetary policy.
The June 2026 correction in oil prices (−20.6% m/m for Brent) should feed through to lower energy inflation prints in the coming months if sustained — a disinflationary tailwind heading into Q3 2026, independent of anything the shilling does.

3. Headline vs Core vs Non-Core Inflation, 2024–2026

Decomposing headline inflation into its core (underlying) and non-core (food and energy) components over a longer window shows how the composition of Tanzania's inflation has shifted. Through most of 2024 and 2025, non-core inflation (largely food-driven) ran well above core inflation, peaking near 7.3 percent in mid-2025. By mid-2026 the pattern has essentially inverted: non-core inflation has fallen back to 4.8 percent as the harvest eased food prices, while core inflation has climbed to 3.7 percent — its highest reading in the entire 2024–2026 series.

Chart 3 · Headline, Core & Non-Core Inflation, January 2024–June 2026 (%, y/y)

Source: National Bureau of Statistics, Tables A9(i) & A9(ii).

TICGL Reading: The Inflation Story Has Changed Character

This is arguably the most important structural signal in the whole dataset: Tanzania's inflation problem is no longer primarily a food-price problem (which is typically weather- and harvest-driven and self-correcting) — it is becoming a broader, imported cost-push problem (oil, transport, and now spreading into services and other goods). That shift is exactly what justifies a monetary policy response rather than simply waiting out the next harvest cycle, and it is why the MPC's July 2026 rate decision explicitly cites core inflation's rise as the trigger.

4. What's Actually Driving Headline Inflation?

Breaking the 4.0 percent June 2026 headline figure into its component contributions confirms the shift: core inflation alone contributed 2.7 percentage points of the 4.0 percent headline rate — by far the largest share, and the highest core contribution in the past two years. Unprocessed food contributed only 0.9 percentage points (down sharply from 2.6 points in May), while energy contributed a modest 0.4 percentage points.

Chart 4 · Contribution to Headline Inflation by Component, June 2025–June 2026 (Percentage Points)

Stacked bars sum to headline inflation for each month. Source: National Bureau of Statistics & BOT computations (Chart 2.2.5).

Table 1 · Contribution to Headline Inflation (Percentage Points)
Month	Unprocessed Food	Energy	Core	Headline Total
Jun-25	1.7	0.1	1.5	3.3
Sep-25	1.6	0.2	1.6	3.4
Dec-25	1.5	0.3	1.9	3.6
Mar-26	1.3	0.1	1.7	3.2
Apr-26	1.4	0.3	2.4	4.0
May-26	1.3	0.3	2.6	4.2
Jun-26	0.9	0.4	2.7	4.0

5. Inflation by Category: Import-Sensitive vs Domestically-Driven

Categorising the CPI's main groups by how directly they are exposed to imported costs (fuel, transport, energy) versus domestic supply conditions (food, local services) makes the pattern explicit.

Table 2 · Annual Inflation by Category (%, y/y), June 2025 vs May 2026 vs June 2026
Category	Jun-25	May-26	Jun-26	Exposure
Transport	1.6%	11.9%	13.6%	Import-sensitive (fuel-linked)
Energy, fuel & utilities	2.1%	5.0%	6.3%	Import-sensitive (fuel-linked)
Housing, water, electricity, gas & other fuels	1.7%	0.7%	1.2%	Partly import-sensitive
Personal care, social protection & misc.	2.0%	3.5%	3.6%	Mixed / services
Restaurants & accommodation services	1.3%	1.9%	1.9%	Domestic services
Clothing and footwear	2.0%	1.5%	1.3%	Partly import-sensitive
Food and non-alcoholic beverages	7.3%	5.6%	4.1%	Domestically-driven (harvest)
Alcoholic beverages and tobacco	3.5%	2.1%	1.9%	Domestic
Health	1.8%	1.4%	1.3%	Domestic / regulated
Information and communication	0.0%	0.9%	0.9%	Domestic

Source: National Bureau of Statistics & Bank of Tanzania (Table 2.2.1). Exposure classification is TICGL's own assessment.

