Tanzania Sovereign Debt Market Overview – 2025 Edition

Tanzania Sovereign Debt Market Overview – 2025 Edition

Published by Impala Market

📌 Executive Snapshot

• Total Public Debt: TZS 89.4 trillion (~USD 35.2 billion)

• Debt-to-GDP Ratio: ~41%

• Debt Composition: ~71% domestic, ~29% external

• Outlook: The government continues to rely on local borrowing to finance infrastructure and social programs, while maintaining moderate external debt exposure. A stable macro environment supports investor confidence.

🔍 1. Debt Market Structure

1.1 Total Public Debt Profile

• Domestic Debt: TZS 63.4 trillion

• External Debt: TZS 26 trillion

• Debt Service-to-Revenue Ratio: ~30–35%

• Source: Ministry of Finance – Debt Statistics

1.2 Legal & Institutional Framework

• Debt managed by the Ministry of Finance and Planning (MoFP)

• Central Bank of Tanzania (BoT) conducts auctions and debt servicing

• Legal framework guided by the Loans, Grants and Guarantees Act, 1974 (as amended)

🏦 2. Domestic Debt Instruments

Instrument Currency Maturity Frequency Notes Treasury Bills TZS 35, 91, 182, 364 days Weekly Discount instruments Treasury Bonds TZS 2–20 years Monthly Fixed coupon, biannual interest

• Retail access through licensed brokers and banks

• Institutional demand dominated by pension funds and banks

🌍 3. External Sovereign Debt

• Multilateral: World Bank (IDA), IMF, AfDB

• Bilateral: China, Japan, France

• No active Eurobond issuance as of 2025

• Participation in concessional and semi-concessional programs continues

👥 4. Investor Base

Domestic:

• Pension funds (e.g., NSSF, PSSSF)

• Commercial banks

• Insurance companies

Foreign:

• Limited access to domestic debt market

• FX risk and capital controls deter foreign portfolio inflows

🔁 5. Secondary and OTC Market

• Treasury instruments traded primarily over-the-counter (OTC)

• No dedicated bond exchange

• Central Depository at BoT manages settlement and registration

• Market yields published via BoT and primary dealers

📊 6. Recent Trends

• Treasury bond yields range between 10% and 15%, depending on tenor

• Increased issuance of long-term bonds to manage refinancing risks

• Stable inflation and shilling performance support real returns

• New issuance calendar improving predictability for institutional investors

7. Risk Assessment

• Sustainability: Low to moderate risk of debt distress (IMF DSA 2024)

• FX Risk: Moderate – managed through prioritization of concessional financing

• Liquidity Risk: Concentrated investor base limits secondary market activity

✅ 8. Opportunities & Reforms

• Develop a sovereign bond index for transparency and benchmarking

• Broaden investor base through digital access and mobile savings bonds

• Introduce green bonds for infrastructure and climate-related investments

• Improve pricing transparency via dedicated market data platforms

📎 9. Annexes

• BoT Treasury Auction Calendar

• MoFP Debt Reports

• Credit Ratings:

  • Moody’s: Not Rated

  • S&P: Not Rated

  • Local agencies: TCRA assessments for internal risk grading

📬 For Investors & Researchers

Tanzania offers relatively stable macro conditions, moderate debt risk, and consistent access to domestic financing. Opportunities lie in expanding financial inclusion, modernizing infrastructure through sustainable financing, and gradually opening to foreign investors.

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