Wednesday, August 15, 2012
TANZANIA EXTERNAL DEBT HITS U.S $10 BILLION
Tanzania's external debt stock stood at $10.35b, being $386m higher than the amount recorded at the end of May 2012, the central bank's monthly economic review report for July released shows.
"The increase was mainly on account of new external debt disbursements to the government and private sector accumulation of interest arrears," the Bank of Tanzania (BoT) economic review said.
BoT report said out of the external debt stock 85.7% was disbursed outstanding debt (DOD) and 14.3% was interest arrears as the ratio of external debt to GDP in nominal terms stood at 43.0% as at end of June 2012.
However, as per provisional results of the latest Debt Sustainability Assessment (DSA) conducted in March 2012, the present value of external debt to GDP was 18.9% against the sustainability threshold of 50%, the report added.
The profile of external debt by creditor category indicates that stocks of multilateral, bilateral, commercial and export credit debts increased by 2.9%, 0.3%, 10.3% and 2.6% respectively.
While the profile of external debt stock by borrower category indicates that the central government share of the total external debt stock was 76.4%.
It further added the private and public sector corporations debts accounted for 18.3% and 5.3% of the total external debt stock respectively. The profile of external debt by currency composition indicates that the debt stock was mainly denominated in Special Drawing Right (SDR), US Dollar (USD) and African Unit of Account (AUA), the report said.
However, after decomposition of SDR and AUA into basket currencies, USD became the predominant currency at 53.8% followed by Euro at 26.5%.
In June, 2012, disbursed and recorded external debt amounted to $336.3m, while external debt service amounted to $11.7m of which $4.0m was principal, $3.5m was interest payments and $4.2m was arranger fees.
The amounts were paid to Credit Suisse London $4.2m, IDA $1.4m, OPEC Fund $1.6m, Export-Import Bank of China $0.8m and JICA $0.7m. Payments were also made to Kuwait Fund $0.8m, ING Bank N.V $1.2m and others $1.0m.
The stock of domestic debt as end of June, 2012 decreased by Tsh52.3bn ($33m) to Tsh4.17trn ($2.65bn) compared to Tsh4.23trn ($2.68bn) registered at the end of preceding month. The decrease was due to relatively low issuance of Treasury Bills and Bonds relative to maturing obligations.
The profile of government domestic debt by instruments indicates that government securities accounted for 100% of the total debt stock with government bonds accounting for the largest share of 73.5% followed by Treasury bills and government stocks which accounted for 20.3% and 6.2% respectively.
On annual basis, domestic debt stock increased to Tsh4.17trn ($2.65bn) as at the end of June 2012 from Tsh3.73trn ($2.37bn) recorded in the corresponding period in 2011.
"The increase was on account of large issuance of government bonds and treasury bills as compared to maturing obligations," the central bank said.
The profile of domestic debt by holder category indicates that commercial banks were the leading investors in government securities holding 46.4% of domestic debt stock, followed by the BOT and pension funds, which held 23.7% and 19.2%, respectively.
During June 2012, government securities issued amounted to Tsh103.9bn ($66m), out of which, Tsh58.7bn ($37m) were treasury bills, and Tsh45bn ($28.62m) treasury bonds.
The cumulative domestic debt issued for financing purposes in financial year 2011/12 stood at Tsh1.41trn ($896.94m), out of which Tsh990.6bn ($630m) were treasury bills and Tsh418.5bn ($266m) treasury bonds.
A total of Tsh211.6bn ($134.61m) was due for payment, out of which the principal amounting to Tsh157.6bn ($100.51m) was rolled over while interest amounting to Tsh54bn ($34.37m) was paid out of government resources.
EAST AFRICAN BUSINESS WEEK