The Bank of Tanzania (BOT) released its Monthly Economic Review—April 2026, covering key macroeconomic indicators for the year ending March 2026, with data reflecting sustained GDP growth, stable inflation, a 38.5% surge in gold exports, and adequate foreign exchange reserves despite a widening current account deficit driven by higher import demand.
Output Performance
The Tanzanian economy maintained strong momentum in the fourth quarter of 2025, expanding by 5.7%, up from 5.4% in the corresponding quarter of 2024.
Growth was broad-based, driven primarily by agriculture, financial and insurance services, and construction.
Based on high-frequency indicators and accounting for the impact of geopolitical tensions in the Middle East, GDP growth is projected at 6.2% in the first quarter of 2026 and 6.1% in the second quarter, supported by continued improvement in construction, agriculture, and financial and insurance services.
Inflation
Headline annual inflation held steady at 3.2% in March 2026, unchanged from the preceding month, remaining within both the national target and the regional benchmarks of the Southern African Development Community (SADC) and East African Community (EAC).
In the near term, inflation is expected to be shaped primarily by risks stemming from the Middle East crisis, though improving domestic conditions—including adequate food supply, a stable exchange rate, and prudent monetary policy—are expected to partially offset the impact of higher global oil and fertilizer prices.
The BOT projects headline inflation to remain within the 3–5% target range throughout 2026.
Core inflation, which excludes volatile components such as unprocessed food and energy, edged up to 2.2% in March 2026 from 2.1% in the preceding month, and may rise slightly in the near term due to supply-side pressures linked to the Middle East conflict.
Annual food inflation eased to 5.5% in March 2026, slightly below the 5.7% recorded in the preceding month, consistent with improved food supply following expected harvest increases across most parts of the country.
Food inflation is anticipated to continue declining.
Food stocks held by the National Food Reserve Agency (NFRA) stood at 533,634 tonnes at the end of March 2026, down from 560,008 tonnes in the preceding month, following the release of 26,374 tonnes of maize and paddy to traders to help stabilize retail food prices.
Energy, fuel, and utilities inflation slowed further to 2.1% in March 2026, from 2.8% in the preceding month, and remained significantly below the 7.9% recorded in the corresponding period of 2025.
The decline was mainly driven by lower charcoal and firewood prices, though retail pump prices for petrol, diesel, and kerosene edged slightly higher, mirroring the sharp rise in global market prices for white petroleum products linked to the Strait of Hormuz crisis.
Core inflation contributed 1.7 percentage points to the headline rate in March 2026, unchanged from the corresponding month of 2025.
Monetary Policy
At its April 2026 meeting, the Monetary Policy Committee (MPC) decided to maintain the Central Bank Rate (CBR) at 5.75% for the second quarter of 2026, reflecting a cautious stance aimed at balancing inflation risks against the growth outlook amid heightened global uncertainty.
To strengthen monetary policy transmission, the MPC narrowed the CBR corridor from ±200 basis points to ±150 basis points, effective 1 April 2026, with monetary policy implementation to focus on steering the 7-day interbank cash market (IBCM) rate within a ±1.5 percentage point range around the CBR.
Liquidity conditions in the interbank market remained adequate in March 2026, with the 7-day interbank rate staying within the CBR corridor.
Banks’ demand for central bank support continued to decline, with reverse repo uptake falling from TZS 581.4 billion in February to TZS 430.8 billion in March 2026.
Extended broad money (M3) grew by 23.2% in March 2026, slightly below the 24.5% recorded in February 2026.
Private sector credit remained the main driver of M3 growth, expanding by 24.1% in the year ending March 2026, broadly in line with the level recorded in the preceding month.
Mining and quarrying recorded the highest credit growth at 78.4%, reflecting ongoing government initiatives to improve financing access for artisanal and small-scale miners.
Other major contributors included trade at 43.3%, transport and communication at 39.5%, agriculture at 28.5%, and building and construction at 21.8%.
Credit to the manufacturing sector continued to contract, registering negative growth of 4.9% in March 2026, though at a slower pace than in recent months.
Personal loans maintained the largest share of outstanding private sector credit at 35.3%, followed by trade at 14.6% and agriculture at 13.4%.
Interest Rates
Banks’ interest rates remained largely unchanged in March 2026.
The overall lending rate held steady at 15.11%, while negotiated lending rates for prime customers remained around 12.21%.
On the deposit side, the overall time-deposit rate was broadly unchanged at 8.33%, while negotiated deposit rates increased to 11.57% from 11.48% in February 2026.
The short-term interest rate spread widened to 5.85 percentage points from 5.59 percentage points in the preceding month.
Financial Markets
Government Securities Market
The government securities market maintained robust performance in March 2026, with auctions consistently oversubscribed, reflecting sustained investor confidence in the stable macroeconomic outlook.
The BOT conducted two Treasury bill auctions with a combined tender size of TZS 452.1 billion, attracting subscriptions of TZS 812.9 billion, of which TZS 422.0 billion were accepted.
Treasury bill yields declined further, averaging 5.21% from 5.68% in the preceding month.
The BOT also offered 2- and 20-year Treasury bonds with a combined tender size of TZS 355.4 billion for government financing, attracting bids of TZS 1,803.9 billion, of which TZS 344.1 billion were accepted.
Weighted average yields for the 2- and 20-year bonds decreased to 8.36% and 10.71%, respectively.
