Between 2021/22 and 2025/26, Tanzania's debt service costs surged by 42–58%, from an estimated TZS 9–10 trillion to a confirmed TZS 14.22 trillion—now accounting for 25.2% of the national budget (TZS 56.49 trillion). Over this period, total public debt rose to approximately 46% of GDP, driven largely by external borrowing, which reached USD 33.9 billion in 2025/26 and remains 67.7% USD-denominated, exposing the country to exchange rate risks, especially following a 2.6% shilling depreciation in 2024/25. Domestic debt also expanded significantly to TZS 34.26 trillion, with the majority held by commercial banks and pension funds. Despite a stabilizing debt-to-GDP ratio and a manageable debt service-to-GNI ratio of 2.89% (2023), the growing reliance on non-concessional and foreign currency debt underscores fiscal vulnerabilities that require prudent debt management strategies to ensure long-term sustainability.

Escalating Service Costs

Tanzania's debt servicing landscape has undergone significant transformation over the past five years, reflecting the country's economic growth trajectory and evolving fiscal priorities. The most striking development is the substantial increase in debt service costs, which have risen from an estimated TZS 9-10 trillion in 2021/22 to TZS 14.22 trillion in 2025/26 – representing a 42-58% increase over the five-year period.

Key Performance Indicators at a Glance:

• Current Debt Service (2025/26): TZS 14.22 trillion (25.2% of national budget)
• Total Public Debt: Approximately 46% of GDP (2025/26)
• External Debt: USD 33.9 billion (67.7% USD-denominated)
• Domestic Debt: TZS 34.26 trillion
• Debt Service-to-GNI Ratio: 2.89% (2023 data)
• Five-Year Growth in Debt Service: 42-58% increase

Detailed Year-by-Year Analysis

2021/22 Financial Year: Foundation Period

The 2021/22 period established the baseline for Tanzania's modern debt management framework. With debt service costs estimated at TZS 9-10 trillion, the government maintained a relatively moderate debt burden at 43.6% of GDP. The debt composition showed a balanced approach with domestic debt at 15.9% of GDP and external debt forming the larger portion. Notably, domestic arrears stood at a manageable 1.8% of GDP, indicating effective short-term debt management.

The present value debt-to-GDP ratio of 31% remained well below the 55% benchmark, positioning Tanzania in the low-to-moderate debt distress risk category. External borrowing was predominantly concessional, reducing the overall cost burden and exchange rate exposure.

2022/23 Financial Year: Strategic Expansion

The government allocated TZS 9.1 trillion for debt servicing within a total budget of TZS 44.4 trillion, with TZS 7.4 trillion successfully disbursed by April 2023. This period marked a strategic shift as public debt increased to 45.7% of GDP (46.7% including domestic arrears), reflecting increased infrastructure investment.

External debt composition rose to 63.3% of total debt, indicating a pivot toward international financing for development projects. The shift toward non-concessional borrowing began during this period, driven by infrastructure financing needs. Despite this increase, the present value debt-to-GDP ratio remained sustainable at 31.8%.

2023/24 Financial Year: Acceleration Phase

Debt servicing allocation reached TZS 10.48 trillion, representing a 15% increase from the previous year. This increase occurred within a Ministry of Finance budget of TZS 15.94 trillion, highlighting debt service as a major fiscal priority. Total public debt climbed to 47.36% of GDP, with external debt reaching USD 30.533 billion by July 2023.

The debt structure showed concerning trends with external debt comprising 73% of total obligations, significantly increasing Tanzania's exposure to exchange rate fluctuations. Total national debt reached approximately TZS 69.44 trillion in 2022, continuing its upward trajectory through 2023.

2024/25 Financial Year: Consolidation Efforts

Debt service costs are estimated at TZS 11-12 trillion within a national budget of TZS 49.35 trillion. External debt peaked at USD 32.89 billion in September 2024, subsequently reaching USD 33.905 billion by January 2025. The central government held 78.1% of external debt, indicating concentrated fiscal responsibility.

Domestic debt stabilized at TZS 32.62 trillion in September 2024, with Treasury bonds dominating at 78.9% of domestic obligations. The debt-to-GDP ratio showed signs of stabilization, with projections indicating a gradual decline to 40.84% by 2029, suggesting improved debt sustainability measures.