TICGL Reading: A Two-Speed Inflation Picture

Import-sensitive categories (transport, energy) are running at 6–14 percent, while domestically-driven categories (food, alcoholic beverages, health) have actually decelerated to 1–4 percent. This split matters for business planning: firms with fuel-heavy logistics or transport-dependent supply chains are facing materially higher cost inflation than the 4.0 percent headline number suggests, while food and beverage retailers are seeing genuine disinflation.

6. The Monetary Policy Response & Real Interest Rates

The MPC held the CBR at 5.75 percent through Q2 2026, judging the initial oil-price shock to be a temporary, first-round supply effect that tighter policy could not meaningfully offset without needlessly damaging growth. But the rise in core inflation from 2.2 percent (March 2026) to 3.7 percent (June 2026) — evidence of second-round effects spreading into the broader basket of goods and services — triggered a 50-basis-point hike to 6.25 percent for Q3 2026, announced 2 July 2026. Because inflation itself eased slightly to 4.0 percent in the same month, the policy move modestly widened Tanzania's real (inflation-adjusted) interest rate.

Chart 5 · Nominal vs Real Interest Rates, June 2026

Real rate = nominal rate − headline inflation (4.0%, June 2026). Source: Bank of Tanzania (Tables A4, 2.2.1); TICGL computations.

Table 3 · Nominal & Real Interest Rates, June 2026
Rate	Nominal (%)	Headline Inflation (%)	Real Rate (%)
Central Bank Rate (from 2 Jul 2026)	6.25	4.0	+2.25
Overall time deposit rate	8.60	4.0	+4.60
Overall lending rate	15.20	4.0	+11.20
91-day Treasury bill rate	3.56	4.0	−0.44

TICGL Reading: Positive Real Rates Support the Currency, Closing the Loop

With real deposit and lending rates comfortably positive, Tanzania offers savers a genuine inflation-adjusted return — a factor that supports demand for shilling-denominated assets and, in turn, reinforces exchange-rate stability. This closes the loop described in this analysis: a stable currency limited imported inflation from the oil shock; the resulting moderate inflation print allowed the MPC to raise rates only modestly (50bps) rather than aggressively; and the resulting positive real rates now help sustain the currency stability that started the cycle. The main exception is short-dated Treasury bills, where a slightly negative real yield (91-day T-bill at 3.56% against 4.0% inflation) may need to adjust upward to keep short-term government paper attractive to investors.

7. TICGL Assessment & Outlook

Key Takeaways

The shilling is not the story — global oil prices are. With only 0.08% annual depreciation, currency pass-through explains very little of the 2026 inflation uptick; the Middle East-driven oil shock (+63% Jan–Apr 2026) is the dominant factor.
But currency stability is doing quiet, valuable work. Had the shilling been as volatile as in 2023–2024, the same global shock would likely have pushed headline inflation above the 5% ceiling rather than keeping it inside the target band.
The character of inflation has shifted from food to core/imported costs — a structurally more persistent and harder-to-manage form of inflation than the harvest-driven food inflation of 2024–2025, and the direct justification for the July 2026 rate hike.
Businesses face a two-speed cost environment: transport and energy-intensive operations are seeing double-digit cost inflation even as headline CPI sits at 4%, while food and beverage-linked businesses are experiencing genuine disinflation.
The June 2026 oil price correction (−20.6% m/m for Brent) is a disinflationary signal to watch — if sustained, it should ease energy and transport inflation over Q3 2026, potentially giving the MPC room to pause further tightening.

This inflation-and-currency analysis complements TICGL's companion reviews of Tanzania's government budget performance and the shilling's relationship with national debt for the same reporting period — together they form a fuller picture of the macro-fiscal-monetary policy mix currently in play.

