Tanzania’s total external debt stood at USD 33,905.1 million in January 2025, reflecting a 0.5% decline from USD 34,075.5 million in December 2024 due to ongoing repayments. The government accounted for 76.4% (USD 25,896.7 million) of total external debt, while the private sector held 23.6% (USD 8,004.7 million), down by 1.8%. The decline in private sector borrowing may indicate reduced access to foreign credit, while high government debt levels raise concerns about future repayment obligations.

1. Total External Debt Stock Slightly Declined

• Tanzania’s total external debt stood at USD 33,905.1 million in January 2025, reflecting a 0.5% decline from USD 34,075.5 million in December 2024.
• The decrease was mainly due to repayments made by both the government and private institutions.

2. Government vs. Private Sector Borrowing

• Government external debt accounted for 76.4% (USD 25,896.7 million) of total external debt.
• Private sector external debt accounted for 23.6% (USD 8,004.7 million).

Comparison of Government and Private Sector External Debt (January 2025)

3. Implications of External Debt Trends

✅ The government remains the largest borrower (76.4%), indicating reliance on external financing for major projects.
✅ The private sector's external debt share (23.6%) shows businesses are accessing foreign funding but at a declining rate (-1.8%).
⚠ The reduction in private sector borrowing may limit business expansion and foreign investment in Tanzania.
⚠ Debt repayments are helping reduce total debt, but the government still holds a significant portion of external liabilities.

Key Insights from Tanzania’s External Debt (January 2025)

1. The Government Remains the Biggest Borrower (76.4%)

• The government’s external debt stood at USD 25,896.7 million, accounting for 76.4% of total external debt.
• This suggests that public projects such as infrastructure, energy, and social services are heavily financed by external loans.

What It Means:

✅ Government borrowing supports long-term development, ensuring investments in key sectors like transport and energy.
⚠ A high share of external debt means future repayments could put pressure on national finances, especially if revenue growth is slow.

2. Private Sector Borrowing is Declining (-1.8%)

• Private sector external debt dropped to USD 8,004.7 million (23.6%), a 1.8% decline from December 2024.
• This indicates reduced access to foreign credit by businesses or lower demand for external financing.

What It Means:

⚠ Private companies may be facing challenges in securing international loans, which could slow business expansion.
✅ A reduction in private sector borrowing could signal that companies are focusing on local financing options.

3. Total External Debt is Declining (-0.5%)

• The total external debt declined slightly by 0.5%, showing that both the government and private sector are repaying some of their loans.

What It Means:

✅ Debt repayments are ongoing, helping to manage overall debt levels.
⚠ Despite repayments, the government still holds a significant portion of external debt, meaning fiscal risks remain.

Overall Economic Implications

🔹 Positive Signs:
✅ Government borrowing is supporting infrastructure and public services.
✅ Debt repayments are reducing total external liabilities.
✅ Private sector reliance on foreign debt is decreasing, possibly indicating local financing alternatives.

🔸 Challenges:
⚠ A high government share (76.4%) means future debt servicing costs could strain national finances.
⚠ A decline in private sector borrowing could slow economic expansion and private investment.
⚠ Continued reliance on external debt means Tanzania remains exposed to exchange rate fluctuations and global credit conditions.