MWE Correspondent
Tanzania’s total public debt has climbed to a record Sh104.9 trillion in 2025, more than doubling from Sh50.77 trillion in March 2019, as the country continues borrowing to fund large-scale development projects.
Compared to Sh91.71 trillion recorded during the same period in 2024, this is a 14.4% increase, highlighting the rapid pace of fiscal expansion.
The figures were disclosed in the 2024 National Economic Status Report presented to Parliament by Prof. Kitila Mkumbo, Minister of State in the President’s Office for Planning and Investment. The report shows that Sh34.26 trillion of the debt is domestic, while the remaining Sh70.68 trillion is classified as external debt, owed to international lenders including multilateral institutions and bilateral partners.
Much of this debt is linked to the government’s ambitious drive to fund projects in critical sectors such as infrastructure, transportation, energy, water supply, and agriculture. Flagship investments include the Standard Gauge Railway (SGR), Julius Nyerere Hydropower Station, and the Kigongo–Busisi Bridge, now the longest bridge in East Africa.
Finance Minister Dr. Mwigulu Nchemba has repeatedly defended the government’s borrowing strategy, emphasizing that the funds are being “wisely used” to stimulate long-term development and lift the country towards upper-middle-income status. He told Parliament that most loans are directed at boosting local production, improving logistics, and generating employment opportunities.
However, experts have warned that rising debt could come at a cost. Much of Tanzania’s external debt is denominated in US dollars, making repayments vulnerable to exchange rate fluctuations. In April 2025, the Tanzanian shilling depreciated by 3.9%, further inflating the cost of debt servicing.
Despite these risks, international lenders such as the International Monetary Fund (IMF) and the World Bank consider Tanzania’s debt level to be moderate and sustainable. A Debt Sustainability Analysis (DSA) conducted by the IMF in late 2024 confirmed that the country remains below critical thresholds: public debt is under 55% of GDP, and external debt is below 40%, in line with global benchmarks for low-income developing countries (LIDCs).
Also Read; Congo Challenges China’s Hold on Cobalt Trade
As of February 2025, official figures from the Bank of Tanzania showed that public debt stood at USD 39.65 billion, with about USD 35.51 billion being external, representing roughly 89.6% of total foreign liabilities. The central government holds 76.7% of this, while the remainder is tied to the private sector.
In response to growing concerns, authorities are implementing a multi-pronged strategy to reduce vulnerabilities. This includes:
- Increasing domestic revenue collection through reforms at the Tanzania Revenue Authority (TRA)
- Seeking more concessional loans instead of expensive commercial debt
- Promoting export diversification
- Strengthening debt management practices at the Ministry of Finance
Even as debt levels rise, the government remains focused on creating long-term economic value. Projects like the SGR are expected to boost cross-border trade with neighbors such as Rwanda and Burundi, while new hydropower and road networks aim to bring electricity and transport access to millions more Tanzanians.
As debate over the country’s borrowing continues, one thing is clear: Tanzania is betting on infrastructure-led growth to secure its future. Whether this bet pays off without putting undue pressure on the country’s finances will depend on careful planning, transparency, and resilience amid global economic challenges.