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Muhtasari

Muhtasari kwa Kiswahili

Mfumuko wa bei (inflation) nchini Tanzania ulipanda hadi asilimia 4.0 mwezi Juni 2026, ukibaki ndani ya lengo la kitaifa la asilimia 3–5, lakini juu zaidi ya asilimia 3.3 iliyorekodiwa mwaka mmoja uliopita. Hata hivyo, shilingi ya Tanzania imeendelea kubaki tulivu sana, ikishuka thamani kwa asilimia 0.08 tu kwa mwaka. Hii inaonesha wazi kwamba chanzo kikuu cha ongezeko la mfumuko wa bei si udhaifu wa shilingi, bali ni kupanda kwa bei za mafuta duniani kutokana na mzozo wa Mashariki ya Kati — bei ya mafuta ghafi iliongezeka kwa zaidi ya asilimia 63 kati ya Januari na Aprili 2026.

Athari za bei za mafuta zimeonekana wazi kwenye gharama za usafiri, ambazo ziliongezeka kwa kasi kubwa hadi asilimia 13.6 mwezi Juni 2026 (kutoka asilimia 1.6 mwaka uliopita), na mfumuko wa bei za nishati na mafuta uliofikia asilimia 6.3. Wakati huo huo, mfumuko wa bei za chakula ulipungua hadi asilimia 4.1 kutokana na mavuno mazuri. Jambo muhimu zaidi ni kwamba "core inflation" (mfumuko wa bei usiojumuisha chakula na nishati) uliongezeka hadi asilimia 3.7, kiwango cha juu zaidi katika miaka miwili, ikionesha kuwa athari za mshtuko wa mafuta zimeanza kuenea kwenye bidhaa na huduma nyingine. Hii ndiyo sababu kuu iliyopelekea Kamati ya Sera za Fedha (MPC) kupandisha Kiwango cha Riba cha Benki Kuu (CBR) kutoka asilimia 5.75 hadi asilimia 6.25 kuanzia tarehe 2 Julai 2026.

TICGL inashauri wafanyabiashara, hasa wale wenye utegemezi mkubwa wa usafirishaji na nishati, kuzingatia kwamba gharama zao za uendeshaji zinaweza kuwa juu zaidi ya kiwango cha jumla cha mfumuko wa bei cha asilimia 4.0. Soma zaidi kuhusu mwelekeo wa kisera wa muda mrefu: What's Next for Tanzania's Economy? The Policy Gaps Keeping $1 Trillion Out of Reach by 2050.

This page is a TICGL research summary and visualization of publicly available data published by the Bank of Tanzania in its Monthly Economic Review, July 2026, and the National Bureau of Statistics, as cited throughout. Figures marked provisional (p) or revised (r) in the source document may be updated in subsequent BOT releases. This content is for general information and research purposes and does not constitute investment, legal or tax advice. © 2026 Tanzania Investment and Consultant Group Ltd (TICGL).

Executive Summary

The Tanzanian shilling depreciated by just 0.08 percent on an annual basis in the year to June 2026 — nearly half the 0.21 percent depreciation recorded a year earlier — making it one of the more stable currencies among peer economies over the period. The shilling traded at a monthly average of TZS 2,633.73 per US dollar in June 2026, up modestly from TZS 2,616.88 in May, after actually appreciating from TZS 2,604.6 (June 2025) to TZS 2,436.8 (November 2025) before drifting back up. This stability rests on strong gold export earnings (+36.7% y/y), resilient tourism receipts, and active Bank of Tanzania smoothing in the interbank foreign exchange market.

Set against that stability, Tanzania's national debt stock reached USD 50,595.8 million at end-June 2026 (+4.5% y/y), of which 70.4 percent is external. Crucially, 66.2 percent of external debt is denominated in US dollars — meaning the currency stability described above is not a peripheral detail but a direct determinant of how expensive Tanzania's debt is in local-currency terms. The debt mix is also shifting: domestic debt grew 10.8 percent year-on-year versus just 2.4 percent for external debt, a deliberate move that reduces exchange-rate risk on new borrowing but raises domestic financing costs and competes with private credit. Reserves cover of 4.4 months of imports — just above the four-month national benchmark — is the buffer holding this system together, and it is thinner than it looks once current-account and commodity-price risks are taken into account.

