Tanzania’s financial sector has experienced steady expansion from 2021 to 2024, with domestic credit growing from 27.37 trillion TZS in 2021 to 46.82 trillion TZS in 2024, reflecting increased economic activity. Private sector lending also rose significantly, from 19.64 trillion TZS to 33.76 trillion TZS, showing business growth. Meanwhile, foreign financial assets fluctuated, declining from 12.24 trillion TZS in 2021 to 9.66 trillion TZS in 2023, before recovering to 12.09 trillion TZS in 2024. The money supply (M3) expanded from 32.12 trillion TZS in 2021 to 47.09 trillion TZS in 2024, indicating increased liquidity and banking activity. These trends highlight Tanzania’s growing financial sector, with expanding credit and liquidity supporting economic growth.

Analyzing Tanzania's monetary and financial data from January 2021 to February 2025 reveals key trends across various financial indicators:

1. Foreign Financial Assets (Net)

• 2021 average: 12,240,636 million TZS​
• 2022 average: 10,571,449 million TZS​
• 2023 average: 9,663,721 million TZS​
• 2024 average: 12,099,428 million TZS​

Trend Analysis: There was a decline in net foreign financial assets from 2021 to 2023, followed by a recovery in 2024. This fluctuation may reflect changes in foreign exchange reserves and international investment positions.​

2. Domestic Credit

• 2021 average: 27,371,154 million TZS​
• 2022 average: 34,595,463 million TZS​
• 2023 average: 41,047,502 million TZS​
• 2024 average: 46,824,755 million TZS​

Trend Analysis: Domestic credit exhibited consistent growth over the period, indicating an expansion in lending activities within the economy.​

3. Government Claims (Net)

• 2021 average: 6,501,863 million TZS​
• 2022 average: 9,562,896 million TZS​
• 2023 average: 11,603,732 million TZS​
• 2024 average: 11,576,752 million TZS​

Trend Analysis: Net claims on the government increased from 2021 to 2023, stabilizing in 2024. This suggests increased government borrowing during the initial years, possibly for developmental projects or budgetary support, followed by stabilization.​

4. Claims on Private Sector

• 2021 average: 19,643,860 million TZS​
• 2022 average: 23,815,125 million TZS​
• 2023 average: 28,528,613 million TZS​
• 2024 average: 33,759,428 million TZS​

Trend Analysis: There was a steady increase in claims on the private sector, reflecting robust credit growth. Notably, private sector credit expanded by approximately 22% in both July and August 2023, before moderating to 19.5% in September 2023, surpassing the initial projection of 16.4% for December 2023. This growth is attributed to an improved business environment and supportive monetary policies. ​

5. Reserve Money (M0)

• 2021 average: 7,913,564 million TZS​
• 2022 average: 9,103,874 million TZS​
• 2023 average: 9,922,327 million TZS​
• 2024 average: 11,049,539 million TZS​

Trend Analysis: Reserve money showed consistent growth, indicating an increase in the central bank's monetary base.​

6. Extended Broad Money (M3)

• 2021 average: 32,127,715 million TZS​
• 2022 average: 36,201,424 million TZS​
• 2023 average: 41,107,812 million TZS​
• 2024 average: 47,090,824 million TZS​

Trend Analysis: M3, which includes M2 plus foreign currency deposits, grew steadily, reflecting an overall increase in the money supply.​

7. Broad Money (M2)

• 2021 average: 24,773,941 million TZS​
• 2022 average: 28,296,534 million TZS​
• 2023 average: 32,083,035 million TZS​
• 2024 average: 35,505,154 million TZS​

Trend Analysis: M2, comprising currency in circulation and local currency deposits, also exhibited consistent growth, indicating increased liquidity in the economy.​

8. Foreign Currency Deposits (FCD)

• 2021 average: 7,353,728 million TZS​
• 2022 average: 7,904,890 million TZS​
• 2023 average: 9,024,777 million TZS​
• 2024 average: 11,585,670 million TZS​
• FCD in USD (2024 average): 4,355 million USD​

Trend Analysis: Foreign currency deposits increased annually, both in TZS and USD terms, suggesting growing confidence in foreign currency holdings.​

Key Observations:

• Consistent Growth in Domestic Credit: The steady rise in domestic credit indicates an expanding lending environment, supporting economic activities.​
• Fluctuations in Foreign Financial Assets: The decline followed by a recovery in net foreign financial assets may reflect changes in foreign exchange reserves and international investment positions.​
• Robust Private Sector Credit Expansion: The private sector experienced significant credit growth, with rates reaching approximately 22% in mid-2023, surpassing initial projections. This surge is linked to supportive monetary policies and an improved business environment. ​
• Expansion of Monetary Aggregates: The consistent growth in monetary aggregates (M0, M2, M3) indicates an increasing money supply, aligning with economic expansion.

The monetary and financial data for Tanzania from 2021 to 2024 in millions of TZS:

Tanzania's monetary and financial trends from 2021 to 2024, showing overall economic expansion with a few notable trends:

1. Domestic Credit Growth (↑)

• Domestic credit has increased consistently from 27.37 trillion TZS in 2021 to 46.82 trillion TZS in 2024.
• This suggests expanding economic activity, higher lending to businesses and households, and greater access to financial resources.

2. Foreign Financial Assets (Fluctuations)

• Declined from 12.24 trillion TZS in 2021 to 9.66 trillion TZS in 2023, before recovering to 12.09 trillion TZS in 2024.
• This suggests a temporary reduction in foreign reserves, possibly due to trade imbalances or forex interventions, followed by recovery.

3. Increased Government Borrowing (↑)

• Government net claims grew from 6.50 trillion TZS in 2021 to 11.57 trillion TZS in 2024.
• Indicates rising government debt and reliance on credit, which could be used for infrastructure projects or fiscal deficit financing.

4. Private Sector Credit Expansion (↑)

• Increased from 19.64 trillion TZS in 2021 to 33.76 trillion TZS in 2024.
• This suggests improved business confidence and investment, with private sector borrowing more to expand operations.

5. Money Supply Growth (M0, M2, M3) (↑)

• Reserve Money (M0) increased from 7.91 trillion TZS in 2021 to 11.04 trillion TZS in 2024.
• Broad Money (M2) grew from 24.77 trillion TZS in 2021 to 35.50 trillion TZS in 2024.
• Extended Broad Money (M3) increased from 32.12 trillion TZS in 2021 to 47.09 trillion TZS in 2024.
• A growing money supply indicates strong economic expansion, rising liquidity, and higher banking activities.

6. Rising Foreign Currency Deposits (FCD)

• Increased from 7.35 trillion TZS in 2021 to 11.58 trillion TZS in 2024.
• Foreign deposits in USD reached 4.35 billion in 2024, showing growing confidence in Tanzania’s financial sector from international investors.

Key Takeaways:

✅ Tanzania's economy is expanding, with increased money supply, credit, and financial activity.
✅ Private sector growth is strong, showing businesses are investing and borrowing more.
✅ Government borrowing has increased, which could either boost development or create fiscal risks.
✅ Foreign reserves saw fluctuations, indicating external financial pressures but a recovery in 2024.
✅ Liquidity is improving, supporting higher economic participation.