Tanzania’s national debt increased by over Tsh12 trillion ($4.71 billion), or 17 percent, to reach Tsh87.47 trillion ($34.3 billion) as at December 2023, according to a report by The East African.
Quoting the Parliamentary Budget Committee, in its Government Budget Implementation Report covering February 2023 to January 2024, the report said that government debt jumped sharply from Tsh80.33 trillion ($31 billion) in June 2023.
It noted that in December 2022, the country’s national debt was Tsh74.75 trillion ($29.31 billion).
Now, national debt constitutes about 35 percent of Tanzania’s annual GDP, the MPs said.
The committee chairman Daniel Sillo said in Dodoma this week that the increasing government debt was blamed on increased funding of its strategic projects such as roads, railways, airports, water, and power supply.
Other money was directed to social services, mostly education and health services, and agricultural extension projects.
External debt has increased due to changes in the exchange rates as well as interest on loans based on changes in market conditions, Mr Sillo said.
External debt is Tsh56.79 trillion ($22 billion) while domestic debt is Tsh30.67 trillion ($12 billion), the committee report said.
The MPs’ report said that 28 percent of the external debt has a flexible interest rate based on the market while 71.7 percent has a fixed interest rate.
Dodoma had allocated Tsh10.48 trillion ($4.11 billion) from its current Tsh44.38 trillion ($17.4 billion) annual budget for the 2023/2024 financial year, or 23.6 percent, to service the national debt.
The amount is a 16.4 percent increase from Tsh9 trillion ($3.5 billion) allocated to service its debt in the 2022/2023 annual budget.
The committee advised the government to increase revenue collections and negotiate with commercial lenders and other institutions with high-interest rates to reduce them.
The MPs also recommended timely repayment of loans and contractors to avoid higher interest from accumulated payments.