Total Debt Stock: The report presents data on both external and domestic debt stocks. The total debt stock has shown a rising trend over time, with figures such as USD 42,681.0 million in June 2023 and USD 45,555.8 million in June 2024.

1. External Debt: The external debt stock includes loans from various categories such as bilateral, multilateral, and commercial debts, with a significant portion owed by the central government. For instance, the external debt stock was USD 33,333.8 million in June 2024, up from USD 30,201.7 million in March 2024.
2. Domestic Debt: The domestic debt stock was USD 12,158.0 million as of June 2024, contributing 28.7% of the total debt stock.
3. Exchange Rates: The exchange rate of Tanzanian Shilling (TZS) against the US Dollar (USD) has seen a gradual depreciation, from TZS 2,307.9/USD in September 2022 to TZS 2,626.9/USD in June 2024.
4. Debt Service: The external debt service as a percentage of exports has fluctuated, with figures such as 7.8% in March 2023 and 24.6% in June 2024.
5. Sectoral Distribution of GDP: The report also provides a breakdown of GDP by various sectors, showing the performance of agriculture, industry, construction, and mining sectors.

Tanzania's debt development and economic indicators as a key aspects of the country's economic trajectory

Tanzania's economic development is at a critical juncture. While the country appears to be investing in its growth, the rising debt levels and associated risks underline the importance of effective debt management and the need for policies that support economic diversification, increased productivity, and sustainable growth. Without careful management, the benefits of borrowing could be overshadowed by the burdens of debt service, potentially slowing down the country's economic momentum.

1. Rising Debt Levels

• Total Debt Increase: The increase in total debt from USD 42,681.0 million in June 2023 to USD 45,555.8 million in June 2024 suggests that Tanzania is increasingly relying on both external and domestic borrowing. This could indicate efforts to finance development projects or manage budget deficits but also raises concerns about debt sustainability.
• External vs. Domestic Debt: The fact that external debt constitutes a significant portion of the total debt (USD 33,333.8 million in June 2024) compared to domestic debt (USD 12,158.0 million in June 2024) reflects Tanzania's reliance on foreign sources for financing. This dependency could make the country vulnerable to external shocks, such as changes in global interest rates or exchange rates.

2. Exchange Rate Depreciation

• The depreciation of the Tanzanian Shilling (TZS) against the US Dollar from TZS 2,307.9/USD in September 2022 to TZS 2,626.9/USD in June 2024 indicates a weakening of the local currency. This depreciation can increase the cost of servicing external debt and contribute to inflationary pressures, which can negatively impact the economy, particularly for import-dependent sectors.

3. Debt Service Burden

• The rise in external debt service as a percentage of exports from 7.8% in March 2023 to 24.6% in June 2024 suggests that a growing portion of export earnings is being used to service debt. This could limit the resources available for other critical economic needs, such as infrastructure development, social services, or investment in productive sectors.

4. Sectoral GDP Distribution

• The data on sectoral distribution of GDP highlights the structure of Tanzania's economy, with agriculture, industry, construction, and mining being key contributors. The performance of these sectors will be crucial in determining the country's ability to generate the necessary revenue to manage its debt and support economic growth.

5. Economic Development Challenges

• The combination of rising debt, currency depreciation, and increasing debt service obligations points to potential challenges in Tanzania's economic development. While borrowing can help finance important projects and stimulate growth, it also carries risks if the debt is not managed prudently. If not accompanied by robust economic growth, these factors could lead to economic instability, reduced investment, and slower development progress.