Debt

tanzania debtTanzania Debt

Tanzania’s total national debt stood at USD21.5b (45% of GDP) as of June 2016, compared to USD19.1b (41.1% of GDP) recorded in June 2014, representing an increase of 13%.

The growth of the Tanzanian national debt is attributed to increased borrowing from both external and domestic sources to finance public infrastructure projects.

In 2015, the total public debt of Tanzania was USD18.9b (39% of GDP) while private sector external debt was USD2.7b (5.6% of GDP).

Tanzania’s public debt consisted of external debt at USD12.8b and domestic debt recorded USD6b.

According to the International Monetary Fund (IMF), Tanzania maintains a sustainable debt level, i.e. the country faces a low risk of external and domestic public debt distress.

Tanzania External Debt

Tanzania’s total external debt reached USD15.5b (32% of GDP) in June 2015, an increase of 15.1% from USD13.2b (30% of GDP) in June 2014.

The increase was mainly due to new borrowing to finance infrastructure projects, and exchange rate movements.

The composition of external debt by currency shows that 58.2% of Tanzania’s external debt was denominated in USD in 2015 albeit at a lower proportion than 62.2% in 2013.

The Euro denominated debt accounted for 23.4% of total external debt of Tanzania, compared to 21.2% in 2013.tanzania external debt currency composition 2015 2014

Tanzania Public External Debt

The Public and Publicly Guaranteed (PPG) external debt of Tanzania rose by 14.6% to USD12.8b in June 2015 from USD10.9b in June 2014.

External public debt is debt owed by the Government to external creditors such as the International Development Association (IDA), Africa Development Bank (AfDB), World Bank (WB), International Monetary Fund (IMF).

Others are bilateral creditors (other countries) such as China, the US, the UK, Germany, and Japan, as well as private institutions.

More than 50% of Tanzania’s total public external debt in 2015 was owed to multilateral institutions, of which the International Development Association (IDA) and the African Development Bank (AfDB) constitute the largest creditors.

Tanzania Domestic Debt

Tanzania’s domestic debt increased from USD2b in 2010 to USD4b in 2014 and USD6b in 2015.

The rise in 2015 is explained by the inclusion of Government obligations in pension funds’ portfolios.

The domestic debt of Tanzania is comprised mainly of marketable securities and non-marketable securities.

Marketable securities include treasury bills (35, 91,182 and 364 days) and treasury bonds (2, 5, 7, 10 and 15 Years) whereas non-marketable securities include special bonds and Government stocks.

According to a report of the United Nations Conference on Trade and Development (UNCTAD), a higher level of domestic debt in Tanzania is likely to be sustained without compromising the country’s economic growth.