- Bank of Tanzania reopens 15-year bond with a 14.5% coupon
- Treasury bonds now dominate 80% of domestic debt as investor appetite surges
DAR ES SALAAM, TANZANIA – Tanzania has reopened bidding for a $85.68 million 15-year treasury bond, offering one of East Africa’s highest government yields at 14.5% as investors continue to pile into the market.
The bond, first issued on March 5, will mature on March 6, 2040, according to a notice posted Wednesday by the Bank of Tanzania (BOT). The coupon rate is nearly four times higher than the country’s July inflation of 3.3%.
“This coupon offers investors significant real returns, with interest income exempted from withholding tax,” the central bank said. Settlement is scheduled for Thursday under the country’s T+1 system.
The issue is split into 191.8 billion shillings for competitive bids and 21.3 billion shillings for non-competitive, and will be listed on the Dar es Salaam Stock Exchange. Investors must place a minimum bid of 1 million shillings, with successful bidders paying a settlement price that includes 6.7137 shillings in accrued interest per 100 shillings face value.
Rising demand for long-term debt
The auction comes as Tanzania’s domestic debt has swelled to 34.76 trillion shillings as of May, equivalent to 32.3% of the nation’s total debt of 107.7 trillion shillings ($39.88 billion). Treasury bonds now account for nearly 80% of the domestic debt stock, compared with past reliance on short-term instruments.
Investor appetite has been strong all year, with recent auctions breaking records. In May, a 25-year bond sale drew 794 billion shillings in bids, while a 20-year April offering attracted 760 billion shillings — both far above the amounts allocated.
The BOT, led by Governor Emmanuel Tutuba, has introduced reforms to enhance transparency and broaden investor participation. In January, the central bank shifted to market-driven coupon rate setting. By April, it also required separate disclosure of clean prices, accrued interest, and settlement prices to improve pricing clarity.
In July, the bank cut its benchmark interest rate to 5.75% from 6% – its first move since adopting an interest rate-based monetary policy framework in January 2024. Inflation has since stayed within the 3% to 3.3% range, comfortably inside the official 3–5% target.
Planning and investment minister Kitila Mkumbo in June projected that the economy would expand 6% in 2025, up from 5.5% last year, outpacing the Sub-Saharan Africa average of 3.8%.