↗

Related TICGL Deep-Dive: What's Next for Tanzania's Economy?

Currency stability and debt sustainability are two of the structural pillars TICGL examines in our flagship policy research on the gaps standing between Tanzania's current trajectory and a US$1 trillion economy by 2050 — including how FX-denominated debt and reserve buffers interact with long-run growth policy.

Read: What's Next for Tanzania's Economy? →

Shilling Depreciation (y/y, Jun-26)

0.08%

Down from 0.21% a year earlier

TZS/USD (June 2026 average)

2,633.73

Up from 2,616.88 in May 2026

National Debt Stock

USD 50,595.8m

+4.5% year-on-year

USD Share of External Debt

66.2%

Direct FX exposure on debt service

External Debt Growth (y/y)

+2.4%

USD 34,765.3m → USD 35,606.1m

Domestic Debt Growth (y/y)

+10.8%

Debt mix shifting toward TZS-denominated

Reserve Import Cover

4.4 months

Just above the 4.0-month benchmark

Current Account Deficit (FY25/26)

USD 2,303.9m

+7.0% wider than FY24/25

1. Shilling Stability: How Stable, Really?

The interbank foreign exchange market (IFEM) was broadly stable in June 2026, with turnover rising to USD 193.3 million from USD 119.3 million in May, as the Bank of Tanzania made a net sale of USD 28.5 million to smooth volatility, consistent with its intervention policy. Rather than a straight-line depreciation, the monthly end-period data show the shilling actually strengthening through much of late 2025 before giving some of that back into mid-2026 — a shallow U-shaped path rather than sustained weakening.

Chart 1 · TZS/USD End-of-Period Exchange Rate, June 2025–June 2026

Source: Ministry of Finance & Bank of Tanzania (Table A10). Lower value = stronger shilling.

Table 1 · Exchange Rate Developments, June 2025–June 2026
Period	TZS/USD (end of period)	Month-on-month change
Jun-25	2,604.6	—
Jul-25	2,545.8	−2.26% (appreciation)
Aug-25	2,463.3	−3.24% (appreciation)
Sep-25	2,442.8	−0.83% (appreciation)
Oct-25	2,451.6	+0.36%
Nov-25	2,436.8	−0.60% (appreciation)
Dec-25	2,447.5	+0.44%
Jan-26	2,518.1	+2.88%
Feb-26	2,542.5	+0.97%
Mar-26	2,577.4	+1.37%
Apr-26	2,602.0	+0.95%
May-26	2,609.2	+0.28%
Jun-26	2,623.5	+0.55%

Source: Ministry of Finance & Bank of Tanzania (Table A10), TICGL computations.

TICGL Reading: A Managed, Not Purely Market-Driven, Stability

The appreciation phase (Jul–Nov 2025) coincides with peak gold-export strength and the ramp-up of the domestic gold purchase programme, suggesting FX supply from minerals was the dominant driver rather than portfolio flows.
The re-depreciation from January 2026 onward tracks the period when global oil prices spiked on the Middle East conflict (Brent rose from USD 66.8 in Jan-26 to USD 120.4 in Apr-26 before correcting), consistent with higher import demand for fuel pressuring the currency.
BOT's net USD 28.5 million sale in June 2026 confirms the central bank is actively leaning against volatility rather than allowing a fully free float — a policy stance that supports predictability for debt servicing but requires reserves to be maintained.

2. National Debt Stock: Size & Composition

Tanzania's national debt stock — external plus domestic — reached USD 50,595.8 million at the end of June 2026, up 4.5 percent from USD 48,396.3 million a year earlier. External debt (USD 35,606.1 million) remains dominant at 70.4 percent of the total, but its growth rate (+2.4% y/y) is now running well below that of domestic debt (+10.8% y/y in USD-equivalent terms), signalling a gradual but clear shift in how the deficit is being financed.