2025/26 Financial Year: Current Trajectory

The current budget allocation confirms TZS 14.22 trillion for debt servicing, including TZS 6.49 trillion specifically for interest payments. This represents the highest debt service allocation in the five-year period, occurring within a total budget of TZS 56.49 trillion. External debt stands at USD 33.905 billion, with the government holding 76.4% of these obligations.

Domestic debt has grown to TZS 34.26 trillion as of March 2025, primarily held by commercial banks (29-33%) and pension funds (26.5-27.6%). The USD-dominated debt structure (67.7-68.1%) continues to pose exchange rate risks, particularly given the 2.6% depreciation of the Tanzanian Shilling in 2024/25.

Tanzania National Debt Service Costs (2021/22–2025/26)

Key Observations

1. Trend in Debt Service Costs: Debt service costs have increased steadily, from an estimated TZS 9–10 trillion in 2021/22 to TZS 9.1 trillion in 2022/23, TZS 10.48 trillion in 2023/24, an estimated TZS 11–12 trillion in 2024/25, and a confirmed TZS 14.22 trillion in 2025/26. This reflects growing borrowing, particularly external debt (73% of total debt in 2024), and larger budgets (TZS 44.4 trillion in 2022/23 to TZS 56.49 trillion in 2025/26). The 18–29% jump from 2024/25 to 2025/26 is driven by increased interest payments (TZS 6.49 trillion in 2025/26) and a higher debt stock.
2. Debt Composition: External debt, predominantly USD-denominated (67.7–68.1%), reached USD 33.905 billion in 2025, exposing Tanzania to exchange rate risks, with a 2.6% shilling depreciation in 2024/25 increasing repayment costs. Domestic debt, mainly Treasury bonds (78.9% in 2024), rose from an estimated TZS 22.17 trillion in 2021/22 to TZS 34.26 trillion in 2025/26, held primarily by commercial banks (29–33%) and pension funds (26.5–27.6%).
3. Sustainability: Tanzania’s debt-to-GDP ratio increased from 43.6% in 2021/22 to 47.36% in 2023/24, stabilizing at ~46% in 2024/25–2025/26, with a projected decline to 40.84% by 2029. The debt service-to-GNI ratio was 2.8915% in 2023, indicating moderate debt distress risk per IMF and World Bank analyses. However, reliance on non-concessional borrowing and USD exposure poses challenges, particularly with shilling depreciation.

As of May 2025, Tanzania’s national debt reached TZS 107.70 trillion (approx. USD 39.88 billion), with external debt accounting for TZS 72.94 trillion (67.7%) and domestic debt at TZS 34.76 trillion (32.3%). The debt-to-GDP ratio stands at an estimated 47.8%, up from 46.9% in 2023, though projections suggest a decline to 40.84% by 2029 due to robust GDP growth. External debt is heavily exposed to currency risk, with 67.4% denominated in USD (approx. TZS 49.18 trillion), amplifying the cost of servicing amid a 3.82% depreciation of the shilling. Despite rising debt levels, the 2024 Debt Sustainability Analysis (DSA) by the IMF and government confirms that Tanzania’s debt remains sustainable, backed by USD 5.14 billion in reserves (covering 4.2 months of imports) and a narrowing fiscal deficit projected at 3.0% of GDP in 2025/26.

1. Overview of National Debt

• Tanzania’s national debt comprises external debt (owed to non-residents, repayable in foreign currency, goods, or services) and domestic debt (owed to residents, primarily in TZS). It includes public and publicly guaranteed (PPG) debt, covering central government, public corporations, and contingent liabilities, but excludes private sector debt unless specified.
• Total Debt Stock: As of May 2025, Tanzania’s total national debt stood at TZS 107.70 trillion (USD 39.88 billion at TZS 2,698.42/USD), with external debt at TZS 72.94 trillion (67.7%) and domestic debt at TZS 34.76 trillion (32.3%).
• Debt-to-GDP Ratio: The debt-to-GDP ratio was 46.9% in 2023 (), rising to an estimated 47.8% in 2024 (based on GDP of TZS 156.6 trillion in 2024, and projected debt growth). Forecasts suggest a decline to 40.84% by 2029 due to GDP growth outpacing debt accumulation.
• Sustainability: The 2024 Debt Sustainability Analysis (DSA) by the Tanzanian government and IMF indicates that the debt remains sustainable, with a low risk of external debt distress, supported by a fiscal deficit narrowing to 3.0% of GDP in 2025/26 and foreign exchange reserves covering 4.2 months of imports.

