Six Creditor Groups — Who Holds Tanzania's Domestic Debt?
Tanzania's TZS 39.3 trillion domestic debt stock is distributed across six distinct creditor categories, each with different risk appetites, mandates, and systemic implications. The dominance of domestic institutional investors (banks and pension funds) is both a sign of a deepening financial market and a source of concentration risk.
Commercial banks hold government securities primarily as liquid, risk-free assets meeting capital and liquidity requirements. Largest single creditor group by absolute amount.
BOT holds government debt through Open Market Operations, reverse repo collateral, and direct overdraft facilities to government. BOT holdings represent monetary financing risk.
Pension funds (NSSF, PPF, GEPF, etc.) are mandated to invest in government securities. Their long-duration liability profile makes them natural holders of government bonds. Second largest group.
Insurance firms invest premium reserves in government securities per regulatory requirements. Steady, modest growth reflecting gradual insurance sector deepening in Tanzania.
Specialised investment pools managed by BOT including heritage and development funds. Fastest growing creditor category in percentage terms (+41.4% YoY), though smallest by absolute amount.
Includes public institutions, private companies, non-resident investors, and individuals. This group recorded the highest absolute growth, suggesting broadening investor base or rising non-resident participation.
Creditor Share Composition — April 2025 vs April 2026
Comparing the creditor composition between April 2025 and April 2026 reveals a shift: pension funds and the "Others" category have grown their share while commercial banks have slightly declined, reflecting broadening of Tanzania's domestic investor base.
Growth Trends — Each Creditor Category Over Time
Tracking each creditor's absolute holdings (TZS billions) across April 2025, March 2026, and April 2026 reveals which groups are expanding exposure to government debt fastest — and which are consolidating. BOT special funds lead in growth rate while commercial banks lead in absolute volume.
Debt Instruments — What Form Does the Domestic Debt Take?
Understanding which instruments make up Tanzania's domestic debt is as important as knowing who holds them. Government bonds dominate (80.8% of the total), with overdraft/non-securitised debt rising to 15.0%. Treasury bills have declined sharply, signalling a deliberate shift toward longer-duration, lower-rollover-risk financing.
Month-by-Month Domestic Debt Stock — April 2025 to April 2026
The total domestic debt stock trajectory from April 2025 through April 2026, showing the pace and seasonality of government domestic borrowing. The steady upward trend reflects consistent budget financing needs, with the March 2026 acceleration driven by large bond issuances.
Crowding-Out Analysis — Does Government Borrowing Displace Private Credit?
One of the most important fiscal policy questions: does the government's domestic borrowing programme crowd out credit to the private sector? The evidence from Tanzania's 2025–2026 data presents a nuanced picture — private sector credit is growing strongly (23.6% YoY), but T-bill yields have declined sharply, suggesting crowding-out is not yet a dominant concern.
Systemic Risks by Creditor Category
Each creditor group's large exposure to government securities creates distinct systemic risks. For the banking sector, it creates sovereign-bank nexus risk. For pension funds, it concentrates pensioners' savings in a single sovereign issuer. For BOT, it blurs monetary and fiscal policy boundaries.
Complete Data Reference Tables
Full data from the Bank of Tanzania Monthly Economic Review May 2026, Table 2.6.6 — Government Domestic Debt by Creditor Category.
| Creditor Category | Apr 2025 (TZS B) | Apr 2025 Share | Mar 2026 (TZS B) | Mar 2026 Share | Apr 2026 (TZS B) | Apr 2026 Share | YoY Change (TZS B) | YoY Growth % | Direction |
|---|---|---|---|---|---|---|---|---|---|
| 🏦 Commercial Banks | 10,049.9 | 28.9% | 10,925.8 | 28.4% | 11,052.2 | 28.1% | +1,002.3 | +10.0% | ↑ Growing |
