In February 2024, Tanzania's external debt stood at TZS 82,678,629 million, reflecting a decrease of 3% from the previous month's figure of TZS 85,477,630 million. However, compared to the same period last year, there was a notable increase of 12%. This suggests a continuing trend of growing external debt, albeit with a slight monthly decline.

On the other hand, Tanzania's domestic debt increased to TZS 31,241,500 million in February 2024, marking a 2% rise from January 2023's figure of TZS 30,505,400 million. Compared to the same period last year, domestic debt has seen a significant increase of 15%, indicating a considerable expansion in the country's internal borrowing.

When considering the total debts, including both external and domestic, Tanzania's total debt amounted to TZS 113,920,129 million in February 2024. This reflects a decrease of 2% from the previous month's total debt of TZS 115,983,030 million. However, compared to the same period last year, there is a noticeable increase of 13% in total debts.

While there has been a slight decrease in total debt from the previous month, the overall trend is one of increasing indebtedness for Tanzania. The rise in both external and domestic debts indicates that the government is relying on borrowing to finance its development projects and meet its financial obligations. This could raise concerns about the country's debt sustainability and its ability to service these debts in the long term, especially considering the significant year-on-year increase in debt levels.

Tanzania's debts indicate impacts regarding its economic growth:

Reliance on External Financing:

The increasing external debt suggests that Tanzania is relying on borrowing from foreign sources to fund its development projects and meet its financial needs. This could indicate that the country lacks sufficient domestic resources or access to capital markets at favorable rates to finance its economic activities. While external borrowing can provide short-term solutions for financing development, it also exposes the country to risks such as exchange rate fluctuations and higher interest payments, which could affect its economic stability.

Investment in Domestic Development:

The rising domestic debt implies that Tanzania is also focusing on financing its economic growth through internal borrowing. This could indicate that the government is investing in infrastructure, social programs, or other development initiatives to stimulate economic activity within the country. However, an increasing domestic debt burden could potentially crowd out private investment and lead to higher interest rates, which may hinder long-term economic growth.

Debt Sustainability Concerns:

The significant year-on-year increase in total debts raises concerns about Tanzania's debt sustainability. While borrowing can be a useful tool for financing development, excessive debt accumulation without corresponding economic growth can lead to debt distress and financial instability. It's essential for Tanzania to ensure that its borrowing is productive and that debt levels remain manageable relative to its economic output and revenue generation capacity.

Impact on Economic Growth:

While borrowing can provide short-term stimulus to economic growth by financing infrastructure projects and other development initiatives, sustained economic growth requires more than just debt accumulation. Tanzania needs to ensure that its borrowing is being used effectively to invest in projects that will generate long-term economic benefits, such as improving productivity, enhancing human capital, and promoting sustainable development.

Tanzania's debt data reflects a mixed picture for economic growth. While borrowing can support investment and development, there are also risks associated with rising debt levels, both domestically and externally. It's crucial for Tanzania to manage its debts prudently, invest in projects that promote sustainable economic growth, and work towards improving its revenue generation capacity to ensure long-term economic stability and prosperity.