2. External Debt

• Overview: External debt includes loans from multilateral institutions, bilateral creditors, commercial lenders, and IMF credit, denominated primarily in USD (67.4%), Euro (16.6%), and Chinese Yuan (6.3%). It finances infrastructure (e.g., Standard Gauge Railway, Julius Nyerere Hydropower Plant), social services, and energy projects.
• May 2025 Figures:
  • Total External Debt: TZS 72.94 trillion (USD 27.04 billion), up from TZS 64 trillion in October 2022 () and TZS 53.32 trillion in June 2023 (), reflecting a 14% year-on-year increase from April 2024’s estimated TZS 64.1 trillion (based on USD 23.75 billion at TZS 2,698.42/USD).
  • Composition by Creditor:
    • Multilateral Institutions: ~45.7% (~TZS 33.33 trillion), led by World Bank-IDA (TZS 19.1 trillion in 2020/21,) and African Development Bank-ADF (TZS 5.5 trillion in 2020/21).
    • Commercial Creditors: ~30.5% (~TZS 22.25 trillion), including Credit Suisse AG (TZS 3.1 trillion in 2020/21,) and Standard Chartered Bank (TZS 1.6 trillion).
    • Bilateral Creditors: ~11.2% (~TZS 8.17 trillion), with Exim China at TZS 3.9 trillion in 2020/21.
    • Other: ~12.6% (~TZS 9.19 trillion), including IMF credit and other multilateral lenders.
  • Currency Composition:
    • USD: 67.4% (~TZS 49.18 trillion), increasing repayment costs due to TZS depreciation (3.82% in May 2025).
    • Euro: 16.6% (~TZS 12.11 trillion).
    • Chinese Yuan: 6.3% (~TZS 4.59 trillion).
    • Other Currencies: 9.7% (~TZS 7.08 trillion).
  • Sector Allocation (based on September 2024,):
    • Transport and Telecommunications: 21.5% (~TZS 15.68 trillion), e.g., SGR, port upgrades.
    • Social Welfare and Education: 20.8% (~TZS 15.17 trillion).
    • Energy and Mining: ~15% (~TZS 10.94 trillion), e.g., Julius Nyerere Hydropower Plant.
    • Agriculture: 5.1% (~TZS 3.72 trillion), low given its 25% GDP contribution.
    • Tourism: 1.6% (~TZS 1.17 trillion), underfunded despite 19.5% GDP contribution.
• Trends and Drivers:
  • Growth: External debt rose from TZS 47.07 trillion (USD 20.8 billion) in April 2022 () to TZS 72.94 trillion in May 2025, driven by non-concessional borrowing for infrastructure (e.g., SGR,) and increased disbursements (USD 31.43 billion disbursed, USD 5.04 billion undisbursed in September 2024,).
  • Key Projects: The 2025/26 budget allocates TZS 7.72 trillion for capital projects (), with external loans (TZS 8.68 trillion) funding energy (e.g., hydropower) and transport (e.g., SGR, Dar es Salaam port).
  • Currency Risk: The 67.4% USD-denominated debt exposes Tanzania to exchange rate fluctuations, with the TZS depreciating 3.82% annually in May 2025 (Document, Page 12). A 10% TZS depreciation could increase debt servicing by ~TZS 4.92 trillion.
• Economic Implications:
  • Positive: External borrowing supports growth (5.5% GDP in 2024, 6% projected in 2025,), with investments in infrastructure boosting trade (24% intra-African trade rise,) and competitiveness (e.g., AfCFTA,).
  • Risks: High USD exposure (67.4%) and rising commercial borrowing (30.5% of disbursements,) increase servicing costs, with external debt service at TZS 6.49 trillion in 2025/26 (). Global interest rate hikes and TZS depreciation (web:19) exacerbate costs.
  • Sustainability: The IMF’s 2024 DSA confirms low distress risk, with reserves (USD 5,136.6 million, 4.2 months import cover) and concessional loans (72.5% of external debt,) mitigating risks.elibrary.imf.orgelibrary.imf.org

