Dodoma — The government will spend a total of Sh10 trillion on debt servicing during the financial year 2018/19, the Finance and Planning Minister has said.
Requesting the Parliament to endorse a total of Sh12 trillion for all the departments, agencies and institutions under his ministry's budget for the financial year 2018/19, Dr Phillip Mpango told the House on Monday, June 4, 2018 that out of the Sh10 trillion will be spent on debt servicing.
However, Dr Mpango told the House that the debt, measured by several sustainability indicators, was still 'very sustainable' and that Tanzania still has a wide room for further borrowing.
He said a debt sustainability analysis, which was conducted in November last year (2017), showed that the debt was sustainable for both the the medium and long term periods.
"The ratio of government debt to Tanzania's gross domestic product (GDP) stood at 34.4 per cent as of June 2017 against a threshold of 56 per cent," he said.
As for the foreign debt, said Dr Mpango, its ratio stands at 19.7 per cent of the GDP against a threshold of 40 per cent.