Chart 2 · National Debt Stock Composition, June 2025–June 2026 (USD Million)

Source: Ministry of Finance & Bank of Tanzania (Table A10).

Table 2 · National Debt Stock by Component, June 2025–June 2026 (USD Million)
Period	External Debt	Domestic Debt	Total National Debt	External Share
Jun-25	34,765.3	13,631.1	48,396.3	71.8%
Sep-25	35,642.2	15,407.9	51,050.1	69.8%
Dec-25	35,528.8	15,485.0	51,013.8	69.6%
Mar-26	35,886.2	14,917.3	50,803.5	70.6%
May-26	35,553.3	15,045.7	50,599.0	70.3%
Jun-26	35,606.1	14,989.7	50,595.8	70.4%

Source: Ministry of Finance & Bank of Tanzania (Table A10). Domestic debt shown in USD-equivalent terms; the TZS-denominated stock (TZS 39,325.8bn at Jun-26) is not itself subject to direct exchange-rate revaluation risk.

3. Currency Exposure of External Debt

The single most important number linking currency stability to debt sustainability is the currency composition of external debt. As of June 2026, 66.2 percent of Tanzania's disbursed outstanding external debt was denominated in US dollars, followed by the Euro (17.4%), Chinese Yuan (6.7%), and other currencies (9.8%). This composition has been essentially unchanged for the past year (USD share was 66.0% in June 2025), meaning currency-mix diversification has not materially progressed even as absolute borrowing has grown.

Chart 3 · Currency Composition of External Debt, June 2026

Source: Ministry of Finance & Bank of Tanzania (Table 2.7.4 / A10).

Chart 4 · Interest Payments by Source, Jul’25–May’26 (TZS Billion)

Foreign interest is the FX-exposed share of total debt-service cost.

Table 3 · Currency Composition of Disbursed External Debt (% Share)
Currency	Jun-25	May-26	Jun-26
United States Dollar	66.0%	65.9%	66.2%
Euro	17.7%	17.5%	17.4%
Chinese Yuan	6.4%	6.6%	6.7%
Other currencies	9.9%	9.9%	9.8%

TICGL Reading: Concentration Risk Is Structural, Not Transitory

A one percentage-point move in the shilling against the dollar revalues roughly two-thirds of the entire external debt stock — around USD 23.6 billion of exposure at June 2026 levels — directly in TZS terms, even with zero new borrowing.
The Euro and Yuan shares are small but rising slightly (Yuan up from 6.4% to 6.7% y/y), reflecting the growing role of Chinese concessional and commercial financing in infrastructure projects — a diversification trend worth watching but not yet material to overall risk.
Multilateral creditors hold 59.3 percent of external debt by creditor type — typically offering longer maturities and lower rates than commercial debt (34.4% share), which is a mitigating factor against currency-driven repayment shocks even though it does not reduce the currency exposure itself.

4. The Stability–Debt Feedback Loop

Reserves are the buffer that lets Tanzania absorb currency shocks without triggering a debt crisis. Gross official reserves stood at USD 5,673.5 million at end-June 2026 — comfortably above the previous year's levels but providing only 4.4 months of import cover, just above the four-month national benchmark (and below the higher EAC/SADC regional benchmarks shown in the source review). External debt service paid in June 2026 alone was USD 249.2 million (USD 184.9m principal, USD 64.3m interest) — a reminder that reserves must simultaneously cover trade financing needs and debt-service obligations.

Table 4 · External Debt Service Flows & Reserves Snapshot, June 2026
Item	Value
External loan disbursements (June 2026)	USD 379.8 million
External debt service paid (June 2026)	USD 249.2 million
of which principal	USD 184.9 million
of which interest	USD 64.3 million
Gross official reserves (end-Jun 2026)	USD 5,673.5 million
Import cover	4.4 months (benchmark: 4.0 months)
Domestic interest paid (cumulative Jul’25–May’26)	TZS 3,225.3 billion
Foreign interest paid (cumulative Jul’25–May’26) — FX-exposed	TZS 1,782.6 billion

Source: BOT Monthly Economic Review, July 2026 (Tables A10, A2, 2.8.1).

