BANK OF TANZANIA

ANNUAL REPORT
2018/19
 BANK OF TANZANIA

ANNUAL REPORT 2018/19

 Bank of Tanzania Annual Report 2018/19

© Bank of Tanzania.
All rights reserved. This report is intended for general information only and is not intended to serve as
financial or other advice. No content of this publication may be quoted or reproduced in any form without
fully acknowledging the Bank of Tanzania Annual Report as the source. The Bank of Tanzania has taken
every precaution to ensure accuracy of information and, therefore, shall not be liable to any person for
inaccurate information or opinion contained in this publication.

For any inquiry please contact:

Director of Economic Research and Policy
Bank of Tanzania, 2 Mirambo Street 11884, Dar es Salaam
Telephone: +255 22 223 3328/9
Email: [email protected]

This report is also available at: http://www.bot.go.tz

ISSN 0067-3757

B
 Bank of Tanzania Annual Report 2018/19

December 2019

Hon. Dr. Philip I. Mpango (MP)

Minister for Finance and Planning
United Republic of Tanzania
Treasury Square Building
40468 Dodoma

Honourable Minister,

LETTER OF TRANSMITTAL

In accordance with Section 21 (1) of the Bank of Tanzania Act, 2006 as amended, I hereby submit:

a) The report on economic developments and the Bank of Tanzania’s operations, in particular, the
implementation and outcome of monetary policy, and other activities during the fiscal year 2018/19,
and
b) The Bank of Tanzania Balance Sheet as at 30th June 2019, the Profit and Loss Accounts for the year
ended 30th June 2019 and associated financial statements, as well as detailed notes to the accounts
for the year and the previous year’s comparative data certified by external auditors along with the
auditors’ opinion.

Yours sincerely,

Professor Florens D.A.M. Luoga

Governor
Bank of Tanzania

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 Bank of Tanzania Annual Report 2018/19

Contents

LETTER OF TRANSMITTAL ......................................................................................................... i

Governor’s Foreword .................................................................................................................... iii

Board of Directors ........................................................................................................................ iv

Bank of Tanzania Mandate, Mission, Vision and Core Values ...................................................... vi

Monetary Policy Framework of the Bank of Tanzania .................................................................. vii

Executive Summary .................................................................................................................... ix

PART I: CONDUCT OF MONETARY POLICY ............................................................................ 1

PART II: ECONOMIC PERFORMANCE ...................................................................................... 7

1.0 Domestic Economic Developments ................................................................................. 8

1.1 Output, Prices and Food Supply ............................................................................... 8

1.2 Financial Markets ........................................................................................................ 14

1.3 Public Finance ............................................................................................................ 16

2.0 External Sector ................................................................................................................... 20

3.0 Financial Sector .................................................................................................................. 24

4.0 Payment Systems .............................................................................................................. 28

5.0 Zanzibar Economic Performance ..................................................................................... 30

6.0 Global and Regional Economic Performance ...................................................................... 36

PART III: BANK OF TANZANIA OPERATIONS .......................................................................... 41

PART IV: ANNUAL ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2019 ................................ 49

PART V: CALENDAR OF IMPORTANT MONETARY AND FINANCIAL EVENTS .................... 193

PART VI: STATISTICAL TABLES .................................................................................................. 197

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 Bank of Tanzania Annual Report 2018/19

Governor’s Foreword

It is my great pleasure to present the Bank of Tanzania annual report for the year ended 30th June 2019.
The report entails implementation of monetary policy, a comprehensive overview of the domestic economy
and external environment, as well as operations of the Bank, which include financial statements.

The Bank of Tanzania implemented an accommodative monetary policy to revitalize private sector credit
growth, thereby reinforcing sustainable high growth momentum of the economy. The policy stance was
consistent with the objective of maintaining low inflation close to the country’s medium-term target of 5.0
percent, and within the EAC and SADC convergence benchmarks of utmost 8.0 percent and between 3.0
and 7.0 percent, respectively. The outcomes of accommodative monetary policy included fast recovery of
private sector credit growth and fall in interest rates.

The economy sustained high growth momentum and diversified. Real GDP grew by 7.0 percent in
2018, faster than 6.8 percent in 2017, driven mostly by investment in social and physical infrastructure,
agriculture, manufacturing, and trade. The fastest growing activities were agriculture, construction, and
transport. Fiscal policy was on track. Revenue collection improved and expenditure was rationalized on
available resources and priorities. The external sector of the economy performed satisfactorily, albeit faced
with global challenges of trade war between the US and China, geopolitical tensions in some regions of
the world, and policy uncertainties in advanced economies. These challenges led to a decrease in demand
for crop exports (particularly cotton), low return on foreign exchange reserves and increase in petroleum
products.

Monetary policy will continue to focus on maintaining low inflation, ensure stability of the exchange rate,
and respond to economic conditions and policies in an endeavour to sustain the growth of the economy.
The Bank will also improve the functioning of the financial sector, among other intended outcomes, to
reduce credit interest rates and improve lending to the private sector. This includes measures to improve
payment systems in the process of digitization of the economy, as well as spearheading financial inclusion
initiatives and development of financial markets.

I would like to thank the Board of Directors for guidance and contributions made in formulation and
implementation of monetary policy, and oversight of functions of the Bank during 2018/19. I would also
like to express my gratitude to the management and staff for their commitment and professionalism in
discharging their duties, which enabled the Bank to achieve its objectives.

It is my sincere hope that you will find this Annual Report beneficial.

Professor Florens D.A.M. Luoga

Governor
Bank of Tanzania

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 Bank of Tanzania Annual Report 2018/19

Board of Directors

The Board is at the apex of the governance structure of the Bank of Tanzania, and is chaired by the
Governor of the Bank of Tanzania, who is also the Chief Executive Officer of the Bank. The Board is
mainly responsible for determination of the policy of the Bank and approval of its budget. Bank of
Tanzania Board of Directors is composed of the Governor; Deputy Governors; the Permanent Secretary,
Ministry of Finance and Planning of the Government of United Republic of Tanzania (URT); the Principal
Secretary, Ministry of Finance and Planning of the Revolutionary Government of Zanzibar (RGZ); and
four non-executive Directors. The Permanent Secretary, Ministry of Finance and Planning of the URT and
the Principal Secretary, Ministry of Finance and Planning of the RGZ may appoint, in writing, persons in
the public service to be their representatives. The appointed persons have the powers of the Permanent
Secretary or Principal Secretary, in their capacities as members of the Board.

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 Bank of Tanzania Annual Report 2018/19

Board of Directors

Prof. Florens D.A.M. Luoga

Governor, Chairman

Dr. Yamungu M. Kayandabila Dr. Bernard Y. Kibesse Mr. Julian B. Raphael

Deputy Governor, Economic and Deputy Governor, Financial Stability and Deputy Governor, Administration and
Financial Policies (EFP) Financial Deepening (FSD) Internal Controls (AIC)

Mr. Khamis M. Omar Mrs. Mary N. Maganga Prof. Nehemiah E. Osoro

Principal Secretary to the Treasury, Representative of the Ministry of Director
RGZ Finance and Planning (URT)

Mr. Geoffrey I. Mwambe Mr. Joseph O. Haule Mr. Joseph A. Meza1

Director Director Director

Mr. Palloty M. Luena

Secretary
1
Appointed on 5th April, 2019

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 Bank of Tanzania Annual Report 2018/19

Bank of Tanzania Mandate, Mission, Vision and Core Values

Mandate:
The primary objective of the Bank of Tanzania, as enshrined in the Bank of Tanzania Act 2006, Cap.
197, is to formulate, define and implement monetary policy directed to the economic objective of
maintaining domestic price stability conducive to a balanced and sustainable growth of the national
economy. Without prejudice to aforementioned, the Bank also ensures the integrity of the financial
system, supports the general economic policy of the Government, and promotes sound monetary,
credit and banking conditions conducive to the development of the economy.

Mission:
Maintain price stability and integrity of the financial system for inclusive economic growth.

Vision:
Attained macro-economic stability, modernized financial system and expanded financial inclusion
that supports Tanzania’s inclusive industrial economic growth.

Core Values:
Core values represent the manner in which the Bank conducts its business and interacts with
stakeholders. In this regard, the Bank embraces the following core values:

i. Integrity: We uphold high ethical and moral standards in our conduct reflected by honesty,
sincerity, truthfulness, and confidentiality in executing our duties;

ii. Inclusiveness: We embrace broad participation, team work and harnessing multiple skills and
experiences in discharging our work objectives;

iii. Excellence: We seek to execute our duties professionally, with creativity, innovativeness and
continuously striving to improve organizational performance; and

iv. Accountability: We are collectively and individually accountable in discharging our responsibilities.

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 Bank of Tanzania Annual Report 2018/19

Monetary Policy Framework of the Bank of Tanzania

The monetary policy framework of the Bank of Tanzania focuses on maintaining domestic price
stability by targeting growth rate of money supply.

Objective of the Monetary Policy

The primary objective of the monetary policy is to maintain price stability, which is defined as low
and stable inflation rate over time. The country’s medium-term target is 5.0 percent and convergence
criteria for EAC and SADC are 8.0 percent (set as maximum) and 3-7.0 percent, respectively. The
inflation target is considered appropriate to support a sustainable growth of the economy. To achieve
the objective of monetary policy, the Bank focuses on maintaining adequate level of liquidity in the
economy and ensuring stability of interest rates and exchange rate.

Intermediate Target
The Bank of Tanzania controls inflation by managing the growth of money supply. Extended broad
money supply (M3), which is estimated to have the closest relationship with the rate of inflation, is
used as an intermediate target variable. M3 comprises of currency in circulation outside the banking
system and deposits of residents with banks, including foreign currency deposits.

Operating Target
In order to influence growth of M3, the Bank of Tanzania controls growth of reserve money, elsewhere
referred to as base money or high powered money. Reserve money is related to money supply through
the money multiplier. It basically comprises currency in circulation outside the banking system, cash
held in the vaults of banks and deposits of banks kept with the Bank of Tanzania in local currency.

Monetary Policy Instruments

The Bank of Tanzania utilizes a variety of instruments to conduct monetary policy. The monetary
policy instruments include open market operations, i.e., selling or buying debt securities, and sale
and purchase of foreign currency in the inter-bank foreign exchange market. In addition, repurchase
agreements (repo) and reverse repurchase agreements (reverse repo) are used. The statutory minimum
reserve requirement ratio (SMR) and discount rate are also part of monetary policy instruments. There
are also standby credit facilities—intraday and Lombard loan facilities.

Communication
The Bank of Tanzania exercises a high degree of transparency on its decisions. The decisions of
the Monetary Policy Committee (MPC) are communicated to banks through post-MPC meeting
engagements with CEO of banks, and to the public through the media. In addition, the Bank publishes
various periodic reports, which highlight monetary policy stance, the outcome of monetary policy
implementation, and developments of the economy at large. The reports are available on the Bank of
Tanzania website.

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 Bank of Tanzania Annual Report 2018/19

Modalities for Monetary Policy Implementation

i. At the end of every fiscal year, the Bank sets annual monetary policy targets for the coming fiscal
year in its Monetary Policy Statement in accordance with the broader macroeconomic policy
objectives of the Government.

ii. The Monetary Policy Statement is approved by the Bank’s Board of Directors and submitted to
the Minister for Finance and Planning, who in turn submits it to the National Assembly.

iii. The same procedure is applied in the mid-year review of the Monetary Policy Statement, which
reports progress on the implementation of the monetary policy, and provides the outlook for
the remaining period of the year and measures to be undertaken in order to achieve the policy
objectives.

iv. The Monetary Policy Committee (MPC) of the Board of Directors of the Bank is responsible
for setting the monetary policy direction bi-monthly, in line with the targets set in the Monetary
Policy Statement.

v. The Surveillance Committee of the Bank’s Management meets daily to evaluate daily liquidity
developments and decide on the measures to be taken in order to keep liquidity within the
desired path.

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 Bank of Tanzania Annual Report 2018/19

Executive Summary

Monetary policy was accommodative in the country, stability of exchange rate, subdued oil
2018/19. The Bank of Tanzania implemented prices in the world market, and prudent monetary
an accommodative monetary policy to ensure and fiscal policies. Inflation is projected to remain
adequate level of liquidity in the economy and low, below the medium-term target of 5.0 percent
steer high growth of credit to the private sector in 2019/20. The producer price index (PPI) grew
in support of economic growth, without prejudice by 9.0 percent to 100.7 in 2018/19, compared
to inflation target. The accommodative monetary with a growth of 2.9 percent in the previous year.
policy was implemented using several monetary
policy measures such as lowering of the discount The growth of the economy remained high and
rate from 9.0 to 7.0 percent and providing liquidity among the fastest growing economies in sub-
to banks through open market operations, reverse Saharan Africa. Real gross domestic product grew
repo and standby credit facilities and discount by 7.0 percent in 2018 compared with 6.8 percent
window. in 2017. The robust growth of output was driven
by a number of activities, reflecting the diversified
The accommodative monetary policy led to a nature of the economy. The main drivers were
pick up in the growth of credit to private sector construction, agriculture, and transport, altogether
to 7.6 percent in 2018/19 from 4.0 percent in the accounting for more than half of the total growth.
preceding year. Overnight interbank cash market The fastest growing activities were arts and
interest rate remained low, averaging 3.55 percent entertainment, construction, and transport.
compared with 2.74 percent a year before. Deposit Output growth is expected to remain high in
and lending rates by banks trended downward, 2019, supported by prudent fiscal and monetary
albeit at varying magnitude, to 7.58 percent policies, improving business environment, as well
and 17.41 percent from 9.29 percent and 17.86 as large public and private sector investment.
percent, respectively. The overall yields on Treasury
bills increased slightly to 8.16 percent from 7.29 Fiscal policy of the government remained
percent. The Bank will sustain accommodative streamlined in 2018/19, manifested in measures
monetary policy in 2019/20 leveraging from the of improving revenue collection and rationalizing
expected low inflationary environment. expenditure based on available resources and
priorities. Domestic revenue collection amounted
Inflation remained low at a single digit throughout to TZS 18,527.3 billion (equivalent to around
the year. Twelve-month headline (overall) CPI 13.8 percent of GDP), of which 86.1 percent was
inflation averaged 3.2 percent in 2018/19 tax revenue. External grants amounted to TZS
compared with 4.3 percent in the previous year, 461.2 billion, equivalent to 0.3 percent of GDP.
below the country’s medium-term target of Expenditure amounted to TZS 22,265.4 billion
5.0 percent and EAC and SADC convergence (equivalent to 16.6 percent of GDP), of which TZS
benchmarks of utmost 8.0 percent and between 13,811.2 billion was recurrent expenditure. The
3.0 and 7.0 percent, respectively. The low level of overall fiscal deficit was 3.1 percent of GDP, within
inflation was driven by moderation in food prices the country target of not more than 3.2 percent.
owing to adequate food supply in most parts of The deficit was financed through borrowing.

