43.9 C
Tunisia
Thursday 24 June 2021
HomeNewsInterest arrears add to Tanzania’s external debt burden

Interest arrears add to Tanzania’s external debt burden

New disbursements and accumulation of interest arrears raised Tanzania’s external debt stock at the end of December 2012 to US$10.6 billion, an increase of US$726.5 million from the stock recorded at the end of the corresponding period in 2011, the central bank here has disclosed.

The Bank of Tanzania said in its Monthly Economic Review for January 2013 that the debt stock also increased by US$71.8 million from the amount recorded in the preceding month.

“Out of the external debt stock, disbursed outstanding debt accounted for 85.7 percent and the remaining was interest arrears,” the bank explained in the report made available to PANA Wednesday.

According to the report, the ratio of public and private sector external debt to GDP in nominal terms was 30.7 percent and 6.6 percent respectively.

Tanzania’s 2012 projected annual GDP was US$28.5 billion.

Based on results of the latest Debt Sustainability Analysis (DSA) conducted in March 2012, the present value of debt to GDP was 18.9 percent, compared to the sustainability threshold of 50 percent.

The profile of external debt by borrower category showed that the central Government debt increased to US$8.2 billion while its share in external debt stock rose to 77.3 percent from 77.0 percent recorded at the end November 2012.

“The increase was due to new disbursements received from International Development Association (IDA) and accumulation of interest arrears on non-serviced bilateral debt,” the bank’s report said, noting that external debt stock by creditor in 2012 increased across all categories, except for export credit.

Multilateral and commercial debt shot up due to new disbursements, while the increase in bilateral debt was due to accumulation of interest arrears on unserviced debt.

According to the report, disbursed outstanding debt by use of funds showed that a large proportion of outstanding debt was utilised in social welfare and education; followed by balance of payment and budget support; and transport and telecommunication.

External debt disbursements received during the year ending December 2012 amounted to US$1.019.2 billion, out of which US$980 million was disbursed to the government.

Meanwhile, external debt service during December 2012 amounted to US$18.9 million, of which US$4.4 million was principal repayments, US$1.7 million was interest payments and US$12.8 million was management fees paid to Exim Bank China.

Tanzania’s total external debt payment during 2012 was US$129.6 million.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

MOST POPULAR

HOT NEWS