TICGL Reading: A Thin but Currently Adequate Buffer

Foreign interest represents about 36% of total interest paid (TZS 1,782.6bn of TZS 5,007.9bn cumulative) — this is the portion of debt-service cost that rises automatically in TZS terms if the shilling weakens, independent of any change in fiscal policy.
The current account deficit widened 7.0% year-on-year (to USD 2,303.9m) on faster import growth (+18.1%) than export growth (+17.2%) — a trend that, if it continues, will draw down the same reserves that back both import cover and debt-service capacity.
The shift toward domestic borrowing (Section 2) is a rational hedge against this exposure: TZS-denominated debt does not carry direct currency-revaluation risk. But cumulative net domestic financing for FY2025/26 had already reached 122.5% of its full-year budget by May 2026 (see TICGL's companion budget analysis), meaning this hedge is being pursued more aggressively than originally planned — with knock-on effects on domestic bond yields (10-year yield rose to 10.39% in June 2026) and private-credit crowding-out risk.

5. Historical Context: 2018–2025

Viewed over the medium term, Tanzania's external debt stock has grown 69.5 percent since 2018 (USD 20,503.0m → USD 34,765.3m), while the shilling's annual-average exchange rate has depreciated a cumulative 12.1 percent over the same period (TZS 2,263.8 → TZS 2,537.6 per USD) — debt growth has significantly outpaced currency depreciation, which is a broadly reassuring signal for long-run debt sustainability, though the pace of both increased noticeably from 2023 onward.

Chart 5 · External Debt Stock vs Exchange Rate, 2018–2025 (Annual)

Source: BOT Monthly Economic Review, July 2026 (Table A1). Left axis: debt (USD m); right axis: exchange rate (TZS/USD).

Chart 6 · Gross Reserves & Import Cover, 2018–2025

Bars: reserves (USD m, left axis). Line: import cover in months (right axis).

Table 5 · Long-Run Currency, Debt & Reserves Indicators, 2018–2025
Year	Exch. Rate, Annual Avg (TZS/USD)	External Debt (USD m)	Gross Reserves (USD m)	Import Cover (Months)
2018	2,263.8	20,503.0	5,044.6	4.9
2019	2,288.2	21,920.9	5,567.6	6.4
2020	2,294.1	22,952.7	4,767.7	5.6
2021	2,297.8	25,519.3	6,386.0	6.6
2022	2,303.1	27,832.5	5,177.2	4.7
2023	2,382.1	30,252.7	5,450.1	4.5
2024	2,597.4	31,950.9	5,546.9	4.5
2025	2,537.6	34,765.3	6,329.0	4.9

Source: BOT Monthly Economic Review, July 2026 (Table A1), Ministry of Finance.

TICGL Reading: 2024 Was the Inflection Point

The annual-average exchange rate jumped from TZS 2,382.1 in 2023 to TZS 2,597.4 in 2024 (+9.0% in a single year) — by far the sharpest move in the eight-year series — before partially reversing to TZS 2,537.6 in 2025. External debt growth also accelerated over the same window. Import cover simultaneously dipped to its lowest points of the series (4.5 months in both 2023 and 2024) before recovering to 4.9 months in 2025. Read together, 2023–2024 was a period of genuine currency and reserve stress that the 2025–2026 data shows Tanzania has since stabilised out of — but the reserve buffer has not yet been rebuilt much beyond where it stood before that stress episode.

