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According to data from the Bank of Tanzania (BoT), as of December 2023, Tanzania’s national debt was USD 41.7 billion (Sh120 trillion), while government debt was Sh87.47 trillion. However, the country’s Finance Minister, Dr Mwigulu Nchemba, emphasized that borrowing indicates the lender’s confidence in being repaid
According to data from the Bank of Tanzania (BoT), as of December 2023, Tanzania’s national debt was USD 41.7 billion (Sh120 trillion), while government debt was Sh87.47 trillion. However, the country’s Finance Minister, Dr Mwigulu Nchemba, emphasized that borrowing indicates the lender’s confidence in being repaid.
The Minister stated that the country borrows funds for the implementation of various strategic projects because it can repay. The loanee is also confident of the debtor’s capacity to repay. Otherwise, no one would lend if there is a lurking fear of money getting repaid.
Dwelling further on the debt of the country, the minister said that even the richest countries in the world have the biggest debts. The most developed countries have bigger debts than Tanzania. Tanzania has signed a Sh231.3 billion financing agreement with the African Development Bank (AfDB) to start the construction of SGR that seeks to connect Tanzania with Burundi and the DR Congo. Tanzania has allocated Sh10.48 trillion to service the national debt in the financial year 2023/24.
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The borrowed funds, the minister said, are utilized for significant projects that require substantial financing upfront. Dr. Mwigulu clarified that borrowing was a strategic decision to address large-scale projects efficiently while emphasizing that the borrowed funds are invested in projects like building railways, which generate revenue to repay the debt over time. Referring to the sustainability of the public debt, the finance minister underscored that a recent report indicated the sustainability of the national debt for the next 20 years. Stating this, he alluded that Tanzania was not borrowing beyond its means and importantly beyond its repaying capacity.