3. Domestic Debt

• Overview: Domestic debt includes Treasury bonds (78.9%), Treasury bills (8.8%), and domestic arrears (1.1% of GDP in 2022/23,), held by commercial banks, pension funds, and the BoT. It finances recurrent spending (e.g., wages) and development projects.
• May 2025 Figures:
  • Total Domestic Debt: TZS 34.76 trillion (USD 12.88 billion), up from TZS 32.62 trillion in September 2024 and TZS 28.92 trillion in June 2023 (), a 6.5% increase from September 2024.
  • Composition by Creditor:
    • Commercial Banks: 28.8% (TZS 10.14 trillion, down from 29.7% in September 2024).
    • Pension Funds: 26.1% (TZS 9.20 trillion, down from 26.7%).
    • Bank of Tanzania: 20.3% (TZS 7.16 trillion, down from 20.5%).
    • Others (public institutions, private companies, individuals): 17.7% (TZS 6.24 trillion, up from 15.2%).
    • Insurance Companies: 5.2% (TZS 1.84 trillion, down from 9%).
    • BoT Special Funds: 1.8% (TZS 0.62 trillion, down from 2%).
  • Instrument Breakdown:
    • Treasury Bonds: 78.9% (TZS 27.43 trillion), preferred for long maturities.
    • Treasury Bills: 8.8% (TZS 3.06 trillion), used for short-term financing.
    • Domestic Arrears: ~1.1% of GDP (~TZS 1.72 trillion, based on 2024 GDP of TZS 156.6 trillion).
• Trends and Drivers:
  • Growth: Domestic debt rose from TZS 22.37 trillion in April 2022 () to TZS 34.76 trillion in May 2025, driven by borrowing for development projects (TZS 1.90 trillion in 2024/25,) and rollover of maturing securities (TZS 3.54 trillion).
  • Interest Rates: Treasury bill rates rose to 11.7% by March 2024 from 5.8% in March 2023, while Treasury bond yields (e.g., 20-year) increased by 2–2.9% (). Domestic debt servicing cost TZS 5.31 trillion in 2024/25.
  • Creditor Dynamics: Commercial banks (28.8%) and pension funds (26.1%) dominate, reflecting a robust domestic bond market. The BoT’s 20.3% share aligns with monetary policy (6% CBR).
• Economic Implications:
  • Positive: Domestic borrowing reduces reliance on volatile external funds, with Treasury bonds (78.9%) offering stable long-term financing (). The 2025/26 budget’s TZS 6.27 trillion domestic borrowing plan supports infrastructure.
  • Risks: Rising interest rates (11.7% for T-bills,) and arrears (TZS 1.72 trillion) strain fiscal space. High domestic debt (32.3% of total) crowds out private sector credit, with lending rates at 15.5%.
  • Sustainability: The domestic debt-to-GDP ratio (~22.2%, based on TZS 156.6 trillion GDP) is manageable, but increasing yields and arrears require fiscal discipline.

4. Economic Implications and Outlook

• Debt Sustainability: The 2024 DSA confirms sustainable debt, with a debt-to-GDP ratio of 47.8% in 2024, projected to decline to 40.84% by 2029 (). Reserves (USD 5,136.6 million, Document, Page 12) and concessional loans (72.5% of external debt,) mitigate risks. The fiscal deficit is projected at 3.0% of GDP in 2025/26.
• Economic Growth: Debt-funded projects (e.g., SGR, hydropower) drive 6% GDP growth in 2025 (), with exports (USD 16,994.7 million, Document, Page 14) and FDI (USD 3.7 billion in January–May 2025,) supporting stability.
• Risks: USD-denominated debt (67.4%) and TZS depreciation (3.82%, Document, Page 12) increase servicing costs. Low agriculture (5.1%) and tourism (1.6%) allocations () limit growth in key sectors. Geopolitical tensions and climate shocks (e.g., La Niña) pose risks.
• Outlook: The 2025/26 budget (TZS 56.49 trillion,) prioritizes revenue mobilization (16.7% of GDP) and infrastructure, with TZS 14.95 trillion in loans (TZS 8.68 trillion external, TZS 6.27 trillion domestic). Diversifying exports (e.g., manufacturing,) and reducing arrears will enhance sustainability

Tanzania National Debt - May 2025: Key Figures

Note: USD conversion based on exchange rate of TZS 2,698.42/USD (May 2025).

In April 2025, Tanzania’s external debt reached USD 35.51 billion, with the central government holding 76.7% (USD 27.22 billion) and the private sector 23.3% (USD 8.28 billion), including significant interest arrears of USD 1.63 billion. Funds were primarily allocated to transport and telecommunications (21.5%), balance of payments and budget support (20.2%), and social welfare and education (19.9%), reflecting priorities in infrastructure and human capital. The debt, predominantly denominated in USD (67.4%), exposes Tanzania to exchange rate risks, mitigated by USD 5.3 billion in reserves. The following table summarizes these key figures.

