Tanzania’s public debt remains sustainable and within internationally accepted risk thresholds despite increasing to TZS 114.34 trillion as of March 2026, Finance Minister Ambassador Khamis Mussa Omar told Parliament on Wednesday while presenting the government’s revenue and expenditure estimates for the 2026/27 financial year.
The minister said the debt portfolio comprises domestic debt amounting to TZS 38.45 trillion, representing 33.6 percent of the total debt stock, and external debt of TZS 75.89 trillion, equivalent to 66.4 percent.
He explained that the borrowed funds have largely been channelled into strategic development projects aimed at accelerating economic growth, including investments in transport infrastructure, energy and communications.
According to the latest Debt Sustainability Analysis conducted in November 2025, Tanzania continues to demonstrate a strong capacity to service its debt obligations without jeopardising macroeconomic stability.
Mr Omar noted that the present value of public debt stands at 39.6 percent of Gross Domestic Product (GDP), significantly below the 55 percent sustainability threshold.
Similarly, external debt accounts for 24.4 percent of GDP, remaining comfortably below the 40 percent benchmark.
He further said that the ratio of external debt to exports of goods and services reached 123.1 percent, well below the 180 percent threshold.
“These indicators clearly show that Tanzania has the capacity to meet its debt obligations without undermining the foundations of the national economy,” the minister said.
The government’s debt position has also received positive recognition from international credit rating agencies.
Mr Omar told lawmakers that Moody’s and Fitch Ratings had completed preliminary assessments and concluded that Tanzania remains a creditworthy borrower with a strong repayment capacity.
The agencies cited the country’s economic resilience, growing government revenues and ongoing reforms to improve the business environment as key factors supporting Tanzania’s credit profile.
In another development, Tanzania emerged as the overall winner of the Commonwealth Public Debt Management Award, recognising improvements in debt management systems and prudent utilisation of development financing.
Mr Omar attributed the achievement to the implementation of policies under President Samia Suluhu Hassan’s administration, particularly efforts to ensure that borrowed funds are directed towards productive projects that deliver tangible benefits to citizens.
Looking ahead, the government pledged to maintain debt sustainability through enhanced domestic revenue mobilisation, increased production and prioritisation of concessional borrowing.
At the same time, the minister acknowledged that Tanzania’s economy has increasingly felt the effects of global economic shocks, including the Russia-Ukraine conflict, trade tensions between the United States and China, and the recent geopolitical tensions involving the United States, Israel and Iran that began in February 2026.
He said the global uncertainties had contributed to rising fuel and agricultural input prices, increasing the cost of living for many households.
Between March and May 2026, petrol and diesel prices in Dar es Salaam rose by 44 percent and 49 percent respectively. Fertiliser prices also increased by between 4 percent and 46 percent depending on the product category.
The minister noted that Tanzania imports more than 80 percent of its fertiliser requirements, with about 70 percent sourced from the Middle East, making the country vulnerable to disruptions in international supply chains.
To cushion consumers and businesses from rising fuel costs, the government has taken several emergency measures to guarantee adequate fuel supplies, including timely procurement and maintaining sufficient stocks.
Mr Omar said fuel subsidies had also been maintained, with diesel subsidies of TZS 259 per litre in May and TZS 535 per litre in June 2026 helping to ease pressure on consumers.
The government also plans to accelerate the construction of the Strategic Petroleum Reserve (SPR) to strengthen energy security and ensure adequate reserves during periods of global market volatility.
In the longer term, authorities intend to reduce dependence on imported petroleum products by expanding investments in natural gas and renewable energy.
In the agricultural sector, the government is promoting alternative fertiliser solutions and increasing support to farmers to mitigate the impact of rising input costs.
The minister also highlighted the growing threat of climate change, saying the government would continue implementing emergency response programmes and investing in clean energy initiatives.
He revealed that Tanzania had secured $320 million from the World Bank to rehabilitate infrastructure damaged by climate-related disasters.
On social welfare, Mr Omar said the government remained committed to gender-responsive budgeting to ensure equitable development benefits across all segments of society.
By April 2026, more than TZS 135.8 billion had been disbursed through local government authorities as loans to youth, women and persons with disabilities.
Mr Omar said Tanzania would continue managing its economy prudently to preserve debt sustainability, contain inflationary pressures and improve citizens’ livelihoods despite the challenging global environment.
