The Bank of Tanzania (BOT) released its Monthly Economic Review-February 2026, which covers key macroeconomic indicators for the year ending January 2026.
Table of Contents
GDP Growth
No comments or data were shared by the BOT in this Review.
Inflation
Headline inflation eased to 3.3% in January 2026, down from 3.6% in December 2025, remaining comfortably within the national SADC and EAC target range of 3-5%.
This moderation was largely driven by a reduced contribution from core inflation and a slowdown in unprocessed food inflation.
Food inflation decreased to 5.7% from 6.7% the previous month, as prices for staple and alternative food crops like finger millet, sorghum, and beans stabilized.
Core inflation slowed to 2.2% from 2.7% in January 2025 due to slower price growth in clothing, footwear, and household equipment.
Energy, fuel, and utilities inflation rose to 5.2%, primarily driven by increased prices for firewood and charcoal.
Monetary Policy
Policy The Monetary Policy Committee maintained the Central Bank Rate (CBR) at 5.75% for the quarter ending March 2026, supported by an inflation outlook expected to stay within the 3-5% target.
The Bank effectively steered the 7-day interbank rate within +/-2 percentage points of the CBR. Extended broad money (M3) grew by a robust 26.3% during the month.
Credit to Private Sector
Credit extended to the private sector grew by 23.5%. Mining and quarrying activities saw the highest growth at 91.4%, followed by trade at 50.0% and transport/communication at 34.2%. Personal loans held the largest share of private sector credit at 35.6%.
Interest Rates
Banks’ interest rates remained broadly stable. The overall lending rate eased slightly to 15.07% from 15.24% in December 2025, and negotiated lending rates for prime customers dropped to 12.25%. The overall time deposit rate was 8.33%, with the short-term interest rate spread narrowing to 5.79 percentage points.
Financial Markets
Government Securities Market
The Bank conducted two Treasury bill auctions with a combined tender size of TZS 390.9 billion. Due to adequate liquidity, the auctions were oversubscribed with TZS 514.2 billion in bids, yielding a stable weighted average of 5.89%. A 10-year Treasury bond auction for TZS 144.6 billion was also oversubscribed, with yields easing to 11.30%.
Interbank Cash Market
The market efficiently facilitated shilling liquidity with a total turnover of TZS 2,868.9 billion, heavily dominated by 7-day tenor transactions, which accounted for 73.2% of market activity. The overall interest rate edged up to 6.40%.
Interbank Foreign Exchange Market
Liquidity remained adequate, though total transactions decreased to USD 88.2 million from USD 178.6 million in the preceding month due to seasonal flows. The BOT participated with a net sale of USD 58 million to mitigate volatility, while the shilling depreciated to trade at an average of TZS 2,477.94 per USD.
Government Budgetary Operations
In December 2025, domestic revenue collections reached TZS 4,774.6 billion, surpassing the monthly target by 3%. Tax revenue drove this strong performance, reaching TZS 3,802.7 billion (6.5% above target). Total expenditure was TZS 3,671.7 billion, split between TZS 2,643.8 billion for recurrent expenditures and TZS 1,027.8 billion for development projects.
Debt Developments
The total national debt stock stood at USD 51,079.8 million at the end of January 2026, representing a marginal 0.1% increase from the previous month.
External Debt
The external debt stock rose by 0.6% to USD 35,750.7 million, representing 70.0% of the total national debt. Public debt comprised 82.6% of this external stock. Multilateral institutions held the largest creditor share at 58.2%. During the month, USD 122.9 million in external loans were disbursed, and USD 98.5 million went to debt service payments.
Domestic Debt
The stock of domestic debt increased by 1.9% to TZS 38,599.6 billion. The portfolio is highly concentrated in long-term Treasury bonds, with commercial banks and pension funds holding 55.2% of the domestic debt.
External Sector Performance
The external sector continued to improve, as evidenced by the narrowing of the current account deficit to USD 1,927.8 million in the year ending January 2026 from USD 2,448.5 million in the corresponding period in 2025. The improvement was largely driven by higher exports of goods, particularly gold, along with service receipts from tourism.
