Tanzania’s national debt has surged to $34.3 billion as of December 2023, marking a significant increase of 17 percent, according to the latest report by the Parliamentary Budget Committee. This spike reflects a substantial rise from $31 billion recorded in June 2023 and $29.31 billion in December 2022.
The committee highlighted that the nation’s debt now constitutes approximately 35 percent of Tanzania’s annual GDP. Chairman Daniel Sillo attributed this escalation primarily to increased funding directed towards strategic projects encompassing infrastructure such as roads, railways, airports, and utilities like water and power supply. Significant allocations were also made towards social services, particularly in education, healthcare, and agricultural extension initiatives.
The breakdown of the debt reveals an external debt of $22 billion and a domestic debt of $12 billion. Moreover, the report underscores that 28 percent of the external debt carries a flexible interest rate based on market conditions, while 71.7 percent features a fixed interest rate.
To address the burgeoning debt, Dodoma has allocated $4.11 billion from its annual budget for the 2023/2024 fiscal year, constituting 23.6 percent dedicated to servicing the national debt. This allocation represents a notable 16.4 percent increase from the previous fiscal year’s allocation of $3.5 billion.
In light of these developments, the committee has urged the government to enhance revenue collection efforts and engage in negotiations with commercial lenders and other institutions to potentially lower interest rates. Additionally, emphasis has been placed on the importance of timely loan repayments and payments to contractors to mitigate the accrual of higher interest due to delays.
This latest revelation underscores the complexities surrounding Tanzania’s fiscal landscape, necessitating prudent financial management strategies to navigate the challenges posed by the escalating national debt while ensuring sustained economic growth and development.