26 November 2012

Tanzania: Multilateral, Commercial Debt Stocks Surge in Dar es Salaam

The new disbursements and accumulation of interest arrears have been attributed to the increase in multilateral and commercial debt stocks in Tanzania for the year ending August 2012.

The Bank of Tanzania (BoT)'s profile of external debt by creditor category indicates that the stock of multilateral and commercial debts increased by 0.9% each. Conversely, BOT said bilateral debt decreased by 0.1% while export credit remained unchanged.

According to a recent monthly economic review, the central government continued to account for the largest share of external debt stock at 76.2% followed by the private sector and public corporations at 18.4% and 5.4% respectively.

As at the end of August this year, external debt stock stood at $10.42bn, compared with $10.35bn recorded at the end of July 2012. "Out of the external debt stock, 85.6% was disbursed outstanding debt (DOD) and the remaining was interest arrears," the BoT report said.

The profile of external debt by currency composition indicates that the debt stock was mainly denominated in Special Drawing Rights (SDR), US Dollar (USD) and African Unit of Account (AUA). "However, after decomposition of SDR and AUA into a basket of currencies, the USD became the predominant currency accounting for 51.7% of the external debt, followed by Euro at 25.8%, says the report.

In August this year, new disbursements amounting to $29.5m were recorded; while external debt service amounted to $8.7m, out of which $2m was principal payments, $4m was interest payments and $2.7m were other charges.

The stock of domestic debt at the end of August this year increased to $2.8bn (Tsh4.57trn) from $2.7bn (Tsh4.50trn) registered at the end of July. The increase was a result of issuance of new Treasury bonds compared to maturing obligations.

On annual basis, domestic debt stock increased by $438.9m (Tsh711bn) equivalent to 15.5% as at the end of August 2012 from $ 2.4bn (Tsh3.86trn) recorded in the corresponding period in 2011.

The increase was mainly on account of issuance of new Treasury bonds that outweighed maturing obligations.

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