Interbank Cash Market
The IBCM operated smoothly in March 2026, with total market turnover declining to TZS 2,699.5 billion from TZS 2,796.5 billion in the preceding month.
Seven-day transactions dominated activity at 60.7% of total volume, consistent with banks’ preference for short-term liquidity management.
The overall IBCM rate eased marginally to 6.32% from 6.34% in February 2026, remaining closely aligned with the CBR.
Interbank Foreign Exchange Market
Demand pressures in the Interbank Foreign Exchange Market (IFEM) eased in March 2026, supported by improved foreign currency liquidity from export inflows, particularly from gold.
Total market transactions amounted to USD 137.5 million, down from USD 184.9 million in the preceding month, with the BOT reducing its net sales to USD 65 million from USD 128.8 million.
The Tanzanian shilling traded at an average of TZS 2,583.23 per US dollar in March 2026, representing an annual appreciation of 2.52% compared to TZS 2,650.24 per US dollar in the corresponding month of 2025.
Government Budgetary Operations
Domestic revenue collections in February 2026 totalled TZS 2,972.9 billion, exceeding the monthly target by 3.2%.
Central government revenue amounted to TZS 2,841 billion, also surpassing its target by 3.2%, with the balance collected by local government authorities from own-source revenues.
Tax revenue reached TZS 2,417.4 billion, 5.7% above the monthly target, reflecting the continued positive impact of improved tax administration and compliance.
Non-tax revenue stood at TZS 423.6 billion, 9% below the target of TZS 465.7 billion.
Total government expenditure was TZS 3,550.1 billion, of which TZS 2,429.7 billion was recurrent expenditure and TZS 1,120.4 billion was directed toward development projects.
Debt Developments
National Debt
The national debt stock at the end of March 2026 stood at USD 50,457.5 million, a decrease of 1.2% from the preceding month, with external debt accounting for 70.4% of the total.
External Debt
The external debt stock declined by 0.8% to USD 35,540.2 million at the end of March 2026, with public debt representing 82.7% of the total.
External loans disbursed during the month amounted to USD 70.3 million, mainly to the central government, while external debt service payments totalled USD 103.7 million, of which USD 48.0 million was for principal repayments.
Multilateral institutions continued to account for the largest share of external debt at 57.8%, followed by commercial lenders at 35.8%.
The US dollar remained the dominant currency in the composition of external debt at 66.7%, followed by the Euro at 17.7%.
Domestic Debt
The stock of domestic debt stood at TZS 38,447.9 billion at the end of March 2026, slightly lower than the TZS 38,781.7 billion recorded at the end of February 2026.
The domestic debt portfolio remains concentrated in long-term instruments, particularly Treasury bonds, with commercial banks and pension funds holding more than half of the total.
The Government raised TZS 419 billion through government securities in March 2026, of which TZS 276.7 billion came from Treasury bonds and the balance from Treasury bills.
Domestic debt servicing amounted to TZS 518.2 billion, including TZS 219.9 billion in principal repayments and TZS 298.3 billion in interest payments.
External Sector Performance
Current Account
The current account deficit widened to USD 2,492.5 million in the year ending March 2026, from USD 2,009.9 million in the corresponding period of 2025, driven primarily by stronger import growth—particularly in industrial supplies and capital goods—which outpaced export expansion.
Exports
Exports of goods and services increased by 12.8% to USD 18,603.5 million in the year ending March 2026, supported by robust gold exports and travel receipts, which together accounted for 51.4% of total exports.
Exports of goods amounted to USD 11,076.9 million, up 15.5% year-on-year, with gold remaining the dominant contributor.
Gold exports surged by 38.5% to USD 5,222.8 million from USD 3,771.1 million, reflecting favourable global prices.
Manufactured goods exports rose by 32% to USD 1,802.7 million, driven by strong demand for iron and steel, and glassware from neighbouring countries.
Traditional exports grew by 8.2% to USD 1,608.8 million, supported by strong performance in tobacco and coffee on the back of favorable prices and higher volumes, which offset a 9.2% decline in cashewnut earnings due to lower prices.
Service receipts grew by 9% to USD 7,526.5 million, with travel receipts rising by 9.3% to USD 4,337.1 million, in line with increased international tourist arrivals, and transport receipts growing to USD 2,742.6 million from USD 2,404.3 million.
Imports
Imports increased by 13.6% to USD 19,361.9 million in the year ending March 2026, driven primarily by higher demand for industrial supplies, transport equipment, machinery, and mechanical equipment, as well as parts and accessories.
The surge in capital and intermediate goods imports signals a robust acceleration in domestic investment and industrial production, pointing to an expansion in productive capacity.
Imports of refined white petroleum products declined by 12.8% to USD 2,192.8 million, reflecting the earlier moderation in global oil prices prior to the recent volatility associated with the Strait of Hormuz crisis.
Service payments rose by 15.7% to USD 3,393.6 million, driven by higher freight costs in line with the increased goods import bill.
Foreign Exchange Reserves
Gross official reserves stood at USD 6,084.4 million at the end of March 2026, compared with USD 5,693.2 million at the end of March 2025, supported by strong export performance and the BOT’s gold purchase programme.
The reserve level is sufficient to cover 4.7 months of projected imports of goods and services, above the national benchmark of 4.0 months and the EAC convergence criterion of 4.5 months.
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