Tanzanians received encouraging news as the national debt stock saw a notable decrease by 898.40 million US dollars (equivalent to 2.278 trillion TZS) during the initial half of the current financial year, according to the latest Monetary Policy Statement, Mid-Year Review 2023/24 released by the Bank of Tanzania.
The report highlights that the national debt stock reduced from 42,681 million US dollars (approximately 108.946 trillion TZS) as of June 2023 to 41,782.6 million US dollars (about 106.711 trillion TZS) by the end of December of the same year. However, in comparison to the corresponding period in 2022, the national debt stock exhibited an increase from 40,080.4 million US dollars (around 102.244 trillion TZS) in December 2022 to 41,782.6 million US dollars (approximately 106.711 trillion TZS) by the end of December 2023.
The national debt stock encompasses both public (domestic and external) and private sector external debt.
For the fiscal year 2023/24, the government allocated 10.48 trillion TZS from the 44.38 trillion TZS budget, constituting 23.6 percent of the total budget, to service the national debt. This amount reflects a 15 percent increase from the 9.1 trillion TZS approved for debt servicing in the previous fiscal year 2022/23.
According to the statement, central government debt witnessed a decline of 430.7 million US dollars (approximately 1 trillion TZS) in the first half of the current financial year. Specifically, central government debt decreased from 35.22 billion US dollars (about 89.377 trillion TZS) in June 2023 to 34.79 billion US dollars (88.71 trillion TZS) by the end of December 2023. However, in comparison to the same period in the previous year, the central government debt increased by 2.41 billion US dollars.
The report also indicates that external debt accounts for 64.8 percent of the total government debt, with a significant portion owed to multilateral institutions and commercial creditors.
Funds borrowed by both the central government and the private sector were primarily allocated to sectors such as transportation, telecommunications, social welfare, education, energy, and mining.
The domestic debt stood at 30.676 trillion TZS, reflecting an increase of 1.749 trillion TZS from the end of June 2023, with stocks and Treasury bonds dominating the debt portfolio.
Furthermore, the external debt stock (public and private) decreased to 29.54 billion US dollars by the end of December 2023, down from 30.25 billion US dollars at the end of June 2023. However, compared to the corresponding period in 2022, the external debt stock experienced an increase by 535 million US dollars from 29 billion US dollars in December 2022.
The statement reveals that external debt owed by the central government amounted to 22.55 billion US dollars, constituting 76.3 percent of the external debt stock. Debt owed to multilateral institutions remained dominant, accounting for 51.6 percent, followed by commercial creditors at 29.4 percent by the end of December 2023.