Debt

By the end of 2025, Tanzania's national debt stock stood at USD 50,794.2 million, with the Bank of Tanzania assessing public debt as sustainable with a moderate risk of distress.

Tanzania's debt position reflects a steady expansion of borrowing to finance infrastructure and development projects, balanced by sustainability metrics that remain comfortably within prudential thresholds.

The Central Government Debt Stock continues to be dominated by external obligations, while domestic borrowing through Government securities has grown as a complementary financing channel.

Authorities maintain that the debt-to-GDP ratio, in net present value terms, stays well below the 55% sustainability ceiling, supporting Tanzania's credit profile and access to international financing.

Central Government Debt Stock (June 2025)

As of the end of June 2025, the Central Government Debt Stock stood at TZS 109,441.30 billion (USD 41,642.51 million).

This represented a 12.96% increase from the TZS 96,884.18 billion (USD 36,698.55 million) recorded in June 2024.

External debt accounted for TZS 73,938.51 billion, equivalent to 67.56% of the total stock.

Domestic debt amounted to TZS 35,502.78 billion, representing 32.44% of the total.

The growth in the debt stock was primarily driven by new domestic borrowing through the issuance of Government securities, disbursements from external creditors, and the depreciation of the Tanzanian shilling against the US Dollar.

National Debt Position at End-2025

By the end of 2025, the national debt stock stood at USD 50,794.2 million.

External debt represented 69.5% of this total stock.

In terms of creditor composition, multilateral institutions continued to account for the largest share of external debt at 58.2%, followed by commercial lenders.

This creditor mix indicates a continued reliance on concessional and semi-concessional financing from multilateral development partners.

Debt Sustainability Analysis FY 2024/25

According to the Bank of Tanzania, public debt remains sustainable with a moderate risk of distress.

The Debt Sustainability Analysis (DSA) for 2024/2025 indicates that the ratio of public debt to GDP, in net present value terms, has declined to 40.6%.

This compares to 41.1% in 2023/2024^[1], signalling an improving sustainability trajectory.

The current ratio remains well below the maximum sustainability threshold of 55%, providing fiscal space for continued development borrowing.

Debt Service in FY 2024/25 Fiscal Performance

Public debt servicing remains an explicit budgetary commitment alongside public service wages, election financing, and infrastructure delivery under the National Development Plan.

In FY 2024/25, Recurrent Expenditure stood at TZS 33,959.56 billion, equivalent to 68.8% of total spending and 97% of its annual target.

This slight underperformance reflected continued pressure from statutory obligations, including wages, debt service, and transfers.

Strong domestic revenue performance, with total domestic revenue reaching TZS 34,845.9 billion (100.7% of target)^[2], supported the Government's capacity to meet debt service obligations.

Country Risk and Macroeconomic Backdrop

Tanzania's country risk profile reflects a combination of stable macroeconomic fundamentals, manageable debt levels, and strong foreign exchange reserves^[4].

The fiscal deficit (including grants) was 3.4% of GDP in the 2024/2025 financial year and is expected to decrease to 3.0% in 2025/26^[3].

By the end of December 2025, the stock of foreign exchange was USD 6,329 million, sufficient to cover 4.9 months of projected imports.

This reserve buffer comfortably exceeds both the national target of 4 months and the EAC benchmark of 4.5 months, reinforcing external debt repayment capacity.

The Tanzanian shilling averaged TZS 2,452.76 per USD in December 2025, a slight 1.3% depreciation from the same period in 2024, limiting valuation pressure on external debt.

Policy Framework and Debt Management Reforms

Public finance reforms aim to modernize the tax system, improve expenditure management, enhance revenue mobilization, and strengthen public debt sustainability.

These reforms are integrated within the broader institutional and governance agenda designed to deepen accountability and manage evolving development challenges.

Tanzania has a long-standing history of engagement with international financial institutions on debt management, having signed debt relief agreements during the Mkapa administration as part of liberalization and fiscal discipline reforms.

The current policy direction emphasizes increased private sector participation through innovative financing mechanisms, including Public-Private Partnerships (PPPs), to complement public borrowing in financing the National Development Plan.

Investment Opportunities in Tanzania's Debt Market

The expansion of domestic debt to TZS 35,502.78 billion (32.44% of central government debt) as of June 2025 reflects a deepening Government securities market open to institutional investors.

New domestic borrowing through the issuance of Government securities was identified as a primary driver of debt stock growth, indicating regular primary issuance flow for Treasury bills and bonds.

For external creditors, the dominance of multilateral institutions at 58.2% of external debt leaves room for commercial lenders, who already form the second-largest creditor category.

A debt-to-GDP ratio of 40.6% (NPV), well below the 55% sustainability ceiling, combined with a moderate-risk DSA rating, supports investor confidence in sovereign instruments.

Improved corporate debt-servicing capacity is reflected in non-performing loans declining to 3.3% of gross loans, below the maximum tolerable limit of 5.0%, signalling a healthier credit environment for private debt instruments as well.

Last Update: May 2026

References

1. https://www.bot.go.tz/Publications/Regular/Monetary%20policy%20report/en/2026011919182725.pdf (Guide reference #3)
2. https://www.mof.go.tz/uploads/documents/en-1759253260-BER%20Q4%202024-25%20as%20Sep.pdf (Guide reference #50)
3. https://www.mof.go.tz/uploads/documents/en-1759394832-BUDGET%20SPEECH%202025-%2026.pdf (Guide reference #56)
4. https://www.bot.go.tz/Publications/Regular/Financial%20Stability/sw/2025072310063848.pdf (Guide reference #81)