External debt continues to spiral upwards

20Feb 2019

The Guardian Reporter


The country’s external debt stock rose by $119.3 million between November and December last year, Bank of Tanzania (BoT) has reported.

Graphic presentation of the country’s debt to gross
domestic product by 2018.

In its Monthly Economic Review for January, BoT said the external debt which comprises of both public and private sectors, peaked to $21,045.8 million as of December 2018.

The amount is also higher by $1,865.6 million year on year compared to that of December 2017. “The increase in both periods was on account of new disbursements and appreciation of the US dollar against other currencies in which the debt is denominated,” the Central Bank said in the MER.

Breaking down the debt, BoT stated that central government debt which accounted for 75.9 per cent of the total external debt stock, increased by $189.1 million during the period.

In terms of creditor category, much of the external debt is owed to multilateral institutions and commercial banks. The Central Bank further stated that regarding use of disbursed funds, much of it was invested in transport and telecommunication, energy and social welfare plus education sectors.

External debt disbursed in December 2018 amounted to $183.2 million, all of which was received by the central government.

For the year ending December 2018, external debt disbursed amounted to $1,753.9 million, of which the public got $1,528.8 million while the balance went to the private sector.

The MER indicated the government used $150.3 million to service its debt in December 2018 of which $108.3 million was principal repayment and the balance was interest charge.

According to BoT, external debt service in the year ending December 2018 amounted to $1,071.3 million, of which the principal repayment was $769.6 million with the balance being interest payments.

On the other hand, the domestic debt stock for the period was 14,631.4bn/-which depicted an increase of 204.6bn/- and 1,220.2bn/- from the levels recorded at the end of the preceding month and the corresponding period in 2017, respectively.