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 Bank of Tanzania Annual Report 2018/19

National debt increased to support implementation of financial services was sound and liquid,
of development projects but remained significantly despite facing relatively high non-performing
below sustainability thresholds. National debt loans. Capital and liquidity levels of the banking
stock—domestic and external (disbursed sector were above regulatory requirements. The
outstanding and interest arrears)—amounted to banking sector performance indicators, including
USD 28,408.8 million at the end of June 2019, an the ratios of core capital and total capital to
increase of 5.3 percent from June 2018. Public total risk weighted assets and off-balance sheet
and public guaranteed debt was 81.7 percent exposures, and liquid assets to demand liabilities
of the debt stock (equivalent to 40.1 percent of were within regulatory thresholds. The ratio of
GDP) and the balance was private sector external non-performing loans to gross loans was above
debt. All debt indicators of public debt, in present the country’s desirable benchmark of 5 percent.
value terms, were below sustainability thresholds, Owing to measures taken by Bank of Tanzania
implying low risk of debt distress. and implemented by banks and microfinance
institutions, the ratio is expected to gradually
The balance of payments weakened, due to decline in the near future.
widening of the current account balance. The
current account deficit widened but remained As part of the implementation of the National
moderate at 4.5 percent of GDP and sustainable Financial Inclusion Framework (2018-2022) which
because was largely driven by imports of capital aims to improve financial inclusion by increasing
and intermediate goods, which support future access and usage of financial services, the
growth. The current account balance was a deficit Bank of Tanzania executed several measures
of USD 2,645.3 million in 2018/19 compared with in collaboration with stakeholders. Specifically,
deficit of USD 1,771.7 million in the preceding financial inclusion initiatives included ways to
year. Exports were virtually unchanged, while increase access and usage of financial services
imports increased. Gross official foreign exchange by adult population from 86 percent and 65
reserves remained adequate, despite the increase percent in 2017 to 92 percent and 75 percent
in imports. The reserves were sufficient to cover by 2022, respectively. Financial Education
more than 4.3 months of projected imports, above Consumer Strategy was developed to address
the country benchmark of at least 4 months and proper approaches to deliver financial education
EAC convergence benchmark of 4.5 months. The to different segments of the population. This was
shilling was fairly stable against the US dollar, complemented by a mapping exercise to identify
underpinned by low inflation, subdued oil prices key stakeholders for delivering financial education
in the world market, and sustained prudent programs. In addition, progress was made in a
monetary and fiscal policies. The trade price number of areas, including outreach to rural areas
index, a measure of terms of trade, was fairly through mobile money services.
stable during 2019/20.
Payment systems in the country improved,
Financial deepening continued in the wake of remained safe and reliable, despite increasing
implementation of financial sector reforms. The dynamics in financial innovations, particularly the
financial sector expanded and remained stable. application of financial technology. The number
The banking sector, which dominates provision of providers and users of payment systems

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 Bank of Tanzania Annual Report 2018/19

increased and interoperability of mobile financial 83.5 percent was external debt.
services contributed to growth of mobile money
transactions. To further interoperability among The current account was a deficit of USD 66.1
payment systems providers, the Bank of Tanzania million in 2018/19 compared to a surplus of USD
commenced development of a universal payment 13.8 million in 2017/18, on account of increase in
system platform, Tanzania Instant Payment imports and decline in exports. Nonetheless, the
System. current account deficit was low at 4.1 percent of
GDP.
The performance of Zanzibar economy was
strong in 2018, as in the preceding year. Real The global economy slowed owing to increased
GDP grew by 7.1 percent compared with 7.7 risks and imbalances, which undermined trade
percent in 2017. The underlying drivers of growth and investment. The risks and imbalances
were accommodation and food-related services, emanated from trade disputes and tariffs,
agriculture, trade and repair, and transport and geopolitical tensions and Brexit uncertainties. The
storage. The fastest growing activities were global economy grew at a relatively slow pace of
human health and social work, transport and 3.6 percent in 2018 compared with 3.8 percent in
storage, accommodation and food services and 2017. The slow growth was caused by escalation
arts, entertainment and recreation sub-groups. of trade tensions and tariff hikes between the US
The growth of the economy is projected to remain and China, decline in business confidence, tight
high in 2019. financial conditions and growing concerns about
Brexit. Headline inflation averaged 3.6 percent in
Inflation was low in 2018/19, averaging 3.3 percent, 2018 compared with 3.2 percent in 2017 owing to
below 4.7 percent in the preceding year and the high oil prices particularly in the first nine months
5.0 percent medium-term target. The low inflation of 2018.
was a result of a decline in both food and non-
food inflation, the former was driven by adequate Economic growth in sub-Saharan Africa improved
domestic food supply and government measures to 3.1 percent in 2018 from 2.9 percent in
to facilitate importation of rice, wheat and sugar; the previous year, driven mostly by economic
the latter was due to subdued fuel prices. The low performance of non-oil resource intensive
inflation is projected to be sustained in 2019/20. countries because of investment in infrastructure.
In SADC countries, output growth was increased,
On fiscal front, the Revolutionary Government except in Angola and Namibia. Tanzania was the
of Zanzibar focused on improving revenue and fastest growing economy in the SADC region.
streamlining expenditure. This led to an overall Inflation averaged 8.2 percent compared with
deficit of around 9.0 percent of GDP in 2018/19, 9.9 percent in 2017. Tanzania’s intra-SADC trade
which was financed through program external increased by 2.3 percent to USD 1,607.1 million.
loans and domestic borrowing. The debt stock,
external and domestic debt, amounted to TZS Economic growth in EAC countries also improved,
806.8 billion in June 2019 from TZS 472.4 billion averaging 5.6 percent in 2018 from 4.4 percent in
in June 2018. The debt stock was equivalent to 2017. The high growth was broad-based, mostly
22.0 percent of GDP from 14.0 percent and about driven by agriculture, construction, services,

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 Bank of Tanzania Annual Report 2018/19

transport and manufacturing activities. Inflation

was contained below the convergence benchmark
of utmost 8.0 percent in all countries, excluding
South Sudan because of data challenges,
averaged 1.9 percent in 2018. The low inflation
resulted from improved food supply and low cost
of transport. Tanzania’s intra-EAC trade increased
by 12.7 percent to USD 752.0 million in 2018.

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 Bank of Tanzania Annual Report 2018/19

PART I

CONDUCT OF MONETARY POLICY

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 Bank of Tanzania Annual Report 2018/19

CONDUCT OF MONETARY POLICY

1.1 Monetary Policy Targets and Performance use of technology in financial services delivery.
In 2018/19, monetary policy was designed to Therefore, economic activities were facilitated by
continue supporting macroeconomic stability, increase in money supply and velocity of money.
including ensuring low and stable inflation and
sustainable high economic growth. In this regard, Chart 1.1: Money Supply
the focus of monetary policy included achieving Percent
M3 Money stock (LHS) M3 growth (RHS)
the following monetary policy targets: 28,000 10

i. Keeping the growth of reserve money steady, 22,400 8

reaching an annual growth of 11.5 percent in

16,800 6

Billions of TZS
June 2019.

Percent
ii. Ensuring stable growth of extended broad 11,200 4

money supply, to reach 12.2 percent by the 5,600 2

end of June 2019.

0 0
iii. Facilitating credit growth to the private sector,

Mar-18

Mar-19
Jun-17

Jun-18

Jun-19
Dec-17

Dec-18
Sep-17

Sep-18
to reach 10.2 percent in the year ending June
Source: Bank of Tanzania and banks
2019. Note: RHS denotes right-hand side; and LHS, denotes Left-hand scale.

iv. Maintaining adequate gross official foreign

The accommodative monetary policy, coupled
reserves, covering at least 4 months of
with implementation of measures of improving
imports of goods and services.
the business environment and addressing other
constraints to bank lending such as high non-
These monetary policy targets reflected an
performing loans, led to a strong recovery of
accommodative policy stance, leveraging from a
credit to private sector. The growth of credit to the
sustained low inflationary environment, in order
private sector reached a peak of 10.6 percent in
to spur fast recovery of private sector credit
April 2019 before declining to 7.6 percent in June
growth and high economic growth. Accordingly,
2019. This growth was higher than 4.0 percent
the Bank of Tanzania lowered discount rate from
in June 2018, albeit lower than the target of 10.2
9.0 percent to 7.0 percent in August 2018 and
percent (Chart 1.2).
increased supply of liquidity to banks through a
variety of open market operations and standby
Chart 1.2: Credit to Private Sector
credit facilities.
Stock of credit to the private sector (LHS) Credit growth (RHS)
21,000 12
Owing to accommodative monetary policy, money
17,500 10
supply and private sector credit growth improved
markedly in 2018/19 relative to the preceding 14,000 8
Billions of TZS

Percent

year. Annual growth of extended broad money 10,500 6

supply (M3) picked up to 7.7 percent in June 7,000 4

2019 from 6.0 percent in June 2018 (Chart 1.1), 3,500 2

albeit lower than the target of 12.2 percent. The

0 0
lower than projected growth of money supply was
Sep-17

Dec-17

Mar-18

Sep-18

Dec-18

Mar-19
Jun-17

Jun-18

Jun-19

compensated by an increase in the velocity of

Source: Bank of Tanzania and banks
money circulation, associated with the enhanced Note: RHS denotes right-hand side; and LHS, denotes Left-hand scale.

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 Bank of Tanzania Annual Report 2018/19

Credit extended to agriculture, mining and Chart 1.3b: Share of Outstanding Credit by
quarrying, manufacturing and personal-related Banks to Major Economic
activities recorded strong growth compared with Activities
Percent
other sectors (Chart 1.3a). Most of the loans
2017/18 2018/19
extended to the private sector were absorbed
29.6
by personal economic activities and trade, which 27.3

altogether accounted for about 47.7 percent of 20.5

18.1
the credit outstanding (Chart 1.3b). Personal
loans are often used for small and medium-size 10.6 11.2
8.7
6.7
economic undertakings. 5.9 5.2
4.9 4.5
3.6 3.0
2.2 2.6

Trade

Manufacturing

Agriculture

communication

restaurants
Building and

Mining and
construction

Hotels and
Chart 1.3a: Annual Growth Rates of Banks’

Transport and
Personal

quarrying
Credit to Major Economic
Activities
Percent Source: Banks, and Bank of Tanzania computations

2017/18
Personal 50.5 Reflecting accommodative monetary policy and
Mining and quarrying 5.8 other measures including the introduction of
Building and construction 5.7
interbank cash market electronic trading platform
Transport and communication 4.9
to improve transparency and price discovery,
Hotels and restaurants 3.4
volatility in the money market interest rates was
Trade -2.0
relatively low. Overnight interbank cash market
Manufacturing -3.9
interest rate evolved around 3.55 percent in
Agriculture -5.2
2018/19 compared with 2.74 percent recorded
Other services -35.4
in the preceding year. As for Treasury bills, yields
increased by 87 basis points to 8.16 percent in
2018/19 2018/19, reflecting fiscal policy considerations.
Agriculture 40.6

Mining and quarrying 28.4 Deposit rates offered by banks and lending
Personal 17.4 rates were on a downward movement but with
Manufacturing 14.5 varying magnitude, partly reflecting the impact
Building and construction -0.1 of accommodative monetary policy measures
Trade -4.2 (Chart 1.4). Easing of lending rates by banks also
Transport and communication -4.5 signified a decline in credit risk, partly associated
Hotels and restaurants -11.2 with continued usage of credit information system
Other services -14.2 during credit appraisal and other measures
Source: Banks, and Bank of Tanzania computations implemented to enhance customers’ information.

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 Bank of Tanzania Annual Report 2018/19

Chart 1.4: Selected Banks’ Interest Rates 1.2 Exchange Rates

Percent

Overall time deposits rate 12 months deposit rate

The exchange rate was stable throughout the year,
Overall lending rate Short-term lending rate (up to 1 year)
except for a short episode of fast depreciation
20
in January and February 2019 driven by interest
18
rate hike in US market. On average, the shilling
16
depreciated against the US dollar by 1.7 percent
Percent

14
in 2018/19 compared with 2.0 percent in the
12
preceding year. In absolute terms, the shilling
10
traded at TZS 2,293.08 per US dollar compared
8
with TZS 2,254.41 per US dollar. The movement
6
2014/15 2015/16 2016/17 2017/18 2018/19 of the shilling against the US dollar was consistent
Source: Banks and Bank of Tanzania computations with inflation differentials between Tanzania and
its major trading partners. The stability of the
Monetary policy actions also enabled the Bank of shilling was largely explained by low inflation and
Tanzania to maintain the required level of gross sustained prudent monetary and fiscal policies.
official reserves sufficient to cover at least 4 The Bank of Tanzania participated in the inter-
months of imports of goods and services. Gross bank foreign exchange market solely for managing
official reserves amounted to USD 4,401.8 million liquidity and ensuring an orderly market. The Bank
at the end of June 2019, sufficient to cover 4.3 sold USD 167.7 million to banks in 2018/19, on
months of projected import of goods and services net basis, equivalent to 18.3 percent of the total
(Chart 1.5). However, the amount was lower than market turnover (Chart 1.6).
USD 5,483.9 million at the end of June 2018
partly explained by government foreign payments Chart 1.6: Inter-Bank Foreign Exchange
in favour of on-going public investment projects. Market Transactions
Meanwhile, stock of gross foreign assets of Total value of transactions (LHS)
Bank of Tanzania's net sales (+)/ net purchase (-) (LHS)
commercial banks increased by 35.7 percent to Weighted average exchange rate (RHS)
2,380 2,400
USD 1,119.6 million, from USD 825.2 million at the
1,880 2,200
end of June 2018.
Millions of USD

1,380 2,000
TZS/USD

880 1,800
Chart 1.5: Bank of Tanzania Gross Reserves
380 1,600
Gross official reserves (In millions of USD) Imports cover (Months)
-120 1,400
6.1
5.7
7,00 0.0 6.3

5.4 -620 1,200

6,00 0.0 5.0 5.3
2014/15 2015/16 2016/17 2017/18 2018/19
5,483.9
5,000.4 4.3 Source: Bank of Tanzania
Note: LHS denotes left-hand scale; and RHS, right-hand Scale
5,00 0.0 4.3

4,285.0 4,401.8
4,00 0.0
3,873.7 3.3

3,00 0.0 2.3

The trade-weighted exchange rates—nominal
2,00 0.0 1.3
effective exchange rate (NEER) and real effective
1,00 0.0 0.3
exchange rate (REER)—broadly appreciated in
- -0.7
2018/19, mainly on account of moderate inflation
2014/15 2015/16 2016/17 2017/18 2018/19 rate in the country relative to major trading
Source: Bank of Tanzania partners (Chart 1.7). The movement of REER was
consistent with its underlying drivers, implying
absence of misalignments that could warrant
policy intervention.

4
 Bank of Tanzania Annual Report 2018/19

Chart 1.7: Trade-Weighted Exchange rates

Movement
NER NEER REER
1.40

1.30

1.20

1.10
Index

1.00

0.90

0.80
Mar-17

Mar-18

Mar-19
Jun-16

Jun-17

Jun-18

Jun-19
Dec-16

Dec-17
Sep-16

Dec-18
Sep-17

Sep-18

Source: Bank of Tanzania

1.3 Inter-Bank Cash Market

Consistent with liquidity conditions among
banks, the inter-bank cash market (IBCM)
was characterised by relatively high volume
of transactions in 2018/19. IBCM transactions
almost doubled to TZS 12,205.7 billion in 2018/19
from the amount transacted in 2017/18, with
overnight placements accounting for 54.2 percent
of the total transactions (Chart 1.8).

Chart 1.8: Inter-bank Cash Market

Transactions
Value of interbank cash market transactions (LHS)
Value of overnight transactions (LHS)
Overall interbank cash market rate (RHS)
Overnight interbank cash market rate (RHS)
13,000 15

10,400 12
Billions of TZS

7,800 9
Percent

5,200 6

2,600 3

0 0
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Source: Bank of Tanzania

Note: LHS denotes left hand scale; and RHS, right hand scale

5
Bank of Tanzania Annual Report 2018/19

PART II

ECONOMIC PERFORMANCE

7
 Bank of Tanzania Annual Report 2018/19

1.0 Domestic Economic Developments

1.1 Output, Prices and Food Supply Box 1: GDP Rebasing Exercise

Aggregate Supply In 2019, the National Bureau of Statistics revised

the national accounts statistics for Tanzania
The Tanzania economy was among the fastest
Mainland using 2015 as base year instead of 2007.
growing economies in sub-Saharan Africa. Real
The rebasing was done to comply with the 2008
GDP grew by 7.0 percent in 2018, up from 6.8
System of National Accounts and other United
percent in 2017 (Chart 1.1a). Main drivers of growth
Nation’s revised classifications. The revision
were construction, agriculture, and transport and
or rebasing exercise, among others, aimed at
storage activities, altogether accounting for more
enhancing the quality of national accounts statistics
than half of the total growth (Chart 1.1b). High
to better portray the performance of economic
growth rates were recorded in construction, and
activities in the country and ensure international
transport and storage activities (Chart 1.1c).
comparability. It also aimed at capturing structural
changes that have been occurring in the economy
In nominal terms, GDP increased to TZS 129.4
in the recent past, updating both relative price
trillion from TZS 118.7 trillion, and income per
changes of various products over time and the
capita (average income earned per person)
list of products to take into account continuous
improved to TZS 2.5 million from TZS 2.3 million in
developments and innovations.
2017. Service related activities accounted for the
significant share of GDP at 37.1 percent, reflecting Source: National Bureau of Statistics
structural transformation of the economy (Chart
1.1d). The economy is expected to sustain growth
momentum in 2019, supported by investments, Chart 1.1a: Real GDP Growth
Percent
particularly fiscal outlays for public infrastructure
6.9 7.0
6.7 6.8
projects and private investment in various 6.2

economic activities including manufacturing

industries. In addition, growth is projected to be
facilitated by accommodative monetary policy,
improving business environment, and human
capital development through investment in
education and health.

