Tanzania may struggle to secure funding due to its battered image, president says

Tanzanian President Samia Suluhu Hassan warned that the country's international reputation has been damaged by the disputed October election and ensuing clashes—criticized by rights groups, the UN and African Union observers who reported likely killings and ballot-box stuffing—which she said could make securing loans from international institutions more difficult. Speaking at a ministerial swearing-in, she urged officials to focus on mobilizing domestic resources even as the finance ministry plans external borrowing of 8.7 trillion shillings ($3.6 billion) for 2025/26 and had budgeted 5.13 trillion shillings in external grants and concessional loans for 2024/25. Hassan has pledged to investigate the violence and offered condolences, but the government disputes the critics, and the reputational hit could complicate Tanzania's access to concessional financing and its fiscal plans.

Analysis

President Samia Suluhu Hassan warned that Tanzania's international reputation has been damaged by the disputed October election and subsequent security clashes, noting this could impair access to loans from international institutions. Rights groups, the United Nations and African Union observers have reported likely large-scale killings and documented ballot-box stuffing, while the government contests those findings; Hassan has pledged an investigation and offered condolences but did not specify the incidents she referenced.

The finance ministry has signalled substantive external financing needs, planning 8.7 trillion Tanzanian shillings (about $3.6 billion at the article's 1 USD = 2,400 TZS rate) of external borrowing for 2025/26 and recording 5.13 trillion shillings of external grants and concessional loans in the 2024/25 budget. Hassan urged ministers to prioritise domestic revenue mobilisation, flagging a potential shift in funding strategy if concessional or commercial external financing becomes harder to secure.

The reputational hit elevates sovereign and political risk for Tanzania, increasing the likelihood of higher borrowing costs, delayed disbursements and tighter terms from multilateral and bilateral lenders; this creates execution risk for the fiscal plan and externally funded projects. Investors should monitor formal responses from major lenders, the outcome of the promised investigation, actual bond issuance or loan agreements against the planned 8.7 trillion shilling borrowing, and indicators of domestic revenue progress as proximate drivers of credit and market outcomes.

Key Decisions for Investors

• Defer adding material new long-duration Tanzania sovereign exposure until multilateral and bilateral lenders issue clear positions or until the government demonstrates progress on the promised investigation and funding commitments
• Tilt existing exposure toward shorter-dated instruments and consider hedging TZS and credit risk given higher probability of constrained access to concessional financing and potential increases in borrowing costs
• Monitor announcements from major multilateral lenders and actual execution of the 8.7 trillion shilling 2025/26 external borrowing plan and adjust positions rapidly if disbursements are delayed or conditionality tightens