1. External Debt Stock by Borrowers (April 2025)

The external debt stock represents the total outstanding debt owed to foreign creditors, categorized by borrower type, providing insight into the distribution of debt obligations.

Key Figures:

• Total External Debt Stock: USD 35,505.9 million
• Breakdown by Borrower:

Analysis:

• Central Government Dominance: The central government accounts for 76.7% of the external debt stock (USD 27,224.0 million), with nearly all being disbursed outstanding debt (DOD) at USD 27,146.1 million. The low interest arrears (USD 78.0 million, 0.2%) indicate effective debt servicing, consistent with the Monthey Economic Review’s note of fiscal discipline and a fiscal deficit target below 3% of GDP. TICGL confirm the central government as the largest borrower, holding 78% of external debt in December 2019, a trend that persists into 2025.
• Private Sector Debt: The private sector’s share of 23.3% (USD 8,278.1 million) is significant, with USD 6,641.1 million in DOD and USD 1,637.0 million in interest arrears (4.6% of total debt). The high arrears suggest repayment challenges, possibly due to foreign exchange shortages, as the Tanzanian Shilling (TZS) depreciated by 3.9% annually to TZS 2,684.41/USD in April 2025 (previous responses). TICGL note private sector credit growth of 13.2% in February 2025, indicating active borrowing but potential liquidity constraints.
• Public Corporations: The negligible share of public corporations (USD 3.8 million, 0.0%) reflects minimal external borrowing by state-owned enterprises, likely due to reliance on central government funding or domestic financing. This aligns with TICGL noting public corporations’ 0.4% share in 2019.
• Debt Sustainability: The IMF’s Debt Sustainability Analysis (DSA) indicates a moderate risk of external debt distress, with the public debt-to-GDP ratio at 35% in 2024, well below the 55% benchmark. The total external debt of USD 35.51 billion in April 2025, up from USD 32.09 billion in January 2025, suggests rising borrowing but within sustainable limits, supported by gross official reserves of USD 5.3 billion (4.3 months of import cover, previous responses).

Insights:

• The central government’s dominant share (76.7%) reflects its role in financing infrastructure and budget deficits, as seen in the Monthey Economic Review’s mention of Treasury bond auctions (TZS 519.6 billion successful bids, previous responses). Low arrears (0.2%) indicate proactive debt management.
• The private sector’s high interest arrears (USD 1,637.0 million) highlight vulnerabilities to currency depreciation and foreign exchange constraints, consistent with the Monthey Economic Review’s note of lower seasonal foreign exchange inflows (previous responses).
• The negligible public corporation debt suggests a centralized borrowing strategy, reducing fiscal risks from state-owned enterprises.

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

This breakdown shows how external debt funds are allocated across economic sectors, reflecting government priorities and economic development goals.

Key Figures:

• Total Disbursed Outstanding Debt (DOD): Included in the total external debt of USD 35,505.9 million.
• Breakdown by Sector/Use:

Analysis:

• Transport & Telecommunication (21.5%): The largest share reflects significant investments in infrastructure, such as the Standard Gauge Railway (SGR) and telecommunications upgrades, aligning with the Monthey Economic Review’s focus on flagship projects. TICGL note transport and telecom as the top sector for external debt allocation since 2019 (27%), indicating sustained priority.
• BoP & Budget Support (20.2%): This substantial share supports fiscal and macroeconomic stability, addressing balance of payments (BoP) needs and budget deficits. The Monthey Economic Review reports a March 2025 deficit of TZS 284.3 billion (previous responses), likely financed partly through external loans, as confirmed by IMF disbursements (USD 440.8 million under the ECF).
• Social Welfare & Education (19.9%): The high allocation to social sectors underscores Tanzania’s focus on human capital, aligning with the World Bank’s Country Partnership Framework (2025–2029) emphasizing education and health. This supports the Third Five-Year Development Plan’s goals for inclusive growth.
• Energy & Mining (13.6%): Investments in energy (e.g., Julius Nyerere Hydropower Project) and mining (e.g., gold, contributing USD 3.66 billion in exports) reflect strategic priorities for energy security and resource development. TICGL confirm this sector’s importance, with 15% of debt allocated in 2019.
• Smaller Sectors: Agriculture (5.1%), real estate (4.7%), industries (3.9%), finance & insurance (3.9%), and tourism (1.6%) receive smaller shares, indicating diversified but less prioritized investments. The Monthey Economic Review notes agricultural export growth, suggesting some debt supports this sector’s productivity.