2014 2015 2016 2017 2018

Source: National Bureau of Statistics

8
 Bank of Tanzania Annual Report 2018/19

Chart 1.1b: Contribution to GDP Growth by Chart 1.1d: Shares of GDP by Activities at
Activities at Constant 2015 Prices Current Prices
Percent Percent
2017
2017 2018
Construction 26.4
Agriculture, forestry and fishing 28.8
Agriculture, forestry and fishing 23.0
28.2
Construction 12.2
Manufacturing 9.9 13.0
Wholesale and retail trade; repairs 8.2 9.1
Wholesale and retail trade; repairs 9.1
Transport and storage 7.2
Administrative and support service activities 4.1 Manufacturing 7.7
8.1
Mining and quarrying 3.4 6.7
Transport and storage 6.5
Education 2.8
Real estate 2.0 Mining and quarrying 4.4
5.1
Human health and social work activities 1.7
Public administration and defence 4.2
Public administration and defence 1.7 4.0
Information and communication 1.6 Financial and insurance activities 4.0
3.7
Professional, scientific and technical activities 1.3
Real estate 2.8
Accommodation and food services 0.7 2.7
Electricity supply 0.1 Administrative and support service… 2.5
2.6
Financial and insurance activities -1.8
Education 2.4
2.4
2018 Information and communication 1.5
1.5
Construction 23.8 Human health and social work activities 1.4
1.4
Agriculture, forestry and fishing 19.7
Accommodation and food services 1.3
Transport and storage 12.3 1.3
Manufacturing 9.8
Wholesale and retail trade; repairs 7.7
Source: National Bureau of Statistics
Education 2.5
Information and communication 2.2
Administrative and support service activities
Public administration and defence
2.2
2.0
Agriculture
Real estate 1.9
Human health and social work activities 1.7 Agriculture, which comprises crops, livestock,
Accommodation and Food Services 1.1
Mining and quarrying 0.9 forestry, fishing and agricultural support services,
Professional, scientific and technical activities 0.9
Electricity supply 0.7 continued to perform well albeit growing at a
Financial and insurance activities -0.3
slower pace of 5.3 percent in 2018 compared with
Source: National Bureau of Statistics
5.9 percent in 2017. The performance was due
Chart 1.1c: Growth by Activities at Constant to good weather in most part of the country, bulk
2015 Prices procurement of fertilizers which reduced the cost
Percent and improved supply of farm inputs.
2017
Construction 15.1
Professional, scientific and technical activities 14.5
Administrative and support service activities
Arts, entertainment and recreation
10.8
9.9 Crops production sub-activity grew by 5.0 percent
Manufacturing 8.2
Human health and social work activities 7.6 compared with 6.4 percent in 2017. Production of
Education 7.3
GDP at market prices
Transport and storage
6.8
6.7
food crops was estimated at 16.4 million tonnes
Water supply; sewerage, waste management 6.4
Information and communication 6.2 in 2018/19 crop season, slightly lower than 16.9
Wholesale and retail trade; repairs 6.1
Agriculture, forestry and fishing
Mining and quarrying
5.9
5.3
million tonnes produced in 2017/18. Meanwhile,
Real estate
Accommodation and food services
4.4
3.1
production of traditional export crops depicted
Public administration and defence 2.4
Electricity supply 1.0 a mixed trend in 2018/19. Production of coffee,
Financial and insurance activities -2.8
cotton and tea increased, while that of cashew
Arts, entertainment and recreation
2018
13.7
nuts, tobacco and sisal declined (Table 1.1).
Construction
Transport and storage
12.9
11.8
The increase in production of coffee, cotton and
Professional, scientific and technical activities 9.9
Information and communication 9.1 tea was attributed to favourable weather and
Manufacturing 8.3
Human health and social work activities
Water supply; sewerage, waste management
8.1
7.4
price improvement. In addition, improved coffee
GDP at market prices
Education
7.0
6.6
production was attributed to high crop cycle, while
Wholesale and retail trade; repairs 5.8
Electricity supply 5.8 that of cotton relates to utilisation of improved
Administrative and support service activities 5.6
Agriculture, forestry and fishing
Accommodation and food services
5.3
5.2
seeds coupled with access to other inputs on
Real estate
Public administration and defence 3.1
4.4
credit. Meanwhile, production of tobacco, cashew
Mining and quarrying 1.5
Financial and insurance activities -0.5 nuts and sisal declined on account of low demand.
Source: National Bureau of Statistics

9
 Bank of Tanzania Annual Report 2018/19

Table 1.1: Production of Selected Major Cash In 2018, manufacturing2 sub-activity grew by 8.3
Crops percent compared with 8.2 percent in 2017 due to
‘000’ Tonnes
continued expansion in markets, particularly in the
2000/01 Peak production

2014/15
r
2015/16 2016/17 2017/18 2018/19
e
Percentage
change Year Tonnes EAC and SADC regions, on-going infrastructure
Coffee 42.0 59.9 48.3 48.3 66.6 37.9 2008/09 68.5 improvement, and stability in power supply.
Seed cotton 203.3 149.9 122.4 132.9 222.7 67.6 2005/06 374.7
Tea 36.0 32.6 27.0 34.0 37.2 9.4 2004/05 30.7 Manufacturing commodities with notable increase
Cashew nuts 197.9 155.2 264.9 313.8 225.1 -28.3 1973/74 145.0
Tobacco 105.9 87.0 60.7 85.7 55.0 -35.8 2011/12 126.6
include building materials—cement, metal
Sisal 40.3 41.8 35.6 43.5 32.1 -26.2 1964 230.0
products and paints, food and beverages, and
Source: Ministry of Agriculture, and crop boards
Note: r denotes revised data; and e, estimates wheat. The contribution of manufacturing activity
to GDP increased to 8.1 percent in 2018 from 7.7
Livestock sub-activity maintained a growth of 4.9 percent in 2017.
percent in 2018 as in 2017 and accounted for
7.6 percent of GDP growth. Number of livestock Mining and quarrying3 grew by 1.5 percent in 2018
sold in the registered markets, production of meat lower than 5.3 percent in 2017, largely on account
and milk products, and quantity of eggs sold of a decline in production of gold, gemstone,
increased in 2018 compared with the preceding salt, limestone and pozzolana, associated with
year. Specifically, the number of cattle sold rose government ban on export of unprocessed
by 6.7 percent to 30.3 million, goats by 6.2 percent mineral, mainly gemstone and salt. Production
to 18.8 million, and sheep by 3.9 percent to 5.3 of coal, diamonds and natural gas increased
million in 2018. in 2018. Despite slowdown in overall growth,
contribution of mining and quarrying activities to
Fishing sub-activity grew by 9.2 percent in 2018 GDP increased to 5.1 percent in 2018 from 4.4
compared with 8.4 percent in 2017, partly due to percent in 2017.
measures taken to curb illegal fishing. Forestry
activity expanded by 4.9 percent, higher than Coal production increased following improvement
4.8 percent in 2017 attributed to continued in domestic market due to Government ban
government efforts to oversee forestry activities on importation of coal. Meanwhile, production
coupled with high demand for wood and wood of natural gas, which is also a source of power,
products in construction. increased to 60,349.4 million standard cubic feet
in 2018/19 from 53,907.1 million standard cubic
Industry and Construction feet in 2017/18 due to high demand for electricity
Industry and construction activity which includes generation and other industrial uses. Noteworthy,
mining, quarrying, manufacturing, construction, gas utilized in power generation accounts for 64.4
electricity and gas supply, and water supply and percent of total gas produced during 2018/19,
sewage, grew by 9.3 percent compared with followed by industries at 10.6 percent.
10.6 percent in 2017. Growth in construction,
which contributed 26.4 percent to GDP growth, Electricity sub-activity that involves electricity
was 12.9 percent in 2018, reflecting growing generation, transmission and distribution, grew by
public investments notably construction of 5.8 percent in 2018 compared with 1.0 percent in
standard gauge railway, bridges, airports and 2017 largely on account of completion of Kinyerezi
roads, expansion of ports, as well as on-going II Power Plant. Electricity generated in 2018 was
rehabilitation of metre gauge railway. 7,307.6 million kWh compared with 7,010.4
2
It includes physical or chemical transformation of materials, substances, or
components into final or semi-processed goods.
3
Mining and quarrying includes activities of extraction of minerals occurring
natural as solids (coal and ores), liquids (petroleum) or gases (natural gas).

10
 Bank of Tanzania Annual Report 2018/19

million kWh in 2017 owing to increase in thermal from TZS 107,668.3 billion. Final consumption
power generation, particularly from gas-powered expenditure expanded by 5.7 percent, in real
turbines. Thermal power generation was 3,340.6 terms, and accounted for 69.7 percent of GNDI
million kWh, of which 99.1 percent was from gas- and 68.2 percent of GDP in nominal terms. Savings
powered turbines (Table 1.2). ratio was 29.6 percent of GDP, while investment
ratio was 38.9 percent of GDP. Resource balance
Table 1.2: Electricity Generation and Imports
gap, which is the difference between saving and
‘000’ kWh
Source 2014 2015 2016 2017 2018
investment, widened to 9.4 percent of GDP from
Hydropower 2,590,696.8 2,107,622.0 2,355,632.5 2,326,541.0 2,204,758.6 5.0 percent in 2017 (Table 1.3).
Thermal power 1,189,806.7 1,523,847.4 4,063,489.4 2,910,102.0 3,340,663.6
Diesel-grid 138,670.0 802,509.5 3,441.7 148,759.0 30,765.0
Gas
Isolated units
1,051,136.7
190,449.9
721,337.9
197,840.0
4,060,047.7
190,852.2
2,761,343.0
189,141.0
3,309,898.6
179,940.3
Table 1.3: Gross National Income at Current
Hydropower 17,472.0 Market Prices
Diesel 102,882.1 102,067.5 78,901.4 93,456.0 88,507.2
Billions of TZS
Gas (Mtwara and Somamga) 87,567.8 95,772.6 93,984.0 95,685.0 91,433.1
P
Biomass 494.8 Nominal 2014 2015 2016 2017 2018
Integrated power projects 2,152,477.2 2,552,956.3 1,844,865.7 1,584,656.5 1,582,259.9
Gross national income (GNI) 75,318.2 85,046.8 97,344.3 106,772.3 117,225.5
Biomass 9,051.9 14,512.9 29,093.4 22,840.5 14,594.4
GDP (at basic price) 76,193.2 86,484.7 99,423.7 108,956.8 119,194.6
Diesel 646,850.8 961,662.1 170,609.0 52,427.7 49,732.4
Hydropower 22,900.1 16,654.3 41,559.0 44,376.2 49,732.4 Net primary income from ROW -875.0 -1,438.0 -2,079.3 -2,184.5 -1,969.2

Gas 1,473,674.4 1,560,127.0 1,603,604.3 1,465,012.1 1,468,200.8 Primary income receivable 195.6 218.9 214.5 279.4 353.0
Imports 59,291.0 71,317.3 101,537.9 105,793.0 117,530.8 Less primary income payable 1,070.6 1,656.9 2,293.8 2,463.8 2,322.2
Uganda 54,109.1 62,080.0 72,809.2 79,317.0 87,954.4
Gross national disposable income (GNDI) 76,106.9 85,999.6 98,174.8 107,668.3 118,286.1
Zambia 3,424.7 7,108.3 8,033.8 2,456.0 29,153.4
Final consumption 62,297.8 69,619.6 74,761.7 81,577.2 88,207.3
Kenya 1,757.3 2,129.0 20,694.9 24,020.0 423.0
Government final consumption 8,151.1 9,366.3 9,824.7 10,097.4 10,467.8
Total 6,182,721.7 6,453,583.0 8,556,377.7 7,116,233.5 7,425,153.2
Household final consumption 53,954.5 60,047.1 64,699.5 71,211.5 77,443.0
Source: Tanzania National Electricity Supply Company
Non-profit institutions serving household 192.2 206.1 237.5 268.3 296.5

Savings 10,727.8 12,487.2 18,679.4 18,799.3 20,987.7

Services Gross capital formation (Investment) 31,103.5 30,907.6 34,865.3 40,427.4 50,383.1

Fixed capital formation 27,399.8 30,070.2 35,492.8 42,141.9 50,316.2

Value added in services expanded by 6.3 percent Changes in valuables 756.5 903.0 1,105.4 1,006.2 1,215.1

Changes in inventories 2,947.1 -65.6 -1,732.9 -2,720.7 -1,148.2

in 2018 in real terms compared with 5.3 percent
Saving - Investment gap -20,375.7 -18,420.4 -16,185.9 -21,628.1 -29,395.4

in 2017. Its share was 37.0 percent of GDP in GDP (at market price) 82,603.4 94,349.3 108,362.3 118,744.5 129,364.4

Memorandum:
nominal terms. Transport and storage sub-activity
Gross capital formation to GDP 37.7 32.8 32.2 34.0 38.9

grew by 11.8 percent compared with 6.7 percent Savings to GDP 23.2 23.8 28.7 29.0 29.6

Consumption to GDP 75.4 73.8 69.0 68.7 68.2

in 2017, attributed to increase in volume of transit
Saving-Investment to GDP -14.5 -8.9 -3.5 -5.0 -9.4

cargo following improved efficiency at Dar es Source: National Bureau of Statistics

Note: p denotes provisional data
Salaam and Tanga ports, as well as increase in
the number of air passengers. According to the
Chart 1.2: Savings and Investment Ratios
Tanzania Civil Aviation Authority, the number of
Percent
air passengers rose to 5.8 million in 2018 from Gross capital formation (Investment) to GDP Savings to GDP
5.1 million in 2017. This development was due
45
to increase in international flights and improved
40
operations of Air Tanzania Company Limited and
35
other local airlines.
30

Gross National Income 25

20
Gross national income (GNI) was TZS 117,225.5
billion in 2018, up from TZS 106,772.3 billion in the 15

preceding year. Gross national disposable income 10

(GNDI)4 amounted to TZS 118,286.1 billion 5

2014 2015 2016 2017 2018
4
Comprises of compensation of employees, property income, current transfers,
and operating surplus. Source: National Bureau of Statistics

11
 Bank of Tanzania Annual Report 2018/19

Inflation ending June 2019 from 92.4 in the year ending

June 2018 (Table 1.4 and Chart 1.4). Much of
Low level of inflation was sustained in 2018/19,
the increase was recorded in producer prices for
mostly driven by adequate food supply, stability
manufacture of paper and paper products that rose
of exchange rate, moderate oil prices in the world
by 47.8 percent, manufactured of basic metals by
market, and prudent monetary and fiscal policies.
20.7 percent and manufacture of chemical and
Headline (overall) inflation averaged 3.2 percent
chemical products 16.5 percent. During the year
in 2018/19 compared with 4.3 percent in the
producer price for utility declined by 11.4 percent.
preceding year. The rate was below the country
medium-term target of 5.0 percent, and East
Table 1.4: Producer Price Index
African Community (EAC) and Southern African
Description 2014/15 2015/16 2016/17 2017/18 2018/19
Development Community (SADC) convergence
Mining and quarrying 98.4 144.9 101.0 115.5 116.3
benchmarks of not more than 8.0 percent and Manufacturing 79.5 82.0 84.5 87.1 97.0

between 3.0 and 7.0 percent, respectively. Food Manufacturing of food products 70.4 72.2 83.4 85.4 98.3

Manufacturing of paper and paper products 58.3 57.4 63.2 63.0 93.1
inflation averaged 1.4 percent, much lower than
Manufacturing of chemicals and chemical products 70.2 73.8 79.9 82.8 96.4
6.4 percent in the preceding year, while core Manufacturing of basic metals 70.2 67.3 63.1 78.1 94.3

inflation—inflation that excludes food and energy Utility 87.5 112.4 118.2 117.8 104.3

prices—averaged 2.8 percent compared with 1.6 Total manufacturing 81.3 88.4 89.8 92.4 100.7

Source: National Bureau of Statistics

percent. Inflation is projected to remain low and Note: Utilities includes electric power generation, transmission and distribution
and water collection, treatment and supply.
below the medium-term target of 5.0 percent in
2019/20, supported by anticipated adequate
Chart 1.4: Producer Price Index
food supply in the country, stability of energy
Total PPI Manufacturing PPI
prices, and prudent monetary and fiscal policies. 120.0

Possible risks to the projected low inflation, such

100.0
as increase in oil prices in the global market are
expected to be low due to increased use of natural 80.0

gas. 60.0

40.0
Chart 1.3: Headline Inflation and its
components 20.0
Percent
Headline Food Non-food Non-food non-energy (Core) 0.0
2014/15 2015/16 2016/17 2017/18 2018/19
14

12 Source: National Bureau of Statistics

Note: PPI denotes producer price index
10

8
Food Supply
6

4
During 2018/19, food production was estimated
2 at 16.4 million tonnes, 2.6 million tonnes above
0 the national food requirement of 13.8 million
Mar-17

Mar-18

Mar-19
Jun-16

Jun-17

Jun-18

Jun-19
Dec-16
Sep-16

Dec-17
Sep-17

Dec-18
Sep-18

tonnes. This was equivalent to a food self-

Source: National Bureau of Statistics and Bank of Tanzania computations
sufficiency ratio (SSR) of 119.0 percent, indicating
adequate food supply in the country. The food
Producer Price Index produced comprised of cereals amounting to 9.0
Producer Prices Index (PPI) which measures the million tonnes and non-cereals 7.4 million tonnes
average prices received by domestic producers (Table 1.5). Table 1.6 presents food production in
for their output increased to 100.7 in the year 2018/19 against 2019/20 food requirement.

