Country’s total debt hits Shs67tri

The stock of Tanzania’s total debt grew to $28.974.12 billion (Tsh66.798 trillion) at end April 2020, from $$7.382 billion (Tsh17.019 trillion) by end April 2019 due to increased borrowing by the government in the recent past.

According to the latest report of the Bank of Tanzania (BoT), external debt was $22.531 billion, which translates into Tsh51.945 trillion), while domestic debt was $6.443 billion, which is about Tsh14.853 trillion.

The public debt rose by Tsh122.5 billion ($53.135 million) from the end of March 2020, while the stock of external debt grew by $116.4 million (Tsh268.353 billion) from end of preceding month.

The central bank shows that the composition of external debt stock by borrower remained unchanged from the preceding month.

The government accounted for the largest share of around 78.2 per cent of the debt stock, the balance representing private sector debt.

Giving the government position on borrowing externally and domestically, Dr. Philip Mpango, Finance and Planning said government will continue borrowing cautiously with priority being given to those projects that are growth drivers and are identified in the National Development Plan strategic direction as flagship projects.

The government’s external debt in terms of creditor category was dominated by multilateral institutions, which usually offer concessional loans, at 46.6 per cent of the debt stock, followed by debt from commercial sources.

The public debt contracted through issuance of securities continued to account for the largest share of domestic debt, with Treasury bonds represented about 80.3 per cent of the debt. The debt structure was in line with the Medium-Term Debt Management Strategy, as long-term instruments, hence Treasury bonds and stocks accounted for the largest share of the debt stock.

“Commercial banks sustained dominance in the debt stock, accounting for 38.0 per cent, followed by pension funds at 29.2 per cent,” reads the report.

In terms of use of funds, transport and telecommunication accounted for the large share of the disbursed outstanding debt, at 26.4 per cent, followed by social welfare and education, 17.3 per cent.
External loans worth $134.1 million were disbursed in April 2020, all of which in favour of the government.

For the year ending April 2020, disbursements amounted to $2.339 billion, of which $1.984 billion was for the government, the balance by private sector.

During the month, debt service amounted to $12.8 million in April 2020, of which $9.1 million was principal repayment.

For the year ending April 2020, debt service payments amounted to $1.958 billion, of which $1.657 billion was principal repayment.

BoT says during the period, government securities worth Tsh584.3 billion were issued for budget financing, of which Tsh310.2 billion comprised of treasury bonds and Tsh274.1 billion were treasury bills.

Domestic debt issued during the year ending April 2020 amounted to Tsh5.615 trillion, of which Tsh2.920 trillion were treasury bonds and Tsh2.695 trillion were treasury bills.

During the month, domestic debt service, excluding government overdraft from the central bank, amounted to Tsh586.0 billion, of which Tsh461.7 billion was principal repayment that was rolled over and Tsh124.3 billion was interest payment.

Cumulative debt service for the year ending April 2020 amounted to Tsh5.334 trillion, out of which Tsh3.926 trillion was principal repayment and Tsh1.408 trillion was interest payment.