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Tanzania’s external debt has more than doubled to 9.78bn US dollars
(about 15.6tr/-) when compared to the 4.45bn US dollars (about 7.12tr/-)
recorded soon after implementation of Multilateral Debt Relief Initiative
(MDRI) mid 2006.
The Bank of Tanzania (BoT) monthly economic review for March, this
year, shows that the ratio of the debt to Gross Domestic Product (GDP) rose to
40.9 per cent from 31.1 per cent.
It
said the ratio of public guaranteed debt to GDP was also up to 33.4 per cent
from 23.8 per cent.
The bank report shows an increase of 73.7 million US dollars (0.8 per
cent) and 820 million US dollars (9.1 per cent) to the total external debt over
the amount recorded at the end of January, this year and the corresponding
period in 2011.
"The increase over the
period under review has, however, partly been due to accumulation of interest
arrears on unserviced bilateral debt," stated the report.
Interest arrears are due to unserviced bilateral debt mainly from Iran,
Iraq and Japan, which are yet to provide relief and unreported, interest
payments on private sector debt. Other countries for which debt is not serviced
include Brazil, Angola, Zambia, China, India, Egypt and United Arab Emirates.
The currency composition of outstanding external debt shows that
Special Drawing Rights (SDR) was leading currency accounting for 49 per cent of
external debt. However, after decomposition of SDR and Africa Unit of Account
(AUA) into their basket currencies USD became predominant currency at 50.4 per
cent followed by Euro which accounted for 25.1 per cent.
As of February 2012, external debt disbursed amounted to 62.8 million
US dollars (about 100.5bn/-), while external debt service amounted to 9.7
million US dollars (about 15.5bn/-) of which 3.1 million US dollars (about
4.9bn/-) was principal and 6.6 million US dollars (about 10.6bn/-) interest
payments. The amount of debt serviced was around 1.6 per cent of export of
goods and services.
The BoT report also show the stock of domestic debt declining slightly
by 8.9bn/- to 4.09tr/- due to small issuance of Treasury bills compared to
matured obligations. Government bonds continued to be predominant instruments
in domestic debt portfolio, accounting for 73.3 per cent followed by Treasury
bills with commercial banks remaining leading investors holding 46.7 per cent
followed by BoT and pension funds.
Analysis of domestic debt holding by tenure shows that commercial banks
dominated in both long term and short term debts accounting for 41.2 per cent
and 68.9 per cent respectively. The supremacy of commercial banks in long term
debt, in particular, is a reflection of narrow investor base. Domestic debt
issued during the month amounted to 142.9bn/-, out of which 97.9bn/- was Treasury bills and 45bn/- Treasury bonds.
The cumulative domestic debt issued for financing purposes in financial
year 2011/12 stood at 770.5bn/-, being 530.4bn/- Treasury bills and 240.1bn/-
Treasury bonds. A total of 169.4bn/- was due for payment, out of which
principal amounting to 141.4bn/- was rolled over while interest amounting to
27.9bn paid out of government resources.
The cumulative actual debt payments in the financial year 2011/12
reached 1.002tr/-, of which 771.3bn/-, equivalent to about 16.9 per cent of
domestic revenue, was principal repayments and 231.4bn/- which is 5.1 per cent
of domestic revenue.
Source: The Daily News,dailynews.co.tz, reported by Sebastian Mrindoko
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