12
 Bank of Tanzania Annual Report 2018/19

Table 1.5: Food Production Table 1.7: Food Stocks Held by NFRA
Tonnes Tonnes
p
2011/12
2014/15 2015/16 2016/17 2017/18 2018/19 2015 2016 2017 2018 2019
Cereals Production 8,899,019 9,457,108 9,388,772 9,537,858 9,007,909
January 459,561.0 125,668.0 86,833.5 91,947.0 93,037.2
Requirement 8,190,564 8,355,767 8,457,558 8,627,272 8,754,119
February 454,592.0 88,414.0 86,444.0 91,312.7 85,524.5
Gap/surplus 708,455 1,101,341 931,214 910,586 253,790

SSR 108.6 113.2 111.0 110.6 102.9

March 452,054.0 68,727.0 86,443.8 83,650.3 78,336.3
April 433,547.0 64,825.0 86,278.0 73,467.7 68,747.8
Non-cereals Production 6,609,822 6,715,733 6,512,092 7,354,118 7,400,400

Requirement 4,755,530 4,803,560 4,842,476 4,942,014 5,088,417

May 406,846.0 63,341.0 74,826.0 68,893.4 68,057.7

Gap/surplus 1,854,292 1,912,174 1,669,617 2,412,104 2,311,984 June 353,702.0 61,837.5 70,393.0 63,843.9 67,335.9
SSR 139.0 139.8 134.5 148.8 145.4 July 282,401.0 49,632.0 68,697.0 62,288.0
Total food Production 15,528,820 16,172,841 15,900,864 16,891,974 16,408,309 August 268,514.9 59,832.0 78,434.0 62,317.3
Requirement 12,946,123 13,159,326 13,300,034 13,569,286 13,842,536 September 265,046.4 86,545.0 85,403.0 78,224.0
Gap/surplus 2,582,697 3,013,515 2,600,831 3,322,688 2,565,774
October 253,655.2 90,905.0 89,248.0 87,435.0
SSR 120.0 123.0 120.0 124.5 119.0
November 238,134.0 90,900.0 93,353.7 92,402.0
Source: Ministry of Agriculture
Note: SSR stands for self-sufficiency ratio; and p denotes provisional data December 180,746.0 89,691.8 92,074.0 95,534.1
Source: National Food Reserve Agency

Table 1.6: Food Production in 2018/19 and

Requirement for 2019/20 Prices of Food and Cash Crops
Surghum/ Reflecting adequacy of food in many parts of the
Cereals Maize Millet Rice Wheat Total
country, wholesale prices of all major food crops
Production 5,817,508 1,117,839 2,009,174 63,388 9,007,909

Requirement 5,513,469 1,974,778 999,543 266,329 8,754,119

were lower in 2018/19 than in the preceding
Gap/surplus 304,040 -856,939 1,009,631 -202,941 253,791 year, save for potatoes (Table 1.8). Regarding
SSR 105.5 56.6 201.0 23.8 102.9 cash crops, average producer prices of all major
As percentage of total 64.6 12.4 22.3 0.7 100.0
traditional cash crops also declined, partly
Non-cereals Pulses Banana Cassava Potatoes Total
attributed to low price in the world market (Table
Production 1,880,438 1,135,645 2,739,318 1,644,999 7,400,400
1.9).
Requirement 816,659 936,359 2,337,839 997,559 5,088,416

Gap/surplus 1,063,779 199,286 401,479 647,440 2,311,984

Table 1.8: Average Wholesale Prices of Food
SSR 230.0 121.0 117.0 165.0 145.0

As percentage of total 25.4 15.3 37.0 22.2 100.0

Crops
TZS per 100Kg
Source: Ministry of Agriculture
Note: SSR stands for self-sufficiency ratio Percentage
change
Crop 2014/15 2015/16 2016/17 2017/18 2018/19 2018/19

Maize 41,685.4 59,777.8 80,861.5 51,760.6 47,745.0 -7.8

The stock of food5 held by the National Food
Rice 140,948.7 168,320.5 158,726.0 182,986.8 158,742.4 -13.2
Reserve Agency (NFRA) remained virtually Beans 146,925.6 161,686.7 168,453.0 170,446.8 160,143.2 -6.0
unchanged throughout the year, ranging between Sorghum 63,558.9 83,240.3 104,310.1 85,894.0 75,527.5 -12.1

62,288.0 tonnes and 95,534.1 tonnes. The stock Finger millet 110,639.4 112,326.6 124,022.9 146,681.0 134,706.5 -8.2

of food held by the NFRA at the end of June Round potatoes 70,650.3 80,599.1 81,355.0 70,648.2 77,544.4 9.8

Source: Ministry of Industry and Trade

2019 was 67,335.9 tonnes, higher than 63,843.9
tonnes at the end of June 2018 (Table 1.7).
Table 1.9: Producer Prices of Cash Crops
During 2018/19, the NFRA sold 42,068 tonnes TZS/Kg
of maize to the Prisons Department, World Food Coffee
Seed Green Raw Tobacco
Programme, private traders, and the Disaster Period Arabica Robusta cotton tea cashew VFC Sisal* UG

2014/15 4,000 1,200 750 220 1,820 3,663 1,720

Relief Coordination Unit of the Prime Minister’s
2015/16 3,000 1,100 800 232 2,000 4,548 1,800
Office, and purchased 47,115 tonnes of maize 2016/17 4,000 1,600 1,000 240 3,500 4,663 1,800

from farmers in the country. 2017/18 3,000 1,500 1,200 240 3,797 3,931 1,750

2018/19 2,500 1,000 1,100 n.a 3,300 n.a 1,700

Source: Ministry of Agriculture and Crop Boards

Note: VFC denotes Virginia flue cured; DFC, dark fire Cured; and UG, under
5
Comprised of only maize. grade. *Prices of sisal UG are in USD per tonne

13
 Bank of Tanzania Annual Report 2018/19

1.2 Financial Markets for private sector credit growth. Consequently,

the tender size was reduced to an average of
In order to improve the functioning of the financial
TZS 141.0 billion per auction in 2018/19 from TZS
markets and foster its role in facilitating economic
169.0 billion in 2017/18. The value of tendered
growth, several activities were implemented. In the
amount was TZS 4,427.6 billion, of which TZS
money markets, the Bank of Tanzania introduced
3,372.6 billion were successful. Treasury bills
the interbank cash market electronic trading
worth TZS 3,504.9 billion matured, which implies
platform in March 2019, to improve the reflection
liquidity was not crowded out through Treasury
of liquidity condition amongst banks, thereby
bills operations. Yields across the maturity
enhancing transparency and price discovery in
spectrum eased relative to the preceding year,
the market. The Bank also finalized draft Country
except for 364-day maturity, which edged up
Annex of Global Master Repurchase Agreement
slightly (Chart 1.5). During 2018/19, there was
(GMRA) 2011 version to improve the repo market.
virtually no secondary trading of Treasury bills
In the capital markets, the Government introduced
as banks often hold them to maturity as part of
a 20-year Treasury bond in September 2018 to
liquidity instruments.
lengthen maturity profile of Treasury bonds and
elongate the yield curve. In addition, normal
operations of the financial markets continued
through issuance and trading of government
securities, corporate bonds, and equity (shares).

Government Debt Securities Market

The government debt securities, comprising
Treasury bills and bonds, continued to be
issued by the Bank of Tanzania in the primary
market through auctions and later on traded
in the secondary market through the Dar es
Salaam Stock Exchange and over-the-counter.
In 2018/19, the securities were issued primarily
for government fiscal operations and financial
market development, unlike in the previous years
during which part of the securities were issued for
monetary policy operations.

Treasury bills6 market was active, characterized

by investors’ appetite for securities of longer
maturity, particularly the 364-day Treasury bill.
Amount offered for sale in the primary market was
TZS 3,683.0 billion, lower than TZS 4,373.2 billion
in 2017/18, owing to improved government fiscal
position, partly as result of increase in revenue
collection and accommodative monetary policy
to address demand for liquidity in the economy
6
Treasury bills are money market instruments mostly held by banks (more than
97 percent), which can be traded in the secondary market over the counter or
through the Bank of Tanzania re-discount window.

14
 Bank of Tanzania Annual Report 2018/19

Chart 1.5: Developments in Treasury Bills The government bond primary market performed
Market more satisfactorily in 2018/19 than in the previous
Offer (LHS) Tender (LHS)
35 -days
Successful bids (LHS) Yield (RHS)
year. Bank of Tanzania, on behalf of the Government,
132 12
conducted Treasury bonds auctions of 2-, 5-,
110 10
7-, 10-, 15- and 20-year maturities in separate
Billions of TZS

88 8
occasions for government fiscal operations. In

Percent
66 6
total, Treasury bonds worth TZS 2,348.6 billion
44 4
were offered, consistent with the government
22 2

issuance plan. On average, the auctions were

0 0
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
under-subscribed across all maturities, except
Offer (LHS) Tender (LHS)
91 -days
Successful bids (LHS) Yield (RHS)
for the 20-year bond (Chart 1.6). Bids received
960 18
amounted to TZS 1,508.2 billion, but successful
800 15
bids were TZS 1,119.2 billion.
640 12
Billions of TZS

Percent

480 9
Secondary market trading of Treasury bonds
320 6
improved, reinforced by the introduction of 20-
160 3
year bond and increased public awareness on
0 0
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 trading of securities. Bonds traded increased by
182 -days
7.0 percent to TZS 629.9 billion in 2018/19 from
Offer (LHS) Tender (LHS) Successful bids (LHS) Yield (RHS)
the preceding year. The 20-year bond was the
4,410 18
most traded, accounting for 34.9 percent of the
3,675 15
total transactions, followed by 15-year bond at
Billions of TZS

2,940 12
Percent

2,205 9
25.5 percent. The 2-year bond, which is mostly
1,470 6
preferred by banks as collateral for loans in the
735 3 inter-bank cash market, was the least traded,
0
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
0 representing 0.3 percent of the total transactions.

364 -days

Offer (LHS) Tender (LHS) Successful bids (LHS) Yield (RHS) Chart 1.6: Treasury Bonds Performance
4,410 18
2-year Treasury bond
3,675 15 Offer (LHS) Tender (LHS) Successful bids (LHS) Yield (RHS)

1,250 20
Billions of TZS

2,940 12
Percent

2,205 9 1,000 16
Billions of TZS

1,470 6 750 12
Percent

735 3
500 8

0 0
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 250 4

0 0
Overall Treasury Bills
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
Offer (LHS) Tender (LHS) Successful bids (LHS) Yield (RHS)
7,500 16
5-year Treasury bond
Offer (LHS) Tender (LHS) Successful bids (LHS) Yield (RHS)
6,000 13 1,250 20
Billions of TZS

4,500 10
Percent

1,000 16

3,000 7
Billions of TZS

750 12
Percent

1,500 4 500 8

0 1 250 4
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Source: Bank of Tanzania 0 0

Note: LHS denotes left hand scale; and RHS, right hand scale 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

15
 Bank of Tanzania Annual Report 2018/19

7-year Treasury bond Corporate Bond and Equity Markets

Offer (LHS) Tender (LHS) Successful bids (LHS) Yield (RHS)

1,250 20
During 2018/19, corporate bonds worth TZS
1,000 16 1,007.1 million were traded at the Dar es Salaam
Stock Exchange (DSE), higher than TZS 728.0
Billions of TZS

750 12

Percent
500 8
million in the preceding year. The change was
250 4
on account of local investors’ higher appetite
for NMB bank and EXIM bank bonds attributed
0 0
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
to their attractive yield to maturity. In the equity
10 -year Treasury bond market, total turnover of shares traded at the DSE
1,250
Offer (LHS) Tender (LHS) Successful bids (LHS) Yield (RHS)
20
was TZS 134.4 billion compared with turnover of
TZS 461.9 billion in 2017/18. The decrease was
1,000 16

attributed to both external and domestic market

Billions of TZS

750 12
factors.
Percent

500 8

250 4 1.3 Public Finance

0
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
0
Government Budgetary Operations
15 -year Treasury bond
Bank of Tanzania, being the banker and fiscal
Offer (LHS) Tender (LHS) Successful bids (LHS) Yield (RHS) agent of the Government, kept on supporting
1,250 20
fiscal operations. Guided by the Second Five Year
1,000 16
Development Plan (FYDP II), 2016/17 – 2020/21,
fiscal operations in 2018/19 focused on nurturing
Billions of TZS

750 12
Percent

500 8 industrialization for economic transfromation

250 4 and human development. In order to finance
0 0
fiscal operations, including priority projects, the
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
Government implemented measures to strengthen
20-year Treasury bond tax administration and compliance with focus on
1,250
Offer (LHS) Tender (LHS) Successful bids (LHS) Yield (RHS)
20
widening tax base, and strengthen management
of existing revenue sources especially by
1,000 16

intensifying use of electronic collection systems

Billions of TZS

750 12
and other administrative measures. Also, the
Percent

500 8
Government established Treasury Single Account
250 4 (TSA) to ensure effective control and management
0 0 of government resources.
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Total Treasury bonds in billions of TZS Revenue and Grants

Offer (LHS) Tender (LHS) Successful bids (LHS)

Domestic revenue realized by the Government in

4,962.2

2018/19 amounted to TZS 18,527.3 billion, higher

3,671.7

than the amount collected in 2017/18 by 3.2

2,841.6

2,571.0
2,529.3

2,348.6

percent and was equivalent to 13.8 percent of GDP.

1,995.4
1,802.3

1,723.0

1,508.2
1,487.4

1,428.0
1,418.0

Out of total revenue, 96.4 percent was collected

1,134.5

1,119.2
901.3
887.3

751.8

by the central government and the balance by the

2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 local government authorities. Tax revenue, which
Source: Bank of Tanzania accounted for 86.1 percent of central government
Note: LHS denotes left hand scale; and RHS, right hand scale

16
 Bank of Tanzania Annual Report 2018/19

revenue collections, amounted to TZS 15,387.3 Chart 1.8: Government Expenditure

billion. This amount was below the annual target Billions of TZS
2017/18 2018/19p
by 13.9 percent and equivalent to 11.4 percent of

6,658.5

6,496.2
6,327.7
the GDP. The underperformance in tax collections

5,397.0
was largely associated with challenges of taxing

4,744.1
4,534.3
the informal sector, underutilization of electronic
fiscal devices (EFD) and smuggling activities

2,408.7

2,218.7
1,990.3

1,958.0
along the coast of Indian Ocean. Non-tax revenue
amounted to TZS 2,408.9 billion, above the annual
target by 8.3 percent and was equivalent to 1.8
Wages and Interest costs Other recurrent Development Development
percent of GDP. salaries expenditure expenditure - expenditure -
locally financed foreign financed

Source: Ministry of Finance and Planning

During the year, external grants amounted to Note: p denotes provisional data

TZS 461.2 billion, of which TZS 285.3 billion was

project grants and TZS 175.9 billion basket funds. Financing
External grants received in 2018/19 were equal to Government budget operations in 2018/19
0.3 percent of GDP (Chart 1.7). realized an overall deficit of TZS 4,229.0 billion,
which was financed through foreign and domestic
Chart 1.7: Government Resources borrowing of TZS 1,191.8 billion and TZS 3,037.2
Billions of TZS
billion on net basis, respectively. The deficit was
2017/18 2018/19p
equivalent to 3.1 percent of GDP, slightly below
5,668.2
5,488.9

5,157.1

the target of 3.2 percent.

5,072.4

3,709.8
3,430.9

Debt Management
2,480.9
2,311.6

The national debt remained sustainable, with all

1,014.9

sustainability ratios being below international

930.6
936.9

461.2

thresholds. Debt stock—comprising external7

and domestic debt—amounted to USD 28,408.8
Taxes on Income taxes Taxes on local Other taxes Non-tax Grants
imports goods and
services
revenue million at the end of June 2019, a 5.3 percent
Source: Ministry of Finance and Planning increase from the end of June 2018. An increase of
Note: p denotes provisional data
debt resulted from loans disbursements to finance
major development projects. Out of the debt
Expenditure
stock, USD 21,917.0 million was external debt
During 2018/19, government expenditure and USD 6,491.8 million domestic debt. Public
amounted to TZS 22,265.4 billion, of which TZS debt which increased by 3.2 percent, remained
13,811.2 billion was recurrent expenditure and dominant, accounting for 81.7 percent of the total
TZS 8,454.2 billion expenditure on development debt stock and was equivalent to 40.1 percent of
projects. Out of the resources spent on GDP (Chart 1.9).
development projects, 76.8 percent was from
domestic sources (Chart 1.8). Govenment
expenditure was equivalent to 16.6 percent of
GDP.

