Tanzania: Domesticdebtupby1.0tri/ - Inonemonth

Bank of Tanzania (BoT) has said the government domestic debt stock recorded an increase of 1.014tri/- in one month, pushed up by utilization of overdraft.

The amount increase in one month has pushed the total domestic stock to 18.648tri/- at the end of last November. also, the domestic debt in a yearly basis went up by 2.766tri/- by last November.

BoT's latest Monthly Economic Review issued last week showed that the domestic debt is dominated by treasury bonds that control 83.8 per cent of total stock.

"The monthly increase is mostly attributed to the utilization of overdraft facility by the government," MER report said adding: "Commercial banks and pension funds remained the largest creditors, altogether accounting for over 60 percent of domestic debt by purchasing government securities."

The report also showed that the issuance of government securities for budgetary operations amounted to 415.0bn/-, of which treasury bonds was 311.1bn/- and the balance was dominated by treasury bills.

The domestic debt service, excluding overdraft from the central bank, amounted to 426.5bn/- where a 245.4bn/-was principal and the balance was interest payments.

BoT's data showed that the domestic debt stock surged from 4,589tri/- in November 2011 to 18.648tri/- last November.

On the other hand, the stock of external debt at the end of last November--comprising public and private sector--decreased by 215.8 million US dollars compared to last October to close the month at 27.955 billion US dollars.

"The decrease is attributed by external debt service outweighing disbursements during the month," the report said.

However, the level of external debt recorded an annual increase of 4.123 billion US dollars when compared with the corresponding month in 2020.

The yearly debt service payments amounted to 171.4 million US dollars of which 114.2 million US dollars was principal repayments and the balance was interest payments.

"Central government continued to dominate the profile of external debt by borrower category, accounting for 73.4 per cent," BoT said.

The multilateral institutions continued to account for the largest share of external debt, followed by commercial creditors.

In terms of use of funds,

almost a quarter of external borrowing financed transport and telecommunication-related activities, followed by social welfare and education, and energy and mining.

"The profile of external debt by currency composition exhibits dominance of debt contracted in US dollar followed by [IMF's] Special Drawing Rights," BoT report said.

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