Going by the Bank of Tanzania’s Monthly Economic Review (MER), the national debt increased by Sh6.9 trillion in the 12 months ending January 2023.
Under the period under review, according to the central bank, the national debt jumped from $37.6 billion (Sh86.5 trillion) in January 2022 to $40.6 billion (Sh93.4 trillion) in January 2023.
“The debt has reached the current level mainly on account of the utilisation of the overdraft facility,” reads part of the MER report.
However, the Head of Government Communication Unit and Spokesman, Ministry of Finance and Planning, Mr Benny Mwaipaja, said Tanzanians have nothing to worry about.
This is because, he said, the borrowed money is being injected into development projects that will ultimately yield lucrative returns for Tanzania in the near future.
It is obvious that the debt will continue to increase as Tanzania continues to undertake several major infrastructure projects, which are key to attracting investors upon their completion.
The projects include the Standard Gauge Railways, the Julius Nyerere Hydro-Power Dam, the expansion of the Dar es Salaam port, and the construction of the Bus Rapid Transit infrastructure in Dar es Salaam, to mention just a few.
“Tanzanians shouldn’t be concerned because the national debt is still manageable in the short, medium, and long terms. We will continue to borrow, but responsibly,” Mr Mwaipaja told The Citizen by phone yesterday.
He went on to add, “We will make sure that whatever we borrow, is used for the intended purposes.”
Echoing the government’s stance, an Economist from Mzumbe University, Prof Aurelia Kamuzora, said the current debt level should not worry Tanzanians, despite its increasing trend.
She explains that borrowing is okay as long the borrowed money is used to generate active capital.
“The debt being huge is not a problem; the problem is how we are using the borrowed money,” she asserted.
She added: “We need good evaluators who will advise the government on how to invest the borrowed money and how to get a return.”
Tanzania has access to financing, according to Prof. Kamuzora, because of the respect it has earned from development partners and multilateral institutions.