7
Disbursed outstanding debt and interest arrears

17
 Bank of Tanzania Annual Report 2018/19

Chart 1.9: Developments in Public Debt sustainability indicators and their thresholds are
Public domestic debt (Millions of USD) presented in (Table 1.11).
Public external debt (Millions of USD)
Public debt to GDP (Percent)

41.0 41.3
42
24000 38.6
40.0 40.1
Table 1.11: Public External Debt Sustainability
6,491.8
Indicators
6,468.0 36
18000
5,987.8 Percent
4,607.2
3,808.6 Public external DSA Threshold 2018/19 2019/20 2020/21 2021/22
30
12000
PV of debt-to-GDP ratio 55.0 15.9 15.0 14.4 13.6

16,035.2 16,728.7 PV of debt-to-exports ratio 240.0 112.4 105.9 101.4 95.8

14,011.9 14,874.7
6000 13,092.3 24
Debt service-to-exports ratio 23.0 15.0 12.6 10.7 10.4

Debt service-to-revenue ratio 22.0 15.0 12.3 10.4 10.4

0 18
2014/15 2015/16 2016/17 2017/18 2018/19 Source: Ministry of Finance and Planning, Tanzania National Debt Sustainability
Source: Ministry of Finance and Planning, and Bank of Tanzania Analysis, December 2018
Note: DSA denotes debt sustainability analysis; and PV, present value

External Debt
The debt stock increased across all creditor
External debt, comprising of public and private categories. Debt owed to multilateral institutions
sector debt, amounted to USD 21,917.0 million remained dominant accounting for 45.6 percent
at the end of June 2019 compared with USD of the external debt stock, followed by debt from
20,503.0 million in the corresponding period of commercial creditors (Table 1.12).
2018. The increase was mainly on account of
disbursements and appreciation of the US dollar Table 1.12: External Debt by Creditor Category
against other currencies in which the debt is Millions of USD
P
Jun-17 Jun-18 Jun-19
denominated. Central government debt, which Creditor category Amount Share (%) Amount Share (%) Amount Share (%)

accounted for the largest share of the external Multilateral 8,726.0 46.8 9,538.6 46.5 9,990.3 45.6
DOD 8,711.1 46.7 9,509.2 46.4 9,965.1 45.5
debt stock increased by 5.1 percent, year-on- Interest arrears 14.9 0.1 29.4 0.1 25.2 0.1

year to USD 16,624.6 million at the end of June Bilateral 1,940.7 10.4 1,822.6 8.9 1,957.1 8.9
DOD 1,155.9 6.2 981.7 4.8 1,055.7 4.8
2019 (Table 1.10). Interest arrears 784.8 4.2 840.9 4.1 901.4 4.1
Commercial 6,245.5 33.5 6,858.4 33.5 7,457.7 34.0
DOD 5,879.8 31.5 6,498.5 31.7 6,921.5 31.6

Table 1.10: External Debt Stock by Borrower Interest arrears 365.7 2.0 359.9 1.8 536.2 2.4
Export credit 1,739.0 9.3 2,283.4 11.1 2,511.9 11.5
Category DOD 1,504.4 8.1 1,775.7 8.7 2,083.0 9.5
Millions of USD Interest arrears 234.6 1.3 507.7 2.5 428.9 2.0
P External debt stock 18,651.1 100.0 20,503.0 100.0 21,917.0 100.0
Jun-17 Jun-18 Jun-19

Borrower Amount Share (%) Amount Share (%) Amount Share (%) Source: Ministry of Finance and Planning, and Bank of Tanzania
Note: DOD denotes disbursed outstanding debt; and p, provisional data
Central government 14,686.4 78.7 15,823.5 77.2 16,624.6 75.9
DOD 13,901.6 74.5 14,978.8 73.1 15,723.2 71.7
Interest arrears 784.8 4.2 844.7 4.1 901.4 4.1
Private sector 3,654.4 19.6 4,467.8 21.8 5,188.3 23.7
External debt disbursed during 2018/19
DOD 3,067.4 16.4 3,605.9 17.6 4,207.1 19.2 amounted to USD 1,469.5 million, lower than
Interest arrears 587.0 3.1 861.9 4.2 981.2 4.5
Public corporations 310.3 1.7 211.7 1.0 104.1 0.5 USD 1,599.3 million in the preceding year. Out
DOD 282.2 1.5 180.4 0.9 95.0 0.4
of total disbursements, USD 1,351.1 million was
Interest arrears 28.1 0.2 31.3 0.2 9.1 0.0
External debt stock 18,651.1 100.0 20,503.0 100.0 21,917.0 100.0 received by the Government, slightly lower than
Source: Ministry of Finance and Planning, and Bank of Tanzania USD 1,394.7 million received in the preceding
Note: DOD denotes disbursed outstanding debt; and p, provisional data
year. External debt service amounted to USD
The debt sustainability analysis conducted by the 990.5 million, of which USD 693.2 million was
Ministry of Finance and Planning in December principal repayments and the balance was interest
2018 shows that all public and publicly guaranteed payments. External debt service was equivalent
debt indicators were below the thresholds, to 11.6 percent of export of goods and services
implying low risk of debt distress. Selected debt against the threshold of 23.0 percent.

18
 Bank of Tanzania Annual Report 2018/19

Domestic Debt Chart 1.11: Domestic Debt Stock

Billions of TZS
During 2018/19, the government planned to issue 14,732.1 14,863.1

securities worth TZS 6,521.2 billion at face value. 13,353.7

The amount was equivalent to TZS 5,833.7 billion 11,244.9

in cost value, of which TZS 4,600.0 billion was for

8,099.5
rolling over maturing obligations and TZS 1,233.7
billion for financing. Treasury bills and bonds
issued for government budgetary operations
amounted to TZS 4,322.4 billion, of which 71.1
percent was Treasury bills (Chart 1.10). Jun-15 Jun-16 Jun-17 Jun-18 Jun-19

Source: Ministry of Finance and Planning, and Bank of Tanzania

Chart 1.10: Domestic Debt Issued During

2018/19 Table 1.13: Domestic Debt by Instruments
Billions of TZS
Billions of TZS
T-Bills T-Bonds
Jun-17 Jun-18 Jun-19

Instrument Amount Share (%) Amount Share (%) Amount Share (%)

142.6 144.4 Government securities 11,770.5 88.3 12,776.4 86.7 13,603.1 91.5
87.6 179.6
96.8 139.1 Treasury bills 3,633.3 27.2 2,659.0 18.0 3,075.0 20.7
Government stocks 257.1 1.9 257.1 1.7 252.7 1.7
113.3 66.2 91.9
101.1 Government bonds 7,880.0 59.1 9,860.3 66.9 10,275.3 69.1
49.6
Tax certificates 0.1 0.0 0.1 0.0 0.1 0.0

330.0 35.3 Non-securitized debt 1,564.9 11.7 1,955.7 13.3 1,260.0 8.5
303.0 311.3 313.9
279.4 274.2 Other liabilities* 18.4 0.1 18.4 0.1 18.4 0.1
243.8 230.2
211.7 217.9 211.8
Overdraft 1,546.6 11.6 1,937.4 13.2 1,241.7 8.4
147.9
Domestic debt stock
(excluding liquidity papers) 13,335.4 100.0 14,732.2 100.0 14,863.1 100.0
Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19
Source: Ministry of Finance and Planning, and Bank of Tanzania
Note: * includes NMB bank Plc standard loan and duty draw back
Source: Ministry of Finance and Planning, and Bank of Tanzania

The stock of domestic debt at the end of June Banks remained major creditors to the
2019 was TZS 14,863.1 billion, a TZS 131.0 Government, accounting for 35.9 percent of
billion increase from the stock recorded at the domestic debt stock at the end of June 2019.
end of June 2018 (Chart 1.11). The composition Banks and pension funds altogether held 61.9
of domestic debt by maturity was in line with percent of domestic debt (Table 1.14).
the medium-term debt management strategy,
Table 1.14: Domestic Debt by creditor
which aims at mitigating risks by lengthening the
Billions of TZS
maturity of the debt portfolio. Treasury bonds and Jun-17 Jun-18 Jun-19

stocks remained dominant, altogether accounting Creditor Amount Share (%) Amount Share (%) Amount Share (%)

Commercial banks 5,121.5 38.4 5,297.2 36.0 5,340.1 35.9

for 70.8 percent of domestic debt stock compared Pension funds 3,376.4 25.3 3,641.2 24.7 3,868.5 26.0

with 68.7 percent at the end of June 2018 (Table Bank of Tanzania 2,986.4 22.4 3,272.6 22.2 2,529.9 17.0
Others 595.5 4.5 1,074.4 7.3 1,476.5 9.9
1.13). Insurance 1,093.2 8.2 1,181.8 8.0 1,363.9 9.2
BOT's special funds 162.4 1.2 265.0 1.8 284.4 1.9

Domestic debt stock

(excluding liquidity papers) 13,335.4 100.0 14,732.2 100.0 14,863.1 100.0

Source: Ministry of Finance and Planning, and Bank of Tanzania

In 2018/19, domestic debt that matured, excluding

overdraft, was TZS 4,755.4 billion, out of which
principal amounting to TZS 3,473.6 billion was
rolled over, and the balance was interest payment.

19
 Bank of Tanzania Annual Report 2018/19

2.0 External Sector

Tanzania’s external sector continued to perform Table 2.1: Current Account

satisfactorily, amidst slow global growth resulting Millions of USD
r P
2014/15 2015/16 2016/17 2017/18 2018/19
from a variety of factors, including heightened
Balance on good account -5,321.3 -3,908.4 -3,046.0 -2,974.2 -4,255.5
trade restrictions and tariffs between US and Exports 5,338.1 5,009.6 4,661.2 4,691.9 4,496.1
Traditional 726.6 798.6 935.9 1,125.3 517.6
China, Brexit uncertainties and geopolitical Non-traditional 4,126.3 3,755.6 3,301.5 3,140.1 3,569.7

tensions. The balance of payments was in a o\w: Gold

Unrecorded trade
1,238.3
485.3
1,314.9
455.4
1,596.3
423.7
1,468.7
426.5
1,743.4
408.7

comfortable position, albeit turning into a deficit Imports f.o.b. -10,659.4 -8,918.0 -7,707.2 -7,666.1 -8,751.6
Balance on services account 869.3 919.7 1,775.3 1,720.7 2,055.7
of USD 990.7 million in 2018/19 compared to a Receipts 3,514.2 3,396.2 3,769.2 3,896.6 4,088.1
Payments -2,644.9 -2,476.5 -1,994.0 -2,175.9 -2,032.4
surplus of USD 627.9 million in the preceding Balance on goods and services -4,452.0 -2,988.7 -1,270.7 -1,253.5 -2,199.8

year. The current account also continued to be Exports of goods and services
Imports of goods and services
8,852.3
-13,304.4
8,405.8
-11,394.5
8,430.4
-9,701.1
8,588.5
-9,842.0
8,584.2
-10,784.0

in a good position, but widened to a deficit of Balance on primary income account -705.4 -951.6 -907.4 -952.7 -821.4
Receipts 117.3 100.8 105.6 138.6 191.2
USD 2,645.3 million from a deficit of USD 1,771.8 Payments -822.6 -1,052.5 -1,013.0 -1,091.3 -1,012.6
o/w: interest by the Government -177.0 -420.5 -309.9 -348.2 -280.9
million. This was due to increase in imports of Balance on secondary income account 574.7 333.1 455.5 434.4 375.9

capital goods for infrastructure projects, decline Receipts

o/w: Official inflows
650.8
289.9
411.0
41.3
520.4
157.9
521.1
155.3
435.6
68.2

in exports due to low global demand, and decline Payments -76.1 -78.0 -65.0 -86.6 -59.6
Current account balance -4,582.7 -3,607.3 -1,722.6 -1,771.8 -2,645.3
in official transfers. The current account deficit Source: Tanzania Revenue Authority, Bank of Tanzania, banks and Bank of
Tanzania computations
was 4.5 percent of GDP, virtually similar to recent Note: r denotes revised data; p, provisional data; f.o.b, free on board; and o/w,
of which
historical trend, and is expected to narrow upon
completion of the major infrastructure projects. Trade Balance
The deficit on goods and services account
Despite importation of capital goods for
widened to USD 2,199.8 million from USD 1,253.5
infrastructure projects, foreign official reserves
million in 2017/18 largely because of increase in
remained adequate and evolved above the
imports of goods and services. Export of goods
country and EAC benchmarks throughout the
and services amounted to USD 8,561.6 million,
year. However, towards the end of the year, the
nearly similar to USD 8,588.5 million in 2017/18.
reserves declined, reaching USD 4,401.5 million
Merchandise (goods) exports declined by 4.2
at the end of June 2019 from USD 5,483.9 million
percent to USD 4,493.6 million, driven by all
in June 2018. The reserves were adequate to
traditional export crops, except coffee and cotton,
cover about 4.3 months of projected import of
which increased significantly.
goods and services. The import cover was above
the country benchmark of not less than 4 months. Non-traditional exports increased to USD 3,569.7
million from USD 3,140. 1 million, with export
of gold accounting to 48.8 percent, having
increased by 18.7 percent to USD 1,743.4 million.
The increase in gold export was attributed to
monitoring and enforcement measures to ensure
transparency in production and marketing of gold.

Foreign exchange receipts from export of

services, which includes tourism, increased to
USD 4,068.0 million in 2018/19 from USD 3,896.6
million in the preceding year, and accounted

20
 Bank of Tanzania Annual Report 2018/19

for nearly a half of total exports of goods and Chart 2.4: Services Receipts
services. Foreign exchange from travel, which is Millions of USD
Transportation Travel Other services
mainly from tourism, grew by 7.4 percent to USD 2,488.1
2,317.2
2,488.1 million, because of increase in the number 2,230.8
2,030.7
1,931.5
of tourist arrivals. Receipts from travel accounted
for more than 60 percent of total services receipts.
1,229.4 1,217.4
The performance of travel has been progressively 954.9 1,005.0
1,091.2

improving, together with transportation and other

528.6
459.7 447.2
services8 (Chart 2.4). 350.0 362.5

2014/15 2015/16 2016/17 2017/18 2018/19

Chart 2.2: Export Performance Source: Banks, and Bank of Tanzania computations
Millions of USD
Traditional Non-traditional

4,126.3
Imports of merchandise (goods) on f.o.b basis and
3,755.6
3,569.7
3,301.5 services, combined, amounted to USD 10,379.4
3,140.1
million in 2018/19 from USD 9,842.0 million in
2017/18. Goods import remained dominant,
1,125.3
726.6 798.6
935.9
amounting to USD 8,347.0 million, higher than
515.4
preceding year by 8.9 percent. The increase
2014/15 2015/16 2016/17 2017/18 2018/19 was more pronounced in imports of capital
Source: Tanzania Revenue Authority, and Bank of Tanzania computations
goods for infrastructure projects. Payments for
services to non-residents by 6.6 percent to USD
Chart 2.3: Composition of Goods Exports by
2,032.4 million in 2018/19, mainly on account of a
Category
decrease in travel payments (Chart 2.6). Foreign
Millions of USD
2017/18 payments with respect to transportation rose
Gold 1,468.7 by 16.1 percent, consistent with the increase in
Traditional exports 1,125.3 imports of goods.
Manufactured 790.8

Other export products 381.6 Chart 2.5: Composition of Goods Imports

Re-exports 159.1 Millions of USD

Capital goods Intermediate goods Consumer goods

Fish and fish products 184.0
4,107.9
4,057.7

Other minerals 125.0

3,717.7

3,415.0

Horticulture 30.9
3,025.2

2,847.9
2,820.0

2,806.2

2,804.7

2,689.2

2018/19
2,493.8

2,175.2

2,172.2

2,084.1
2,081.0

Gold 1,743.4

Traditional exports 515.4

Manufactured 901.5

Other export products 458.2

Re-exports 153.4

Fish and fish products 165.6 2014/15 2015/16 2016/17 2017/18 2018/19

Source: Tanzania Revenue Authority, and Bank of Tanzania computations

Other minerals 112.9

Horticulture 34.7

Source: Tanzania Revenue Authority, and Bank of Tanzania computations

8
Other services include; construction, insurance and pension, financial,
telecommunication, computer and information, charges for the use of intellectual
property, personal, cultural and recreational; government, royalties, personal and
other business services.

