A TOTAL of 17.218.21trn/- has been borrowed from external sources to finance various development projects in the past three years, the government has declared.

Dr Mwigulu Nchemba, the Finance minister, made this observation when tabling the 49.35trn/- budget estimates for fiscal 2024/25 in the National Assembly on Thursday.

The funds were sought for implementing strategic projects including the standard gauge railway (SGR) in several lots plus the procurement of train wagons and electric locomotive engines.

The regions having additional benefits from implementing this project include Dar es Salaam, Morogoro, Dodoma, Singida, Tabora, Shinyanga, Mwanza, Katavi and Kigoma, he said.

Implementation of the projects will open up economic opportunities with neighbouring countries such as Burundi and the Democratic Republic of Congo, he said.

“The government is building roads and 14 airports, altogether taking up $2.81bn (7.34trn/-), comprising of concessional loans from development partners such as the African Development Bank (AfDB), the World Bank, the European Investment Bank (EIB), the Japanese International Cooperation Agency (JICA), the Kuwait Fund for Arab Economic Development, and the OPEC Fund for International Development,” he stated.

He listed key roads where foreign funding is being directed as the Dar es Salaam Bus Rapid Transit phase II (Kariakoo-Mbagala), phase III (Post Office – Gongolamboto) and phase IV (Post Office – Tegeta), the Dodoma city outer ring road project, Mnivata – Masasi - Newala Road, the Tanzania/Burundi road upgrading, Rumonge –Gitaza/Kabingo onward to Kasulu - Manyovu road. There is also the trans-border Bagamoyo-Horohoro/Lunga Lunga -Malindi road and the Malagarasi–Ilunde-Uvinza Road.

Others are Kazilambwa – Chagu Road, Kasekese – Ikola – Karema Port road, Kahama - Bulyanhulu – Kakola road, Lusahunga- Rusumo, Mtwara – Mingoyo – Masasi, apart from the Rutukila – Songea, Iringa – Msembe road, and the Jangwani Bridge.

The works are being carried out concurrently with the construction of Msalato International Airport as well as Tanga, Lake Manyara and Iringa airports. Some of the projects are expected to be completed during the next financial year, he stated 2024/25.

By March 2024, the overall national debt had surged to 91.7trn/-, up from 77trn/- reported the previous year, a 19.1 percent increase, he said, noting that the increase in debt is tied to new loans to finance development projects.

The domestic debt amounted to 30.7trn/- and external debt stood at 60.9trn/-, where commercial banks held 42.0 percent of the domestic debt, up from 34.8 percent in the same period last year. Social security funds held 33.9 percent while individual bond holders had 11.3 percent of the debt, insurance companies holding 7.6 percent, the minister explained.

Shilling depreciation against the US dollar ballooned external debt liabilities as in the past three years the shilling slid from 2,309.96/- to 2,569.66/- to the dollar, a decrease of 11.24 percent. This touched off a 5.428.92trn/- mark up on the debt, he stated.

Domestic debt mark-up related to issuance of special bonds amounting to 2.176.7trn/- during fiscal 2021/22 to service the government’s debt to the Public Service Social Security Fund (PSSSF), for contributions of employees hired before 1999.

The government was taking deliberate measures to ensure that the loans contracted are used for intended purposes, enabling the country to repay debts on time, ensuring a sound financial position and maintaining international credibility, he added.