6. TICGL Assessment & Outlook

Key Takeaways

Currency stability is real, but partly engineered. Active BOT intervention (net USD sales) and strong gold-export inflows — not simply market equilibrium — are what has kept depreciation to 0.08% y/y. This is a policy achievement, but one that depends on gold prices and IFEM management capacity continuing to hold.
Two-thirds of external debt is a standing currency bet. With 66.2% of external debt in USD, any renewed depreciation episode (of the kind seen in 2023–2024) would mechanically raise TZS-denominated debt-service costs and the debt-to-GDP ratio, without any new borrowing decision being taken.
The domestic-financing shift is a rational but not costless hedge. Growing domestic debt 10.8% y/y (vs 2.4% for external debt) reduces FX exposure but is already running ahead of its FY2025/26 budget envelope, pushing up Treasury yields and raising crowding-out risk for private credit — a trade-off between currency risk and domestic financial-market risk, not a free reduction in overall risk.
Reserve buffers are adequate but thin. At 4.4 months of import cover — only marginally above the 4.0-month floor — Tanzania has limited room to absorb a simultaneous shock to gold prices, tourism receipts, and oil import costs without the shilling coming under renewed pressure.
Watch the CBR-yield-currency triangle through Q3 2026. The MPC's hike to 6.25% supports the shilling via higher real interest rates, but it simultaneously raises the cost of the domestic-borrowing-heavy financing strategy the government is now running — reinforcing why currency policy and debt policy cannot be assessed in isolation from one another.

This currency-and-debt analysis complements TICGL's parallel review of central government revenue and expenditure performance for the same period — read it alongside our broader research on structural policy gaps in Tanzania's growth model.

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Muhtasari

Muhtasari kwa Kiswahili

Shilingi ya Tanzania imeendelea kubaki tulivu sana, ikishuka thamani kwa asilimia 0.08 tu kwa mwaka hadi Juni 2026, ikilinganishwa na asilimia 0.21 mwaka uliopita. Uthabiti huu unasaidiwa na mapato imara ya dhahabu (yaliyokua kwa asilimia 36.7), utalii, na uingiliaji kati wa Benki Kuu ya Tanzania (BOT) katika soko la fedha za kigeni — ikiwemo mauzo halisi ya dola milioni 28.5 mwezi Juni 2026 kudhibiti mabadiliko ya thamani.

Hata hivyo, deni la taifa (la ndani na nje) limefikia dola za Marekani milioni 50,595.8 ifikapo Juni 2026, huku asilimia 66.2 ya deni la nje likiwa katika dola za Marekani. Hii ina maana kwamba uthabiti wa shilingi ni muhimu sana katika kudhibiti gharama za ulipaji deni kwa fedha za Kitanzania — mabadiliko madogo ya thamani ya shilingi yanaweza kuongeza gharama za deni bila hata mkopo mpya kuchukuliwa. Akiba ya fedha za kigeni (miezi 4.4 ya uagizaji bidhaa) ipo juu kidogo ya kiwango cha chini kinachokubalika (miezi 4), hivyo bado kuna nafasi finyu ya kuhimili mshtuko wa ghafla kwenye bei za dhahabu au mapato ya utalii.

Wakati huo huo, Serikali imeendelea kuongeza matumizi ya mikopo ya ndani (iliyokua kwa asilimia 10.8 kwa mwaka) kuliko mikopo ya nje (asilimia 2.4), hatua inayopunguza hatari ya fedha za kigeni lakini inayoongeza shinikizo kwenye viwango vya riba vya ndani na inaweza kuathiri upatikanaji wa mikopo kwa sekta binafsi. TICGL inashauri wadau kufuatilia kwa karibu uwiano huu kati ya uthabiti wa shilingi na mwelekeo wa deni la taifa, hasa katika muktadha wa malengo ya muda mrefu ya kiuchumi ya Tanzania. Soma zaidi: What's Next for Tanzania's Economy? The Policy Gaps Keeping $1 Trillion Out of Reach by 2050.

This page is a TICGL research summary and visualization of publicly available data published by the Bank of Tanzania in its Monthly Economic Review, July 2026, and by the Ministry of Finance, as cited throughout. Figures marked provisional (p) or revised (r) in the source document may be updated in subsequent BOT releases. This content is for general information and research purposes and does not constitute investment, legal or tax advice. © 2026 Tanzania Investment and Consultant Group Ltd (TICGL).