21
 Bank of Tanzania Annual Report 2018/19

Chart 2.6: Services Payments Financial Account

Millions of USD

Transportation Travel Other services

The financial account was a net balance of
USD 1,535.0 million in 2018/19 compared with
1,121.6 1,137.6 1,125.2
USD 1,936.5 million in 2017/18. Foreign direct
934.2 939.5 investment inflows, which accounted for 70.7
843.0
811.8 833.6 809.3
percent of the total financial inflows, increased
633.4
to USD 1,084.9 million from USD 996.2 million.
523.7
417.2
459.6 Other investments9 amounted to USD 428.0
385.7
348.5
million compared with USD 931.2 million, largely
due to decline in debt and debt-related liabilities
from unrelated parties.
2014/15 2015/16 2016/17 2017/18 2018/19

Source: Banks, and Bank of Tanzania computations

Direction of Trade
Income and Capital Transfers Tanzania’s trade in goods remained diversified,
albeit concentrated to a few countries. In 2018,
The primary income account which relates to
exports were mainly destined to South Africa
the use of factors of production (interest and
and India, which accounted for 40.1 percent of
dividends from investments abroad, rents from
exports. For imports, more than 35 percent of the
natural resources and net remittance flows from
goods imported originated from China and India.
migrant workers) was a deficit of USD 820.1 million
in 2018/19, lower than a deficit of USD 952.7
Table 2.2a: Share of Tanzania’s Exports,
million in 2017/18. The improvement resulted
Top 15 Countries
from a decline in interest payments and increase Percent
in interest receipts from overseas investments Country 2015 2016 2017 2018

and compensation to employees working abroad. South Africa 11.7 13.3 18.0 20.1
India 19.8 14.8 25.3 20.0
Interest payments decreased from USD 348.2
Switzerland 2.7 16.2 6.8 7.1
million to USD 279.6 million, while interest income Belgium 2.6 6.0 5.0 6.6

and compensation to employees working abroad Kenya 12.7 6.6 4.5 5.8
China 9.7 7.5 3.7 3.9
increased by 37.2 percent and 39.7 percent to USD
Democratic Republic of Congo 3.4 6.2 2.6 3.7
132.8 million and USD 58.4 million, respectively. Uganda 0.9 1.2 0.6 2.9
United Arab Emirates 2.7 1.3 2.3 2.3
Rwanda 0.7 0.1 1.6 2.2
The secondary income account, which records
Netherlands 1.3 1.3 1.9 2.1
current transfers between residents and non- Vietnam 1.2 3.1 8.1 1.9

residents, continued to record a surplus, despite Japan 4.0 2.9 1.9 1.8
USA 0.9 1.2 1.6 1.6
declining to USD 380.6 million in 2018/19 from Zambia 0.8 0.7 1.3 1.4
USD 434.4 million in 2017/18. The decrease in Source: Tanzania Revenue Authority and Bank of Tanzania computations

surplus was on account of a 56.1 percent decline

in inflow of official current transfers to USD 68.2
million. Secondary income outflows declined by
31.2 percent to USD 59.6 million.

Net capital transfers declined to USD 266.7

million from USD 396.8 million, largely on account
9
Other investments include other equity; currency and deposits; loans; trade
of decrease in project grants. credit and advances; other accounts receivable/payable from unrelated parties;
and SDR allocations.

22
 Bank of Tanzania Annual Report 2018/19

Table 2.2b: Share of Tanzania’s Imports, The World Bank Commodity Price Forecast
Top 15 Countries of April 2019 indicated the price of crude oil to
Percent
average USD 66 per barrel in 2019 from USD 68
Country 2015 2016 2017 2018

China 17.3 20.8 19.4 20.7

per barrel in 2018 and further down to USD 65 per
India 11.7 18.1 15.1 14.3 barrel in 2020 (Table 2.4). The forecast was based
United Arab Emirates 7.8 7.5 7.7 10.2
Saudi Arabia 18.7 2.8 6.1 6.7 on a projected weaker outlook for global growth
South Africa 4.8 6.0 5.4 5.1
in 2019 and expected production increase by
Japan 3.7 4.7 5.3 4.7
Kenya 2.2 3.4 2.6 2.9 Shale industry in the US. The forecast assumed
USA 3.0 3.2 2.6 2.8
Germany 1.5 2.4 3.0 2.6
production cuts by OPEC and allies throughout
Turkey 0.7 0.8 1.0 2.0 2019, and that demand would strengthen in
United Kingdom 1.7 2.0 1.7 1.9
Malaysia 1.6 3.3 2.4 1.7
2020, owing to prospects of recovery of global
Indonesia 1.3 0.8 1.9 1.6
growth. This, however, was dependent on several
Switzerland 4.0 1.6 2.7 1.5
Thailand 0.9 1.0 1.2 1.4 factors, including decisions of OPEC and allies
Source: Tanzania Revenue Authority and Bank of Tanzania computations
on production levels, outcome of discussions on
removing waiver on production from Iran, and
World Commodity Prices geopolitical tensions.
During 2018/19, prices of most agricultural and
non-agricultural commodities in the world market The World Bank Commodity Price Forecast of
were lower than in the preceding year, except for April 2019 also projected the price of gold to
oil, which increased. Notably, the price of coffee increase by 3.2 percent to USD 1,310 per troy
declined due to increase in supply from Brazil, ounce in 2019, based on expectation of a strong
which is the main producer. Prices of tea and demand resulting from prolonged pause in interest
cloves decreased because of high production rate increase by the U.S. Federal Reserve. The
associated with favourable weather. The prices prices of agricultural commodities were expected,
of oil increased following extension of production on average, to fall by 2.6 percent, because of
cut by the OPEC10 and non-OPEC members, ample global stocks, and increase of 1.7 percent
coupled with involuntary reduction of supply from in in 2020, stemming from expected cuts in US
sanctions-hit Iran and outages in Venezuela. crop planting and elevated cost of energy and
fertilizers.
Table 2.3: World Commodity Prices
Percentage
2016/17 2017/18 2018/19 change Table 2.4: Outlook for World Market
Robusta coffee USD per kg 2.23 2.05 1.73 -15.7
Commodity Prices
Arabica coffee USD per kg 3.65 3.08 2.81 -8.7 Actual Projections

Tea (average price) USD per kg 2.97 3.06 2.63 -14.1 Commodity Unit 2016 2017 2018 2019 2020

Tea (Mombasa auction) USD per kg 2.71 2.74 2.31 -15.7 Crude oil, average USD per barrel 42.81 52.81 68.30 66.00 65.00
Cotton, "A index" USD per kg 1.82 1.92 1.90 -1.2
Gold USD per troy ounce 1,248.99 1,258.00 1,269.00 1,310.00 1,360.00
Sisal (UG) USD per kg 1.75 1.73 1.71 -1.2
Coffee "Arabica" USD per kg 3.61 3.32 2.85 2.90 2.94
Cloves USD per kg 8.42 8.39 7.50 -10.6
Coffee "Robusta" USD per kg 1.95 2.23 1.87 1.75 1.79
Crude oil* USD per barrel 50.06 61.22 67.02 9.5

Crude oil** USD per barrel 48.48 61.41 67.77 10.4 Cotton USD per kg 1.64 1.84 2.01 1.88 1.91

White products USD per tonne 434.80 599.14 653.40 9.1 Tea USD per kg 2.64 3.15 2.85 2.45 2.51

Gold USD per troy ounce 1,258.05 1,297.14 1,263.80 -2.6 Tobacco USD per kg 4.81 4.68 4.86 4.90 4.86

Source: http://www.Worldbank.org/Prospects/commodities, World Bank Public Maize USD per tonne 159.20 155.00 164.00 168.00 171.00
Ledger, Bloomberg
Note: * U.K Brent; ** f.o.b Dubai; and UG, under grade Rice USD per tonne 396.17 399.00 421.00 410.00 413.00

Wheat USD per tonne 166.75 174.22 210.00 212.00 214.00

Sugar USD per tonne 397.97 354.33 280.00 280.00 290.00

Source: World Bank, Commodity Price Forecast, April 2019

10
Organization of the Petroleum Exporting Countries

23
 Bank of Tanzania Annual Report 2018/19

3.0 Financial Sector

Pursuant to section 5 (1) of the Bank of Tanzania The banking sector performed satisfactorily, with all
Act, 2006, Cap 197, Bank of Tanzania is mandated the indicators above the regulatory requirements.
to license, regulate and supervise banks and Notably, the ratios of core capital and total capital
financial institutions, including financial leasing to total risk weighted assets and off-balance sheet
and mortgage financing companies, credit exposures, were 16.5 percent and 18.4 percent in
reference bureau, representative offices of foreign June 2019, respectively, lower than 18.20 percent
banks, bureaux de change and non-deposit taking and 20.2 percent in 2018. Nevertheless, the ratios
microfinance service providers. Furthermore, exceeded the minimum regulatory requirement
section 48 (2) of the Social Security (Regulatory of 10 percent and 12 percent, respectively. The
Authority) Act, 2015 gives Bank of Tanzania liquidity level was also above the regulatory
powers to regulate and supervise all financial requirement of 20 percent, despite decreasing
matters of the registered social security schemes. from the preceding year. The ratio of liquid assets
to demand liabilities was 34.8 percent compared
Financial Sector Performance
with 37.6 percent. Assets grew by 13.6 percent to
The financial sector was stable and continued to TZS 32,460.1 billion as at the end of June 2019,
expand and deepen, owing to implementation of mainly driven by deposits that increased by 14.2
policy and regulatory framework to improve the percent to TZS 23,631.2 billion. The observed
functioning of the sector, as well as innovations increase in deposits was largely due to mobilization
resulting from application of financial technology. efforts taken by banks through agent banking and
The improvement in the financial sector occurred digital platforms. Loans, advances and overdrafts
in several areas. The number of supervised banks continued to constitute a significant share of
and other financial institutions increased to 61, of assets.
which 52 were banks and 9 non-bank financial
institutions, and branch network expanded to 878 The ratio of banks’ non-performing loans to
from 838 in 2017/18. The Bank of Tanzania also gross loans slightly increased to 10.7 percent at
sanctioned merging of several banks to improve the end of June 2019 from 10.3 percent at the
capital and operational efficiency. corresponding period last year, and was above the
desirable ceiling of 5 percent. Several strategies
Table 3.1: Licensed Banks
Ownership Stock exchange
were executed by the Bank of Tanzania and banks
structure listing
Type of bank Quantity
to address the high level of non-performing loans.
Domestic Foreign Listed Not listed
Commercial banks 39 11 28 5 34 These include improving credit-underwriting
Community banks 6 6 0 2 4
Microfinance banks 5 2 3 1 4 process, increase use of credit reference system
Development finance banks 2 2 0 0 2
to reduce exposure to credit risk, and improve loan
Total 52 21 31 8 44

Source: Bank of Tanzania recovery efforts. In addition, the Bank of Tanzania,

strengthened supervision and enforcement of
Table 3.2: Licensed Non-Banks Financial banks. These measures were complemented
Institutions by government efforts to further improve the
Ownership Stock exchange
structure listing business environment through implementation of
Type of non-bank Quantity Domestic Foreign Listed Not listed
the Blueprint for regulatory reforms to improve the
Financial leasing 3 1 2 0 3
Mortgage financing 2 2 0 0 2 business environment.
Credit reference bureau 2 0 2 0 2
Representative offices 2 0 2 0 2
Total 9 3 6 0 9

Source: Bank of Tanzania

24
 Bank of Tanzania Annual Report 2018/19

Financial Deepening In order to achieve the targets of NFIF 2018-2022

and NFEF 2016–2020, a number of activities
Capitalizing on accomplishments on financial
were implemented in 2018/19. First, Financial
sector reforms in the country almost over the last
Education Consumer Strategy was developed to
three decades11, the Bank of Tanzania continued
address proper approaches to deliver financial
with initiatives aimed at financial sector deepening.
education to different segments of the population.
As a result, financial deepening, as measured by
Second, a mapping exercise was conducted in
the ratio of bank credit to the private sector to GDP,
order to identify key stakeholders for delivering
rose from 3.3 percent in 2000/01 to 14.0 percent in
financial education programs. Third, engaged the
2018/19, with a peak of 16.4 percent in 2015/16.
Governments to incorporate financial education
The ratio of money supply to GDP, an alternative
in mainstream school curricula, whereby the
measure of financial deepening, increased from
Revolutionary Government of Zanzibar accepted
13.0 percent to 22.2 percent (Chart 3.1).
to incorporate financial education in pre-primary
and primary schools’ curricula. Fourth, started
Chart 3.1: Trend of Financial Deepening
development of financial education website,
M3 to GDP ratio Private sector credit to GDP ratio

30
whereby relevant content was prepared and the
25
website is under construction. Fifth, development
20
of the National Financial Consumer Protection
Framework was initiated and is at advanced
Percent

15
stage. The framework aims at among other things,
10
safeguarding interests of consumers of financial
5
services in the country.
0
2000/01

2002/03

2004/05

2006/07

2008/09

2010/11

2012/13

2014/15

2016/17

2018/19

In order to accommodate and promote data

Source: Bank of Tanzania disaggregation among financial inclusion
stakeholders, the Bank finalized development of
Financial Inclusion a comprehensive financial inclusion database.
Bank of Tanzania continued to coordinate Further, development of Financial Services
activities for implementation of the National Registry, a system to register and keep track of
Financial Inclusion Framework (NFIF 2018- financial services access points, was on progress.
2022). The NFIF is targeting to increase access The system aims at providing functionality that
to financial services for adult population from 86 not only allows capturing, storing, reporting and
percent recorded in 2017 to 92 percent by 2022, analysing financial access points data, but also
and usage of financial services from 65 percent enables integration with other stakeholders’
to 75 percent. Also, it aims at increasing usage of existing systems. The registry will also serve
financial services by women, from 61 percent in as a national system for tracking growth and
2017 to 73 percent by 2022. Besides, to address distribution of financial access points in order to
the issue of financial capability, which influences inform the key stakeholders on financial inclusion
usage of financial services, the National Council and the public in general.
for Financial Inclusion is implementing the
National Financial Education Framework (NFEF Credit Reference Operations
2016–2020). As part of efforts to ensure that all regulated
institutions are submitting credit information to
11
The transformation broadly reflects the outcome of the First-Generation Financial
Sector Reforms adopted in 1991 and the Second-Generation Financial Sector
Reforms adopted in 2003.
credit reference data bank and make utilization

25
 Bank of Tanzania Annual Report 2018/19

of the same, the Bank continued to sensitize Agent Banking Operations

various stakeholders about credit information
Agent banking business continued to grow, as
sharing and its importance in lending and financial
part of initiatives to promote financial inclusion by
planning. In this regard, on 6th February 2019, the
expanding outreach of banking services. Notably,
Bank in collaboration with International Finance
the number of banks approved to engage in agent
Cooperation launched a national credit reporting
banking increased to 20 at the end of June 2019
awareness and financial literacy campaign,
from 17 a year earlier, and agents increased to
followed by sensitization workshops to different
22,481 from 13,679. This has facilitated savings
stakeholders in Dodoma and Mwanza regions.
mobilization of the proportional of bankable
The sensitization will continue in other areas
population. Number of deposits increased to
of the country to ensure all lending institutions
23,393,557 valued at TZS 14,483.69 billion at the
submit data to the Credit Reference Bureau and
end of June 2019 from 13,206,034 valued TZS
use credit report for potential borrower during
6,759.75 billion in the corresponding period of
screening process.
2018. Likewise, the number of withdrawals grew
by 106 percent to 13,403,510 (TZS 4,376.21
Credit reference system improved further in
billion) from 6,514,778 (TZS 1,915.58 billion).
terms of data submission and quality. Out of 57
banks and financial institutions, 54 had submitted Social Security Schemes
information to the credit reference databank by the
In accordance with section 48 (2) of the Social
end of June 2019. Meanwhile, 95 non-regulated
Security (Regulatory Authority) Act, 2015, the
institutions shared credit information through
Bank of Tanzania is mandated to conduct on-
credit reference bureaus in 2018/19 compared
site examination and off-site surveillance on all
with 89 in the previous year.
financial matters of social security schemes. This
was applied to the existing four social security
Bureau De Change Operations
schemes: National Social Security Fund, Public
The Bank of Tanzania strengthened supervision Service Social Security Fund, National Health
of bureau de change activities in order to ensure Insurance Fund and Workers Compensation Fund.
compliance and orderly conduct of business.
Notably, the Bank suspected violation of Non-deposit Taking Microfinance
business procedures and regulations, leading Service Providers
to a special inspection on bureau de change The National Assembly of Tanzania enacted
operations. Licences of some bureau de change Microfinance Act, 2018 in November 2018.
were revoked, apparently because of conducting Section 12 of the Act, inter alia, mandates
business contrary to procedures and regulations. the Bank of Tanzania to license, regulate and
Consequently, the number of bureau de change supervise microfinance business in Tanzania
operating in Tanzania declined to five at the end Mainland. This is intended to operationalize
of June 2019 from 107 in June 2018. In addition, the National Microfinance Policy 2017, which
availability of foreign exchange improved aims at ironing out identified gaps in regulation
significantly and stability of exchange rate was and supervision of microfinance services in the
enhanced. Henceforth, Banks and Tanzania country. Meanwhile, the Bank of Tanzania is
Posts Corporation Limited are providing bureau working together with the Ministry of Finance and
de change services together with the remaining Planning to finalize development of regulations
bureau de change. that will guide the process of licensing, regulating
and supervising non-deposit taking microfinance

26
 Bank of Tanzania Annual Report 2018/19

service providers. The regulations were expected Legal and Regulatory Framework
to be in place in 2019/20.
During 2018/19, the Bank of Tanzania reviewed,
developed and issued various regulations and
Financial Stability Review guidelines to cope with the dynamics in the
The financial sector was stable and resilient to economy. In collaboration with the Tanzania
shocks, underpinned by stable macroeconomic Insurance Regulatory Authority, the Bank issued
environment, despite the existence of internal and Bancassurance Guidelines to provide a framework
external shocks. The Financial System Stability for regulating and supervising bancassurance
Index (FSSI), which measures the stability of business. These guidelines were also intended to
the financial system, indicates that the financial enhance accessibility of insurance services to the
sector remained stable and resilient to short-term public, and provide one-stop shop for banking and
internal and external shocks. The index was -0.9 insurance services. Further, the Bank reviewed and
in 2018/19, within the set boundaries of ± 3.0 issued the Foreign Exchange (Bureaux de Change)
standard deviations. Regulations 2019, for the purpose of addressing
technical gaps observed in the previous regulatory
The Bank also carried out macro surveillance to framework, especially in the process of licensing,
identify and assess risks arising out of financial regulating and supervising the operations of the
system and real economy. In this regard, the bureaux de change.
Bank carried out Non-Financial Corporate Sector
Financial Condition, and Bank Lending Practices Furthermore, the Bank teamed up with other
and Credit Condition surveys, which revealed Government’s stakeholders12 to prepare a concept
that there were no significant risks exposure paper on establishment of Secured Transaction
from corporate and banking sector. In addition, Law and Collateral Registry for the purpose of
the Household Financial Condition survey and ensuring unique recognition and valuation of
assessment of real estate performance stability collaterals and hence broaden access to credit by
and resilience of the financial sector, albeit showing deterring multiple pledge of collaterals.
some vulnerabilities from debt servicing capacity
and property prices fluctuations. Vulnerabilities
identified from non-banking sector, including
insurance sector, social security schemes and
capital markets, were contained by stable financial
and macroeconomic environment. The Bank
carried out an assessment of risks emanating
from global financial and economic developments
and found that global risks had not being fully
transmitted to the domestic economy given
stable macroeconomic environment. The financial
stability reports were deliberated during Tanzania
Financial Stability Forum (TFSF) meetings and
strategies were spelled out for implementation.

