Tanzania defends 107.7tri/- debt as a global economic challenge

DAR ES SALAAM: TANZANIA’s national debt has increased to 107.70tri/- as of May 2025, with  72.94tri/- being external debt and  34.76tri/- domestic debt.

 However, the Government has clarified that a significant portion of this increase does not stem from new borrowing by the Sixth Phase Government, but rather from various other contributing factors.

According to an official statement, 11.3tri/- of the current debt stems from loans that were signed by previous administrations. Additionally, the Government has formally recognized debts owed to social security funds through non-cash special bonds amounting to 2.67tri/-.

Of this amount, 2.18tri/- is owed to PSSSF for civil servants who worked before 1999, TZS 433.7 billion is long-term debt owed to NSSF, and 63.52bn/- is debt owed to a pension fund joint venture company Pension Property Limited (PPP).

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PPP funded government projects including the construction of the Parliament Hall in Dodoma and the Nelson Mandela African Institute of Science and Technology in Arusha. These debts had not previously been included in the official national debt figures.

Moreover, the increase in national debt has also been influenced by the depreciation of the Tanzanian shilling against the US dollar. In March 2021, one US dollar was exchanged at 2,298.5/-, but by March 2025, the rate had climbed to 2,650/-. As a result of this currency shift, the value of the Government’s debt when expressed in Tanzanian shillings appears to rise by over 9.3trillion, even without any new borrowing.

The Tanzanian government has also borrowed funds to finance development projects and to repay maturing domestic debt owed to government securities investors.

The government emphasized that these changes should not be viewed as signs of economic weakness but rather as necessary steps to address both national and global economic challenges.