Although imports rose during the period, growth in the import bill was moderated by lower global oil prices.
Building on this performance, foreign exchange reserves rose to USD 6,295.3 million at the end of January 2026, from USD 5,323.6 million recorded at the end of January 2025.
At this level, reserves were sufficient to cover 4.8 months of projected imports of goods and services, remaining above both the national and EAC benchmarks.
Exports
In the year ending January 2026, exports of goods and services increased by 12.7% to USD 18,172.5 million compared with the corresponding period in 2025.
Exports of goods, which account for the largest share of total exports, rose by 16.7% to USD 10,795.7 million from USD 9,251.4 million in the same period in 2025.
The main contributors to this growth were gold, manufactured goods, tobacco, and coffee, which together accounted for about 70% of total goods exports.
Gold exports increased by 39.3% to USD 4,900.7 million in the year ending January 2026 from USD 3,517.5 million in the corresponding period in 2025, largely explained by favourable global prices coupled with increased production.
Exports of manufactured goods rose by 28.9% to USD 1,702.7 million from USD 1,320.5 million, supported by increased demand from neighbouring countries.
Meanwhile, traditional exports increased by 6.9% to USD 1,589.4 million in the year ending January 2026 compared with the corresponding period in 2025.
The performance was mixed across commodities, with tobacco recording notable growth driven by both price and volume effects, and coffee benefiting mainly from favourable prices. In contrast, cashewnut exports declined due to price and volume effects.
On a monthly basis, goods exports amounted to USD 1,082.3 million in January 2026, from USD 737.7 million in January 2025, largely on account of strong performance in gold and manufactured goods.
During the period under review, service receipts increased by 7.2% to USD 7,376.9 million from USD 6,879.1 million recorded in the corresponding period in 2025.
The increase was mainly driven by higher earnings from travel and transport services.
Travel receipts amounted to USD 3,969.6 million, slightly above USD 3,933.7 million in the corresponding period of 2025, supported by a 6.1% increase in international visitor arrivals to 2,289,867.
In the same period, transport service receipts rose to USD 2,875.4 million from USD 2,365 million in the same period in 2025, largely on account of higher freight earnings from transit goods.
On a monthly basis, service receipts amounted to USD 586.5 million in January 2026, higher than USD 583.6 million recorded in January 2025.
Imports
Imports of goods and services amounted to USD 18,285.4 million in the year ending January 2026, representing a 6.6% increase from the level recorded in the corresponding period in 2025.
The growth was largely driven by higher imports of industrial supplies, industrial transport equipment, freight services, as well as machinery and mechanical appliances, primarily capital and intermediate goods.
Conversely, imports of refined white petroleum products, which account for about 13% of the total import bill, declined to USD 2,380.1 million from USD 2,552.3 million in the same period in 2025. The decrease resulted from continued moderation in global oil prices.
On a monthly basis, imports of goods amounted to USD 1,493.9 million in January 2026, up from USD 1,198.2 million recorded in January 2025.
Services payments amounted to USD 3,202 million in the year ending January 2026, higher than USD 2,808.3 million in the same period in 2025, mainly driven by higher freight payments, consistent with the increase in goods import bills.
On a monthly basis, service payments increased to USD 305 million in January 2026, compared to USD 225.9 million in January 2025.
The deficit in the primary income account widened in the year ending January 2026 to USD 2,093.5 million, from USD 1,955.8 million in the same period in 2025, mainly due to increased payments of income on equity and interest.
On a monthly basis, the deficit widened to USD 193.9 million in January 2026, compared with USD 170.3 million in January 2025.
The secondary income surplus decreased to USD 278.6 million in the year ending January 2026, from USD 536.8 million in the corresponding period in 2025, largely associated with reduced personal transfers.
On a monthly basis, the surplus was USD 12.7 million in January 2026, compared to USD 32.8 million in January 2025.