12
Prime Minister’s Office, Ministry of Land, Housing and Human Settlements
Development, the Law Reforms Commission of Tanzania, the Business
Registration and Licensing Authority, the Registration Insolvency and Trusteeship
Agency and the Attorney General’s Chambers

27
 Bank of Tanzania Annual Report 2018/19

4.0 Payment Systems

4.1 National Payment Systems This modern technology, which will facilitate
instant payments, easy connections by multiple
The National Payment Systems (NPS) Act 2015
participating institutions and ultra-low-cost
provides the Bank of Tanzania powers to oversee
payments. It will also provide a single national
the functioning of the national payment system
switch that will facilitate Bank of Tanzania oversight
and enforce compliance with the regulatory
supervision of payment systems, improve financial
framework. This regulatory role includes licensing
inclusion through usage of electronic payments
bank and non-bank payment systems providers
platforms and promote cash-lite economy. TIPS is
as well as approving use of payment instruments
expected to be operational in 2019/20.
and products.

As regards transactions through payment

In 2018/19, four new payment system licenses
platforms, the Tanzania Interbank Settlement
were issued to commercial banks, making 43
System (TISS) operated smoothly in 2018//19, with
licenses. The number of non-bank institutions
volume of transactions amounting to 1,757,975
licensed to provide payment system reached 15
compared with 1,925,569 in the preceding year,
at the end of June 2019 from 13 at the end of
and value increasing to TZS 183.3 trillion from TZS
June 2018. In terms of payments instruments and
177.1 trillion. Two participants were registered
products, the use of Quick Response (QR) code
and added to TISS, China Dasheng Bank and
technology for merchant payments boosted usage
Yetu Microfinance Bank Plc, making the number
of mobile money (electronic money) in the market.
of participants to 52.
The number of active accounts in mobile money
reached 22.3 million at the end of June 2019 from
Chart 4.1: TISS Transactions
20.5 million at the end of June 2018, with more
Volume (LHS) Value (RHS)
than 532,474 agents (tills). The interoperability of
mobile financial services contributed to growth of 250 20

mobile money transactions by 75 percent in volume

200 16
and 43 percent in value compared with 2017/1813.
150 12
To enhance and broaden interoperability, the
Trillions of TZS
Thousands

Bank was working with stakeholders to facilitate 100 8

interoperability at the level of agents of mobile

50 4
financial services.
0 0
Jul

Jan

Jun
Jul

Jan

Jun
Oct
Nov
Dec

Oct
Nov
Dec
Aug
Sep

Apr

Aug
Sep

Apr
Feb

Feb
Mar

May

Mar

May

Development of the Tanzania Instant Payment 2017 2018 2019

System (TIPS) commenced in January 2019, to Source: Bank of Tanzania
address limitations of current service offerings,
with regard to interoperability by enabling China Dasheng Bank also joined the Tanzania
individuals, businesses, and government to be Automated Clearing House (TACH), bringing the
able to transact with each other, regardless of number of clearing house participants to 43. The
service provider or sector, bank or non-bank electronic funds transfer through TACH operated
payment service providers14. smoothly, with volume of transactions increased
by 19.5 percent to 13,624,264 and value by 39.0
13
Interoperability allows money transfers between different networks.
14
TIPS is a payment platform which will connect different payment systems percent to TZS 8,329.2 billion.
providers to facilitate fastest, cost-effective and secure instant payments.

28
 Bank of Tanzania Annual Report 2018/19

4.2 Regional Payment Systems In Tanzania, banks that participated in SIRESS

were six; Stanbic Bank Tanzania, National Bank of
The East African Payment System (EAPS), a bank-
Commerce, Standard Chartered Bank Tanzania,
to-bank funds transfer (payment) platform within
Barclays Tanzania, Ecobank Tanzania and First
the East African Community countries carried
National Bank of Tanzania.
out in local currencies, continued to perform
satisfactorily. The volume and value of transactions
denominated in Tanzania shilling, incoming and
outgoing, increased by 29.2 percent and 65.4
percent over the year to 2,729 and TZS 121.8
billion, respectively. The volume of Kenya shilling
(KES) denominated transactions decreased by
3.2 percent to 2,744, while value increased by
18.0 percent to KES 5.1 billion. Transactions
denominated in Uganda shilling (UGX) were
amounted 325, valued at UGX 12.2 billion, an
increase of 38.3 percent and 3.4 percent in volume
and value, respectively. The value of transactions
between Tanzania and Rwanda (incoming and
outgoing) increased to Rwanda Franc (RWF)
347.9 million in 2018/19 from RWF 12.0 million in
2017/18. There were no transactions with other
EAC members (Burundi and South Sudan) as
they have not yet joined EAPS. Banks in Tanzania,
which participated actively in EAPS were CRDB
Bank Plc, Equity Bank Tanzania Limited, Barclays
Tanzania, Citibank Tanzania Limited, National
Bank of Commerce, KCB Bank Tanzania Limited,
Standard Chartered Bank Tanzania, Ecobank
Tanzania and NMB Bank Plc.

For the SADC Integrated Regional Electronic

Settlement System (SIRESS), a payment and
settlement system that facilitate funds transfer
for cross-border payment in the SADC region15,
transactions processed in 2018/19 amounted
to 359,500, valued at South African Rand (ZAR)
1,319.9 billion. This was an annual increase of 7.5
percent in volume and 4.7 percent in value. During
2018/19, the system was operational in all SADC
member states, except Madagascar and the
Union of Comoros. The number of participating
banks was 83, including seven central banks.

15
SIRESS provides low transaction costs and promotes cross-border trade in
SADC countries.

29
 Bank of Tanzania Annual Report 2018/19

5.0 Zanzibar Economic Performance

The Zanzibar Development Vision 2020, whose Chart 5.2: Contribution to Real GDP Growth
Percent
objectives include poverty reduction, sustainable
2018
growth and human development, guided Accomodation and food services 39.8
Agriculture
implementation of economic policies in 2018/19. Trade and repairs 6.3
10.5

Transport and storage 5.5

The policies were implemented consistent with Public administration
Real estate activities
5.1
4.9
Construction 4.6
multi-sectoral strategy: The Zanzibar Strategy for Education 2.7
Other service activities 2.6
Growth and Reduction of Poverty III (2016-2020)— Mining and quarrying
Financial and insurance activities
2.3
2.1
Information and communication 0.9
MKUZA III—, which is closely linked to Agenda Fishing 0.8
Administrative and support services 0.6
2030 and related sustainable development goals. Human health and social work
Electricity and gas
0.4
0.4
Water supply and sewerage 0.3
Arts, entertaiment and recreation 0.3

5.1 Output
Professional, scientific and technical 0.1
Domestic services 0.1
Forestry and hunting 0.1
Manufacturing -1.8
In order to take into account changes in
2017
the structure of the economy and to ensure Accomodation and food services 27.8
Agriculture 18.9
international comparability, the Office of the Manufacturing 8.7
Trade and repairs 5.6
Chief Government Statistician Zanzibar rebased Real estate activities
Financial and insurance activities
4.4
4.1
Information and communication 3.6
national accounts statistics. The rebased statistics Mining and quarrying
Fishing
2.9
2.2
Other service activities 2.1
use 2015 as the base year instead of 2007. Transport and storage 1.9
Education 0.9
Forestry and hunting 0.9
Construction 0.9
The growth of the economy remained strong in Administrative and support services
Water supply and sewerage
0.9
0.8
Electricity and gas 0.3
2018, albeit expanding at a slower pace compared Human health and social work
Arts, entertaiment and recreation
0.2
0.2
Domestic services 0.1
with 2017. Real GDP grew by 7.1 percent Professional, scientific and technical -0.1
Public administration -2.6
compared with 7.7 percent in 2017, largely driven Source: Office of the Chief Government Statistician, Zanzibar
by accommodation and food services, agriculture,
trade, and transport (Chart 5.1 and Chart 5.2). In nominal terms, GDP amounted to TZS 3,668.6
The fastest growing activities were human billion from TZS 3,227.0 billion in 2017, with service
health and social work, transport and storage, industry accounting for the largest share at 51.3
accommodation and food services, mining and percent, followed by agriculture (21.2 percent) and
quarrying, and arts, entertainment and recreation. industry (17.8 percent)16. This together with other
The growth of the economy is projected to remain factors, led to a 10.4 percent increase in GDP per
strong in 2019/20. capita to TZS 2.3 million in 2018 (Chart 5.3).

Chart 5.3: Nominal GDP per Capita

Chart 5.1: Real GDP Growth Rate
‘000’ of TZS
Percent
2,322
7.7 2,103
7.1 1,872
6.4
6.2 1,638
5.8 1,521

2014 2015 2016 2017 2018

Source: Office of the Chief Government Statistician, Zanzibar

2014 2015 2016 2017 2018 16
According to International Standard Industrial Classification (ISIC), it comprises
of Mining and quarrying, Manufacturing, Electricity and gas, water supply and
Source: Office of the Chief Government Statistician, Zanzibar sewerage and Construction

30
 Bank of Tanzania Annual Report 2018/19

Performance of Economic Activities Chart 5.5: Procurement of Major Export Crops

Tonnes
Services Cloves Clove sterm Seaweed

Services activity, which is the major economic 16,724

activity in Zanzibar, grew by 10.4 percent in 2018 13,302

compared with 7.7 percent in 2017, largely driven 11,114 10,981

10,425
by accommodation and food services, linked
8,277
with increase in tourist arrivals to 520,809 from
433,474, of which 59.7 percent were from Europe. 4,153
4,679
3,322
Tourists from non-traditional markets such as 1,631
901 975 675
Russia, China, Japan, Ukraine and Poland were 217 173

2014 2015 2016 2017 2018P

also noticeable.
Source: Office of the Chief Government Statistician, Zanzibar
Note: p denotes provisional data

Chart 5.4: Tourist Arrivals in Zanzibar

Number of Tourists
Industry
520,809

Industry activity expanded by 2.2 percent in 2018

433,474

376,242
compared with 5.6 percent in 2017. The slowdown
311,891
294,243
was contributed by manufacturing sub-activity,
which contracted by 1.6 percent compared with
growth of 8.6 percent. This was partly due to a
decline in production of manufactured goods,
particularly water and soft drink, partly owing to
2014 2015 2016 2017 2018 high competition from imports.
Source: Office of the Chief Government Statistician, Zanzibar; Zanzibar
Commission for Tourism; and Department of Immigration Zanzibar
Table 5.1: Production of Selected
Manufactured Products
Agriculture, Forestry and Fishing
Percentage
change

Value added in agriculture, forestry and fishing Commodity Units 2014 2015 2016 2017 2018
P
(2017 to
2018)

sub-activity slowed to 3.7 percent in 2018 from Dairy products '000' Litres 1,527.9 7,745.0 10,475.5 8,174.3 7,709.3 -5.7

Mil. of TZS 2,668.6 12,552.9 13,061.3 7,751.0 8,702.2 12.3

7.9 percent in 2017, because of slow growth of Beverages* '000' Litres 12,448.0 16,972.0 19,811.0 21,699.0 20,166.0 -7.1

Mil. of TZS 4,081.6 5,314.9 7,232.2 7,921.6 7,362.0 -7.1

crops sub-activity by 3.7 percent compared with Bread '000' Pcs 143,855.0 161,911.0 174,350.0 194,893.0 209,439.0 7.5

Mil. of TZS 17,981.9 19,720.2 20,852.9 23,192.2 24,923.2 7.5

10.6 percent. Much of the decline was in cloves Door UPVC No 168.0 229.0 93.0 121.0 239.0 97.5

production, owing to cyclical nature of the crop. Essential products

Mil. of TZS

Pcs
29.3

0.0
31.5

0.0
13.3

0.0
17.4

227,088.0
33.9

224,045.0
95.6

-1.3

Mil. of TZS 0.0 0.0 0.0 811.8 801.0 -1.3

Garments dash Pcs 3,950.0 3,419.0 3,674.0 3,119.0 2,973.0 -4.7

Procurement of cloves, which is the major export dash

Mil. of TZS 104.9 98.3 110.8 104.6 103.6 -1.0

Jewellery Grams 8,199.0 7,032.0 5,915.0 5,060.0 5,684.0 12.3

crop, declined to 675 tonnes in 2018 from 8,277 (gold/silver)
Mil. of TZS 17.5 15.3 15.1 12.3 12.1 -1.6

Noodles Kgs 222,392.0 277,990.0 181,872.0 247,350.0 295,701.0 19.5

tonnes in 2017. Procurement of seaweeds also Mil. of TZS 369.9 500.4 327.4 445.2 532.3 19.5

declined to 10,425 tonnes from 10,981.0 tonnes, Wheat flour Tonnes

Mil. of TZS
31,899.0

25,519.2
27,749.0

23,836.0
23,834.0

23,085.2
25,196.0

23,939.3
26,963.0

24,711.8
7.0

3.2

partly associated with diseases and fall in price in Window UPVC Pcs 270.0 320.0 149.0 71.0 121.0 70.4

Mil. of TZS 41.3 42.0 17.7 13.3 21.7 63.4

the world market. Chart 5.5 presents procurement Source: Office of the Chief Government Statistician, Zanzibar
Note: * includes mineral water, soft drinks and juice; and p, denotes provisional
of major cash crops in the past five years. data

31
 Bank of Tanzania Annual Report 2018/19

5.2 Inflation year, and below the target by 4.8 percent. The
revenue collection increased 9.1 percent over
Inflation remained low throughout 2018/19
the amount collected in the preceding year. Tax
relative to the preceding year. Headline inflation
revenue accounted for 87.3 percent of revenue
averaged 3.3 percent compared with 4.7 percent
collection, and only income tax was on target.
in 2017/18, driven by both food and non-food
Foreign grants amounted to TZS 42.1 billion, more
inflation. Food inflation eased to 2.6 percent from
than projected by 19.9 percent. Non-tax revenue
3.6 percent due to adequate food supply from
was TZS 64.7 billion, surpassing the target by
domestic sources and government measures to
18.4 percent largely owing to more than projected
facilitate importation of food, such as rice, wheat
dividend from public corporations (Chart 5.7b).
and sugar. Inflation of non-food consumer goods
and services was 3.9 percent compared with 6.0
Chart 5.7a: Revenue Performance
percent, driven mostly by moderation in energy Billions of TZS
prices, particularly fuel prices (Chart 5.6). Inflation Budget Actual

in Zanzibar is expected to remain low in 2019/20, 786.5

748.4

underpinned by projected adequate food supply 675.8 685.9

and subdued petroleum products in the world 521.9

482.4
market. 434.6 425.3
365.8 362.8

Chart 5.6: Inflation Developments

Percent
Headline Food Non-food

14
2014/15 2015/16 2016/17 2017/18 2018/19
12

10
Source: Ministry of Finance and Planning, Zanzibar

6
Chart 5.7b: Revenue Sources
4 Billions of TZS
2
Actual 2017/18 Target 2018/19 Actual 2018/19
0
213.6
191.8

191.1

-2
184.8
Mar-17

Mar-18

Mar-19
Jun-16

Jun-17

Jun-18

Jun-19
Dec-16
Sep-16

Dec-17
Sep-17

Dec-18
Sep-18

174.5
166.2
165.9

144.6

143.5
142.8

135.2

Source: Office of the Chief Government Statistician, Zanzibar

113.2

94.7
80.0
78.9

5.3 Public Finance

Government Budgetary Operations
The Government continued to implement various Tax on imports VAT and excise Income tax Other taxes Non-tax revenue
duties (local)
measures to strengthen tax administration and Source: Ministry of Finance and Planning, Zanzibar
compliance, as well as to improve expenditure
management. As such, the performance of the Expenditure amounted to TZS 1,131.5 billion,
budget was generally satisfactory. Revenue falling short of estimates by 14.0 percent. Out of
collections and grants from development partners the government expenditure, TZS 702.8 billion
increased, leading to a resources envelope of was spent on recurrent obligations, almost as
TZS 791.1 billion, of which TZS 748.4 billion estimated at TZS 702.1 billion, while TZS 428.7
was revenue and the balance was grants (Chart billion was expenditure on development projects
5.7a). The revenue outturn was equivalent to 20.4 and was below estimates by 30.1 percent (Chart
percent of GDP from 21.2 percent in the preceding 5.8).

