Africa
Moderate RiskLatest data: 2025 | Updated 8/24/2026
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By Creditor
By Instrument
By Holder
49.6%
Target: Below 55% for frontier markets
17.7%
Target: Below 18% for fiscal comfort
5.8%
Target: 6-7% annual growth needed for meaningful poverty reduction and job creation in Africa
$90.1B
Inflation: 3.3%
Tanzania relies heavily on expensive market borrowing (42% commercial debt) — paying much higher interest than necessary. Pension funds hold 26% of domestic debt — ordinary workers' retirement is tied to government creditworthiness. Most debt (73%) is owed to foreigners, requiring foreign currency to repay — creating exchange rate vulnerability.
Retirees Heavily Exposed to Government Risk
Who Holds ItPension funds hold 26% of Tanzania's domestic debt. Workers' retirement savings are significantly tied to government creditworthiness. If the government ever restructures this debt (like Ghana did in 2023), retirees could see their pensions reduced — a politically explosive scenario.
External Debt Dominance
Debt Mix73% of Tanzania's total debt is owed to foreigners (external debt). This debt must be repaid in foreign currency (dollars, euros) that the government cannot print. If exports fall or the currency weakens, servicing this debt becomes much harder.
Significant Commercial Debt
Debt MixTanzania has 42% of external debt from commercial sources. This is moderately high — the country is paying significantly more interest than if it relied more on multilateral lenders.
Stable Long-term Debt Profile
Risk FactorTanzania has 79% of domestic debt in long-term Treasury Bonds. This provides stable, predictable financing with lower refinancing risk — a healthy debt structure.
Click to expand each guide for detailed explanations of causes, consequences, and recommended solutions.
Overall Assessment: Stable
Debt metrics are within sustainable ranges.
For Policy Makers: These six indicators together tell the story of whether a country can manage its debts. Green means healthy, yellow means watch closely, orange means take action, and red means crisis.
These insights are automatically generated based on the current data. Each insight includes context on why it matters and what can be done.
High Commercial Exposure
Tanzania's commercial debt accounts for 42.3% of external obligations, exposing the country to significant refinancing risk and market sentiment shifts during global tightening cycles.
Fiscal Deficit Widening
Tanzania's primary balance of -2.4% of GDP indicates a widening fiscal deficit that, if sustained, will place upward pressure on borrowing needs and debt ratios.
A guide for policy makers
What "Debt Sustainability" Means
A country's debt is sustainable when the government can pay interest and eventually repay principal without cutting essential services, printing money, or seeking emergency bailouts. Think of it like a household: if your mortgage payment takes 60% of your salary, you can't afford food and school fees. The same applies to countries.
Tanzania's Assessment
The country has room to borrow for productive investments while maintaining fiscal health.
Strengths
What Tanzania needs for sustainable development
Current Growth
5.8%
HealthyPer-Capita Growth
3.3%
Citizens getting richerTarget for Debt Stability
5%+
On trackThe Magic Number: 6-7% Growth
African countries need sustained growth of 6-7% per year to create enough jobs for young people entering the workforce (Africa's working-age population grows by 3% annually) and to reduce poverty meaningfully. At 3% growth, per-capita income is stagnant. At 7% growth, the economy doubles every 10 years.
Priority Actions
Electricity is Non-Negotiable
Every 1% increase in electricity access correlates with 0.5-1% GDP growth. Prioritize power generation and grid reliability.
Move Up the Value Chain
Exporting raw commodities leaves 80% of value overseas. Invest in processing and light manufacturing to capture more value domestically.
Invest in Human Capital
Each additional year of schooling increases individual earnings by 8-13%. Technical and vocational education has highest returns in Africa.
Agricultural Modernization
60% of Africans work in agriculture but it contributes only 15% of GDP. Extension services, irrigation, and market access can double productivity.
No historical data available
Tanzania has historically been one of East Africa's more conservative borrowers, with debt levels well below regional peers. Under President Samia, the country has pursued a careful opening while maintaining fiscal discipline.
Tanzania avoided the infrastructure borrowing spree that affected Kenya and Ethiopia. Debt-to-GDP remains around 40% — comfortable by regional standards. The government has focused on concessional borrowing and domestic debt markets.
Tanzania is the boring-in-a-good-way story. No crisis, no drama, steady progress. For investors seeking stability over upside, Tanzania offers a safer entry point to East Africa. Restructuring probability: <3%.