Tanzania’s external borrowing has zoomed to $19.5 billion (Tsh- 45trn) in 2019 from $7.7 billion (Tsh 17.8trn) borrowed in 2009. This mark an addition of $11.8 billion (Tsh 27.2trn) over the past decade.
The International Debt Statistics 2021 report by the World Bank shows that during the period, the use of IMF credit declined to $301 million (Tsh694.9bn) in 2019 from $628m (Tsh 1.5trn) in 2009.
According to the report, long-term external debt rose to $17,484 million (Tsh 40.4trn) in 2019 from $5,656 million (Tsh 13.1trn) recorded in 2009. “The overhang of debt may slow investment and growth for years to come, a burden on the poor that now needs to be addressed by creditors across the world taking prompt steps to permanently cut unsustainable debt stocks for the poorest countries,” said David Malpass, the World Bank Group President.
The report indicates that $ 14,115 million (Tsh 32.6trn) went into public guaranteed sector compared to $4,640 million (Tsh 10.7trn) in 2009. Of which, general government was $ 14,017 million (Tsh 32.4trn) in 2019 compared to $4,571 million (Tsh 10.6trn) in 2009.
The money that did not guarantee to the private sector increased to $ 3,369 million (Tsh7.8trn) in 2019 from $1,016 million (Tsh2.4trn) in 2009.
The report indicates that during the period, short-term external debt reached $1,814 mil- lion (Tsh4.2 trn) $1,402 million (Tsh3.2trn) in 2009 to in 2019.
On repayments, the report shows that in 2019, Tanzania spent $1.1 billion and $200 million respectively.
The report says that with almost half of all low-income nations either already in debt dis- tress or at a high risk of it, the the burden of debt is bound to worsen with countries borrowing more to tackle the COVID-19 pandemic. Total external debt stocks of low-income countries eligible for debt service suspension rose by 9 per cent to $744 billion in 2019, equivalent to one-third of their combined gross national income. According to him, to build durable economic recoveries, countries will need to achieve long-term debt sustainability.
The report shows that the external debt stock of 120 low and middle income countries rose by 5.4 per cent to $8.1 in 2019 trillion, a rate of accumulation almost identical to that in 2018, but close to half the 10.5 per cent rise in external debt stock recorded in 2017.
The increase in external debt stocks in 2019 was the outcome of net debt inflows of $383 billion.
Countries in sub-Saharan Africa accounted for the largest share of net long-term inflows at 24 per cent, followed by the East Asia and Pacific region.