01 — OverviewExecutive Summary

1. What Actually Happened in Q4 2025/26

1.1 FDI vs. Domestic Investment, General Investment Scheme

General Investment Scheme: FDI vs. Domestic Investment

1.2 Where the capital went: registered investment by sector

General Investment Scheme Capital by Sector, Q4 2025/26

1.3 Ownership structure and regional distribution

02 — DiagnosisFive Possible Explanations, Ranked

Base effect — one-off large projects registered a year earlier

Global capital is becoming more selective

Domestic crowding-in

Election / political-cycle effect

Rising competition from neighbouring countries

3. The Fuller Picture: EPZ/SEZ Capital Rose Nearly 30-Fold

3.1 The combined picture

General Scheme vs. EPZ/SEZ vs. Combined Total

04 — ContextRegional and Global Context

4.1 East Africa: a more competitive field

East African FDI Inflows, UNCTAD Annual Basis (2024, latest comparable year)

4.2 A more selective global environment

4.3 Tanzania's institutional response

05 — ImplicationsWhat This Means

1For policymakers

2For investors and market entrants

3For researchers and analysts

4For the wider public conversation

06 — SourcesMethod & Source Note

Request TICGL/TERI's Full Investment Climate Briefing

07 — Quick AnswersFrequently Asked Questions

Why did FDI in Tanzania's General Investment Scheme fall 58.4% in Q4 2025/26?

Did Domestic Investment also fall in Q4 2025/26?

Is Tanzania's total investment actually falling?

What role did Tanzania's October 2025 general election play?

How does Tanzania's FDI compare with its East African neighbours?

08 — Explore MoreTICGL Economic: Related Insights & Tools

Is Tanzania's Economy Growing?

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

Why Tanzania's Economic Growth Has Not Been Sufficiently Inclusive

Tanzania Business Intelligence Dashboard

TICGL Economic Insights Dashboard

Invest in Tanzania

Muhtasari kwa Kiswahili

01 — OverviewExecutive Summary

Read this alongside TICGL/TERI's investment climate analysis

1. The Scale of the Boom: EPZ/SEZ Investment, Q4 2025/26

1.1 Quarter-on-quarter growth

Capital & Turnover Growth

Jobs Created

1.2 Sector concentration: Agriculture and Forestry dominate

EPZ/SEZ Capital by Sector

1.3 Ownership and regional concentration

02 — Source of CapitalChina's Dominance of the FDI Story

FDI Capital by Source Country

FDI-Linked Jobs by Source Country

2.1 Foreign vs. domestic investment

FDI vs. Domestic Investment (DI)

3. What Is Actually Being Built?

HWTZ Holding Limited

HWTZ SEZ Limited

03 — AnalysisIs This Boom Sustainable?

4.1 Land governance and free, prior and informed consent

4.2 Local content and technology transfer

4.3 Environmental and social risk

4.4 Dependency and concentration risk

4.5 The fiscal cost of the incentive package

04 — TransparencyWhat the Bulletin Does Not Show

05 — RecommendationsPolicy Recommendations

1Reconcile EPZ/SEZ sector classification and publish it project-by-project

2Mandate and verify local content for SEZ mega-projects

3Publish land governance and FPIC documentation

4Diversify the FDI source base deliberately

06 — SourcesMethod & Source Note

Request a Full Briefing

07 — Quick AnswersFrequently Asked Questions

How much of Tanzania's EPZ/SEZ investment came from China in Q4 2025/26?

Which sectors did the Chinese-led EPZ/SEZ capital go into?

What is actually being built with the Ruvuma capital?

Is this level of dependence on a single country and investor group sustainable?

Does the bulletin disclose local content, land compensation, or environmental safeguard details?

08 — Explore MoreTICGL Economic: Related Insights & Tools