National debt stock in modest decline

TANZANIA: TANZANIANS may breathe a sigh of relief as the national debt stock declined by 898.40 million US dollars (2.278tri/-) in the first half of the current financial year.

The Bank of Tanzania said in its latest Monetary Policy Statement, Mid-Year Review 2023/24 that the national debt stock declined from 42,681 million US dollars (about 108.946tri/-) at the end of June 2023 to 41,782.6 million US dollars (about 106.711tri/-) at the end of December last year.

However, when compared to a corresponding period in 2022, the national debt stock increased from 40,080.4 million US dollars (about 102.244tri/-) in December 2022 to 41,782.6 million US dollars (about 106.711tri/-) at the end of December last year.

The national debt stock comprises of public (domestic and external) and private sector external debt.

The government allocated 10.48tri/- from the 44.38tri/- budget for the 2023/24 financial year or 23.6 per cent of the total budget to service the national debt. The amount is a 15 per cent rise from the 9.1tri/- trillion approved for debt servicing in 2022/23 year.

According to the statement, central government debt declined by 430.7 million US dollars (about 1tri/-) in the first half of the current financial year The central government debt declined from 35.22 billion US dollars (about 89.377tri/-) at the end of June 2023 to 34.79 billion US dollars (88.71tri/-) at the end of December last year.

However, when compared to a similar month last year, the central government increased by 2.41 billion US dollars, the statement said.

According to the statement, external debt account for 64.8 per cent of the total government debt and much of the public external debt was owed to multilateral institutions and commercial creditors.

The funds borrowed by the central government and the private sector were mainly used for transport and telecommunication, social welfare and education, and energy and mining.

Domestic debt was 30.676tri/-, an increase of 1.749tri/- from the end of June 2023, with stocks and Treasury bonds dominating the debt portfolio. External debt stock (public and private) declined to 29.54 billion US dollars at the end of December 2023 down from 30.25 billion US dollars at the end of June 2023, the statement shows.

However, when compared to a corresponding period in 2022, the external debt stock had increased by 535 million US dollars from 29 billion US dollars in December in 2022.

The statement further shows external debt owed by the central government was 22.55 billion US dollars, which accounts for 76.3 per cent of the external debt stock.

The composition of the external debt stock by creditor category showed debt owed to multilateral institutions remained dominant, at 15,255.9 million US dollars at the end of December 2023 equivalent to 51.6 per cent. It is followed by commercial creditors at 8,697.4 at the end of December 2023 equivalent to 29.4 per cent.