| 🏛️ Bank of Tanzania | 7,119.2 | 20.5% | 6,935.5 | 18.0% | 7,706.3 | 19.6% | +587.1 | +8.2% | ↑ Growing |
| 👴 Pension Funds | 9,171.1 | 26.4% | 10,463.9 | 27.2% | 10,426.4 | 26.5% | +1,255.3 | +13.7% | ↑↑ Fast growth |
| 🛡️ Insurance | 1,858.4 | 5.3% | 1,997.1 | 5.2% | 2,012.5 | 5.1% | +154.1 | +8.3% | ↑ Steady |
| 💎 BOT Special Funds | 564.5 | 1.6% | 788.4 | 2.1% | 798.4 | 2.0% | +233.9 | +41.4% | ↑↑↑ Fastest % |
| 🌐 Others | 5,996.8 | 17.3% | 7,337.0 | 19.1% | 7,339.8 | 18.7% | +1,343.0 | +22.4% | ↑↑ Fastest abs. |
| TOTAL Domestic Debt | 34,759.9 | 100% | 38,447.9 | 100% | 39,335.8 | 100% | +4,575.9 | +13.2% | ↑ Expanding |
| Instrument | Apr 2025 (TZS B) | Apr 2025 Share | Mar 2026 (TZS B) | Apr 2026 (TZS B) | Apr 2026 Share | YoY Change | YoY Growth % |
|---|---|---|---|---|---|---|---|
| Government Securities (Total) | 29,582.4 | 85.1% | 33,321.1 | 33,438.1 | 85.0% | +3,855.7 | +13.0% |
| — Treasury Bills (35/91/182/364-day) | 1,935.6 | 5.6% | 1,575.3 | 1,518.7 | 3.9% | −416.9 | −21.5% |
| — Government Stocks | 187.1 | 0.5% | 135.7 | 135.7 | 0.3% | −51.4 | −27.5% |
| — Government Bonds (2yr, 5yr, 7yr, 10yr, 15yr, 20yr, 25yr) | 27,459.6 | 79.0% | 31,609.9 | 31,783.7 | 80.8% | +4,324.1 | +15.7% |
| — Tax Certificates | 0.1 | 0.0% | 0.1 | 0.1 | 0.0% | — | — |
| Non-Securitised Debt | 5,177.5 | 14.9% | 5,126.8 | 5,897.6 | 15.0% | +720.1 | +13.9% |
| — Overdraft at BOT | 5,159.1 | 14.8% | 5,126.8 | 5,897.6 | 15.0% | +738.5 | +14.3% |
| TOTAL Domestic Debt | 34,759.9 | 100% | 38,447.9 | 39,335.8 | 100% | +4,575.9 | +13.2% |
| Month | Commercial Banks | Bank of Tanzania | Pension Funds | Insurance | BOT Special Funds | Others | TOTAL (TZS B) |
|---|---|---|---|---|---|---|---|
| Apr-25 | 10,049.9 | 7,119.2 | 9,171.1 | 1,858.4 | 564.5 | 5,996.8 | 34,759.9 |
| Mar-26 | 10,925.8 | 6,935.5 | 10,463.9 | 1,997.1 | 788.4 | 7,337.0 | 38,447.9 |
| Apr-26 | 11,052.2 | 7,706.3 | 10,426.4 | 2,012.5 | 798.4 | 7,339.8 | 39,335.8 |
| YoY Change | +1,002.3 | +587.1 | +1,255.3 | +154.1 | +233.9 | +1,343.0 | +4,575.9 |
| YoY Growth % | +10.0% | +8.2% | +13.7% | +8.3% | +41.4% | +22.4% | +13.2% |
Outlook — Domestic Debt Creditor Dynamics: What to Watch in 2026
Tanzania's domestic debt market is deepening, with more creditor groups actively participating. However, the rising overdraft, the concentration of pension fund assets in sovereign bonds, and the pace of total debt growth are critical variables for the remainder of 2026.
- →Oversubscribed T-bill auctions (2× in April 2026) show strong domestic demand for government paper — no financing constraint in the near term
- →T-bill yields falling to 5.06% (April 2026) from 8.86% (April 2025) — government borrowing costs declining, easing interest payment burden
- →Shift to long-tenor bonds (80.8% of debt in government bonds) reduces rollover risk and aligns debt maturity with infrastructure asset lives
- →Private credit not crowded out — growing 23.6% YoY alongside 13.2% domestic debt growth; banking sector liquidity remains adequate
- →Broadening investor base — "Others" category fastest absolute growth (+22.4%) may indicate non-resident participation and market development
- →Revenue performance strong — March 2026 revenue TZS 8.5% above target, reducing marginal borrowing pressure
- →Overdraft growing 14.3% YoY to TZS 5.9T — overdraft at BOT is the least disciplined form of financing, signalling budget execution cash-flow gaps
- →Pension fund concentration — TZS 10.4T (26.5% of domestic debt) in pension fund hands creates systemic risk if government faces debt restructuring pressures in the future
- →Interest payments rising — TZS 379B in interest payments (March 2026 alone), down from estimate but still a significant recurrent budget line item
- →Domestic debt stock growing faster than GDP — at 13.2% YoY, domestic debt growth outpaces Tanzania's nominal GDP growth of ~10%, pointing to a rising domestic debt/GDP ratio
- →BOT monetary-fiscal boundary — BOT holdings of TZS 7.7T including overdraft risks undermining inflation targeting credibility if the government relies more heavily on monetary financing
- →5-yr & 10-yr bond yields declining (9.54% and 9.40% April 2026) may not adequately compensate longer-term investors for duration and inflation risks