Insights:

• The focus on hard infrastructure (transport, telecom, energy) supports Tanzania’s Vision 2050 goals of structural transformation and 8% GDP growth by 2026, as infrastructure drives economic activity (5.6% GDP growth in 2024).
• The significant BoP and budget support (20.2%) reflects reliance on external financing for fiscal stability, consistent with the IMF’s ECF and RSF programs.
• The 19.9% allocation to social welfare and education aligns with efforts to close human capital gaps, as highlighted by the IMF’s call for increased social spending.

3. Disbursed Outstanding Debt by Currency Composition (April 2025)

The currency composition of external debt indicates exposure to exchange rate risks and borrowing TICGL.

Key Figures:

• Breakdown by Currency:

Analysis:

• US Dollar Dominance (67.4%): The USD’s dominant share exposes Tanzania to exchange rate risks, as the TZS depreciated by 3.9% annually to TZS 2,684.41/USD in April 2025 (previous responses). TICGL confirm USD dominance at 68.1% in January 2025, consistent with historical trends (68.9% in 2023). This reflects borrowing from multilateral institutions (e.g., IMF, World Bank) and commercial creditors, who account for 53.9% and 36.3% of external debt, respectively.
• Euro (16.8%): The significant Euro share indicates borrowing from European institutions or bilateral creditors (e.g., EU partners). The stable Euro share (16.1% in January 2025) suggests consistent European financing, likely for infrastructure and social projects.
• Chinese Yuan (6.3%): The Yuan’s share reflects China’s role as a key bilateral creditor, likely tied to infrastructure projects like the SGR. TICGL note China as a top FDI source, with Yuan-denominated loans growing in importance.
• Other Currencies (9.5%): This includes currencies like the Japanese Yen or multilateral basket currencies (e.g., IMF’s SDRs), reflecting diversified borrowing. The Monthey Economic Review’s mention of reserves (USD 5.3 billion, previous responses) supports Tanzania’s capacity to manage multi-currency debt obligations.

Insights:

• The USD’s 67.4% share heightens vulnerability to TZS depreciation, as seen in the 1.3% monthly depreciation from March to April 2025 (previous responses). The BoT’s intervention (USD 6.25 million sold in April 2025) mitigates this risk (previous responses).
• The Euro and Yuan shares indicate diversified creditor relationships, reducing reliance on a single currency but requiring careful debt management to avoid currency mismatches.
• The Monthey Economic Review’s stable reserves (4.3 months of import cover) and IMF support provide a buffer against currency-related risks.

Conclusion

Tanzania’s external debt in April 2025, totaling USD 35.51 billion, is predominantly held by the central government (76.7%, USD 27.22 billion), with the private sector contributing 23.3% (USD 8.28 billion), including significant interest arrears (USD 1.63 billion). Funds are primarily allocated to transport and telecommunications (21.5%), BoP and budget support (20.2%), and social welfare and education (19.9%), reflecting priorities in infrastructure and human capital. The debt’s currency composition, dominated by the USD (67.4%), followed by the Euro (16.8%) and Yuan (6.3%), exposes Tanzania to exchange rate risks, mitigated by reserves of USD 5.3 billion and BoT interventions. The debt profile supports growth (projected at 6% in 2025) and fiscal stability, with a moderate risk of distress per the IMF’s DSA.

The following table summarizes these key figures.

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

1. External Debt Stock by Borrowers (March 2025)

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

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

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

3. Debt by Currency Composition (March 2025)

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

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

Key Insights:

1. Debt Is Primarily Public and Government-Controlled

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

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

2. Debt Is Focused on Development Priorities

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

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

3. High Exposure to the US Dollar

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

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

Conclusion

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

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

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

Tanzania Debt Development (as of February 2025)

1. Total External Debt Stock

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

2. External Debt Stock by Borrower

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

3. Disbursed Outstanding Debt by User of Funds

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

4. Debt by Currency Composition

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

Summary:

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

Tanzania’s external debt development tells us:

What the Figures Tell Us

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

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