Tanzania's National Debt Remains Sustainable, Says Finance Minister

Strategic Insights -

Tanzania's national debt remains in sustainable levels despite its rising trend, the government has said. The finance minister, Dr Mwigulu Nchemba, attributed the increase to ambitious infrastructure projects aimed at unlocking the country's economic potential. The debt has reached 107.7 trillion Tanzanian shillings (TZS) as of April 2025, driven by increased borrowing to finance energy and transport infrastructure.

The Debt Sustainability Analysis (DSA) conducted in October 2024 concluded that the nation's debt remained manageable, with key debt indicators well within their respective thresholds. For instance, the present value of public debt to GDP was 40.3 percent, well below the 55 percent threshold. The present value of external debt to GDP stood at 23.6 percent, compared to a 40 percent threshold.

The government is heavily investing in energy and transport infrastructure, aiming to expand electricity access and improve transportation networks. Major projects include the Julius Nyerere Hydropower Project, the Standard Gauge Railway (SGR), and the Kigongo–Busisi Bridge, spanning Lake Victoria.

Key Takeaways:

  • Tanzania's national debt reached 107.7 trillion Tanzanian shillings (TZS) as of April 2025.
  • The debt increase is attributed to ambitious infrastructure projects, including energy and transport infrastructure.
  • The Debt Sustainability Analysis (DSA) conducted in October 2024 concluded that the nation's debt remained manageable.
  • Key debt indicators, such as the present value of public debt to GDP (40.3%) and external debt to GDP (23.6%), are well within their respective thresholds.
  • The government is investing heavily in energy and transport infrastructure, with major projects including the Julius Nyerere Hydropower Project, the Standard Gauge Railway (SGR), and the Kigongo–Busisi Bridge.
  • Investigations by Moodys Investors Service and Fitch Ratings affirm Tanzania's creditworthiness, with ratings of B1 and B+ respectively.

Statistics:

  • Tanzania's national debt: 107.7 trillion TZS (as of April 2025).
  • Public debt to GDP: 40.3% (vs. 55% threshold).
  • External debt to GDP: 23.6% (vs. 40% threshold).
  • Present value of external debt to exports: 123.8% (vs. 180% limit).
  • Government debt: 104.931 trillion TZS (as of March 2025), a 14.4% increase from 91.7 trillion TZS in March 2024.

Sources:

  • Minister for Finance Dr Mwigulu Nchemba
  • Professor Kitila Mkumbo, Minister of State in the Presidents Office (Planning and Investment)
  • Moodys Investors Service (March 2025)
  • Fitch Ratings (December 2024)