32
 Bank of Tanzania Annual Report 2018/19

Chart 5.8: Expenditure Components percent of the debt stock was guaranteed by the
Billions of TZS
Government of United Republic of Tanzania. The
Actual 2017/18 Estimates 2018/19 Actual 2018/19
increase was on account of new disbursements
613.0
and debt reconciliation between the Revolutionary
Government of Zanzibar and United Republic of
428.7

364.8 368.2
Tanzania Government. Composition of external
337.3 334.6 341.1
282.2
301.1 debt stock by creditor category changed slightly,
where export credit debts overtook bilateral debts
(Chart 5.10).

Wages and salaries Other expenditure Development expenditure

Chart 5.10: External Debt by Creditors,
Source: Ministry of Finance and Planning, Zanzibar Percentage Share of Total
2017/18 2018/19

Government fiscal operations led to overall deficit 65.2

of TZS 329.1 billion, which was equivalent to

9.0 percent of GDP. The deficit was financed by 48.2
42.5
external and domestic borrowing amounting to
30.7
TZS 294.5 billion and TZS 34.6 billion, respectively.

Debt Developments
6.3
2.6 2.9 1.5
Zanzibar debt stock, comprising external and
Multilateral Export Credit Bilateral Commercial
domestic debt, amounted to TZS 806.8 billion at
Source: Ministry of Finance and Planning, Zanzibar
the end of June 2019 from TZS 472.4 billion in
June 2018, following disbursements of external Domestic debt increased to TZS 133.4 billion at
loans and new issuance of Treasury bond in March the end of June 2019 from TZS 113.4 billion in
2019. The debt stock was 22.0 percent of GDP June 2018, following issuance of 15-year Treasury
compared with 14.0 percent in 2017/18. External bond worth TZS 22.6 billion and a loan from
debt accounted for 83.5 percent of the debt stock Zanzibar Social Security Fund amounting to TZS
(Chart 5.9). 12.0 billion.

Chart 5.9: Zanzibar Debt Stock The structure of domestic debt stock in terms of
Billions of TZS
Domestic debt stock External debt stock
borrowing instrument remained the same as in the
previous four years, where government securities,
particularly Treasury bonds dominated (Table 5.2).

673.4
Table 5.2: Domestic Debt by Borrowing
359.1 Instrument
268.8 273.6
247.8 Millions of TZS
Percentage
133.4 share
79.4 100.0 97.8 113.4
2015/16 2016/17 2017/18 2018/19 2018/19
2014/15 2015/16 2016/17 2017/18 2018/19
Government securities 62,004.2 60,259.0 80,259.2 108,148.3 81.1

Source: Ministry of Finance and Planning, Zanzibar Zanzibar Social Security Fund 20,000.0 22,875.0 22,875.0 21,315.2 16.0

People's Bank of Zanzibar 14,032.0 10,760.5 6,287.8 3,902.8 2.9

Zanzibar Port Company 3,287.9 3,287.9 3,287.9 0.0 0.0

External debt stock increased by 85.6 percent
Others 654.2 654.2 654.2 0.0 0.0
to USD 294.1 million (equivalent to TZS 673.4 Total 99,978.3 97,836.6 113,364.0 133,366.3 100.0

billion) at the end of June 2019, of which about 96 Source: Ministry of Finance and Planning, Zanzibar

33
 Bank of Tanzania Annual Report 2018/19

5.4 External Sector Performance Table 5.4: Goods Exports by Major Categories
P
Item Unit 2014/15 2015/16 2016/17 2017/18 2018/19
Current account turned to a deficit of USD 66.1
Traditional goods:
million in 2018/19 compared to a surplus of Cloves

USD 13.8 million in the preceding year, driven by Value USD '000' 30,619.4 46,204.8 17,400.2 59,178.6 1,224.0

Volume '000' Tonnes 2.8 5.7 2.2 7.5 0.2

increase in imports and decline in exports (Table
Unit price USD/Tonne 11,101.2 8,067.9 7,757.6 7,939.2 6,800.0

5.3). Non-traditional goods:

Seaweeds

Table 5.3: Current Account Value USD '000' 4,397.7 2,586.4 1,631.7 4,591.0 4,032.8

Volume '000' Tonnes 9.1 6.7 3.5 12.0 9.0

Millions of USD
Unit price USD/Tonne 482.6 386.1 470.5 389.4 448.8
p
Item 2014/15 2015/16 2016/17 2017/18 2018/19
Manufactured goods USD '000' 2,846.5 9,352.8 4,245.4 7,017.9 4,491.2

Goods account -201.2 -92.4 -95.4 -124.5 -218.1 Fish and fish products USD '000' 57.5 40.7 34.1 259.5 777.9

Exports 62.6 67.8 24.0 73.4 11.1 Others exports USD '000' 24,637.5 9,603.9 721.4 2,320.3 549.3

Imports (f.o.b) 263.8 160.2 119.4 197.9 229.2 Total value of exports USD '000' 62,558.5 67,788.6 24,032.8 73,367.2 11,075.2

Source: Tanzania Revenue Authority, and Bank of Tanzania computations

Services account 81.2 84.8 89.5 97.2 107.7
Note: Other exports mainly include souvenirs and spices; and p denotes
Receipts 139.5 134.0 146.7 164.7 178.6 provisional data
Payments 58.4 49.2 57.3 67.4 70.8

Goods and services -120.0 -7.6 -5.9 -27.3 -110.4

Exports of goods and services 202.1 201.8 170.8 238.0 189.6

Imports of goods and services (f.o.b) rose by
Imports of goods and services 322.1 209.4 176.7 265.3 300.0 13.1 percent to USD 300.0 million in 2018/19
Income account 2.1 1.8 7.7 9.1 11.5 (Table 5.5). Value of goods import increased by
Receipts 11.5 10.0 12.3 13.8 17.4
15.8 percent to USD 229.2 million, mainly driven
Payments 9.4 8.2 4.6 4.7 5.8

Current transfers 28.1 16.5 26.2 32.0 32.8 by intermediate and consumer goods. Much
Inflows 28.1 16.5 27.2 34.1 47.6 of the increase manifested in oil imports, which
Outflows 0.0 0.0 1.0 2.1 14.8
accounted for more than two thirds of intermediate
Current account balance -89.9 10.7 28.0 13.8 -66.1
goods imports. Consumer goods imports also
Source: Tanzania Revenue Authority, Bank of Tanzania, banks and Bank of
Tanzania computations
Note: p denotes provisional data
increased, contributed mostly by imports of food
and foodstuff, which include sugar, wheat and rice.
Exports of goods and services declined to USD Service payments increased to USD 70.8 million
189.6 million from USD 238.0 million in 2017/18, from USD 67.4 million, largely driven by transport
occasioned by low performance of goods payments. Transport payment, particularly freight,
exports, particularly cloves. Exports of cloves which accounted for the largest share of the
fell to USD 1.2 million from USD 59.2 million, on service payments, rose in line with the increase in
account of a significant decline in the volume of goods imports.
exports from 7,454 tonnes to 180 tonnes due
Table 5.5: Goods Imports by Major Categories
to the cyclical nature of the crop. Seaweeds
Millions of USD
exports also declined to 8,985.1 tonnes valued Category 2014/15 2015/16 2016/17 2017/18 2018/19
p

at USD 4.0 million from 12,030.4 tonnes valued Capital goods 91.2 89.9 36.2 54.7 56.7

Transport equipment 36.8 57.9 17.1 22.3 17.8

at USD 4.6 million (Table 5.4). Foreign exchange
Building and constructions 32.7 7.3 6.4 8.1 13.6
from services, which include tourism, amounted Machinery 21.7 24.7 12.7 24.3 25.3

to USD 178.6 million compared with USD 164.7 Intermediate goods 83.1 57.8 58.6 90.7 111.8

Oil imports 55.7 41.6 44.9 62.0 77.3

million, with much of the increase emanating from Industrial raw materials 27.3 16.2 13.7 28.7 34.5

tourism. Consumer goods 115.6 28.4 36.4 61.3 80.1

Food and food stuffs 53.9 0.5 13.2 24.0 36.9

All other consumer goods 61.6 27.9 23.2 37.3 43.2

Total (c.i.f) 289.8 176.1 131.2 206.6 248.6

Total (f.o.b) 263.8 160.2 119.4 197.9 229.2

Source: Tanzania Revenue Authority, and Bank of Tanzania computations

Note: p denotes provisional data

34
 Bank of Tanzania Annual Report 2018/19

Chart 5.11: Composition of Goods Imports

Percent

2016/17 2017/18 2018/19

44.7 43.9 45.0

32.2
29.7
27.7 27.6 26.5
22.8

Intermediate Goods Consumer Goods Capital Goods

Source: Tanzania Revenue Authority, and Bank of Tanzania computations

35
 Bank of Tanzania Annual Report 2018/19

6.0 Global and Regional Economic Performance

6.1 Output external demand, recession in Turkey, deepening

contraction in Iran, and weaker domestic demand
The global economy grew by 3.6 percent in 2018
in India. Output growth in sub-Saharan Africa is
compared with 3.8 percent in 2017. Growth
expected to pick up mainly driven by strong growth
expansion lost momentum in advanced economies
in non-oil resource rich countries due to scaling up
because of trade tensions and tariff hikes between
of investments in infrastructure.
the United States and China, decline in business
confidence, tightening of financial conditions, and Table 6.8: Global Real GDP Growth
policy uncertainties many economies. Percent
Projections

Advanced economies grew by 2.2 percent Group/Country 2017 2018 2019 2020

World 3.8 3.6 3.2 3.5

compared with 2.4 percent because of weakening
Advanced economies 2.4 2.2 1.9 1.7
consumer and business confidence resulting from United Kingdom 1.8 1.4 1.2 1.4
Germany 2.2 1.4 0.7 1.7
economic uncertainties and growing concerns Japan 1.9 0.8 0.9 0.4

about a ‘no-deal Brexit’. Growth in emerging United States 2.2 2.9 2.6 1.9
Euro area 2.4 1.9 1.3 1.6
markets and developing economies sub-region Emerging market and developing economies 4.8 4.5 4.1 4.7

slowed to 4.5 percent from 4.8 percent, to China 6.8 6.6 6.2 6.0
India 7.2 6.8 7.0 7.2
weakening global financial markets, particularly Sub-Saharan africa 2.9 3.1 3.4 3.6

in the second half of 2018. Real GDP growth Source: IMF, World Economic Outlook Update July, 2019

in China was 6.6 percent compared with 6.8

Table 6.1: Global Real GDP Growth
percent, following domestic regulatory tightening
Percent
to rein in debt, which constrain shadow financial Group/Country 2014 2015 2016 2017 2018
P

intermediation, and increase in trade tensions with World 3.4 3.4 3.2 3.8 3.6

the US. Sub-Saharan Africa grew by 3.1 percent Advanced economies 1.8 2.1 1.7 2.4 2.2

United Kingdom 2.9 2.2 1.9 1.8 1.4

from 2.9 percent, with non-oil resource intensive
Germany 1.6 1.5 1.9 2.2 1.4
countries contributing mostly to the growth, due Japan 0.0 1.1 0.9 1.9 0.8

to increase in public investment in infrastructure. United States 2.4 2.6 1.5 2.2 2.9

Euro area 0.9 2.0 1.8 2.4 1.9

Emerging market and developing economies 4.6 4.3 4.4 4.8 4.5
The global growth is expected to remain subdued China 7.3 6.9 6.7 6.8 6.6

in 2019, at around 3.2 percent, but picking up India 7.2 8.0 7.1 7.2 6.8

Sub-Saharan africa 5.1 3.4 1.4 2.9 3.1

to 3.5 percent in 2020. The slow growth in 2019
Source: IMF, World Economic Outlook Database April, 2019; and July, 2019
is due to negative effects of the US-China tariff Note:
Updates
p denotes provisional data
hikes, fading of the impact of US fiscal stimulus,
and weak investment and private consumption In the Southern African Development Community
in advanced and emerging markets economies. (SADC) region, output growth was recorded
In advanced economies, growth is projected to across the countries, except Angola and Namibia
slow down due to diminishing impact of US fiscal (Table 6.2). Tanzania was the fastest growing
stimulus, subdued demand and low productivity economy for three consecutive years, mostly
growth. In emerging markets developing driven by construction, agriculture, and transport
economies sub-region, output growth is projected and storage activities. Output growth slowed in
to be somewhat weak, mainly driven by lower Eswatini, Mozambique, Seychelles, and South
growth in China owing to negative effects of tariffs Africa because of contraction of manufacturing,
imposed by the US and a general weakening construction, tourism, and primary sector activities,

36
 Bank of Tanzania Annual Report 2018/19

respectively. Angola and Namibia recorded 6.2 Inflation

negative growth, largely due to a decline in the
Global inflation increased to 3.6 percent in 2018
performance of the oil sector following low level of
from 3.2 percent in 2017 due to high oil prices,
investment, and weak performance in secondary
particularly in the first nine months of 2018. In
and tertiary sectors, respectively.
advanced economies, inflation remained low,
albeit picking up, mainly driven by energy prices.
The East African Community region, output
Inflation picked mostly in the Euro Area and US.
growth averaged 5.6 percent in 2018 compared
Global inflation was projected to remain low in
with 4.4 percent in 2017. The strong growth
2019. In advanced economies, inflation was
was underpinned by agriculture, construction,
projected to decline to 1.6 percent from 2.0
services, transport and manufacturing activities.
percent.
All countries in the region recorded improvement
in output growth (Table 6.3).
In emerging markets and developing economies
sub-region, inflation edged up to 4.8 percent
Table 6.2: Real GDP Growth in SADC Region
Percent
from 4.3 percent, largely emanating from food
Country 2014 2015 2016 2017 2018
P prices. Inflation eased in sub-Saharan Africa to
8.5 percent from 11.0 percent in 2017 on account
Angola 4.8 3.0 -0.9 -0.2 -1.7
Botswana 3.2 -1.7 4.3 2.9 4.5
of a decline in prices of food, owing to improved
DRC 9.2 6.9 2.4 3.7 5.8 food supply attributed to favourable weather
Eswatini 2.5 1.1 0.0 1.9 0.6 in most countries (Table 6.4). Inflation was
Lesotho 3.4 2.5 3.1 0.1 1.1 projected to remain moderate at 4.9 percent in
Madagascar 3.3 3.1 4.2 4.3 5.2 2019 compared with 4.8 percent in 2018.
Malawi 5.7 3.0 2.3 5.2 4.0
Mauritius 3.6 3.5 3.9 3.8 3.8 Table 6.4: Global Inflation
Mozambique 7.4 6.6 3.8 3.7 3.4 Percent
P
2014 2015 2016 2017 2018
Namibia 6.4 5.3 1.1 -0.9 -0.1
World 3.2 2.8 2.8 3.2 3.6
Sychelles 6.2 5.7 4.5 5.3 4.1
Advanced economies 1.4 0.3 0.8 1.7 2.0
South Africa 1.5 1.3 0.6 1.4 0.8
United States 1.6 0.1 1.3 2.1 2.4
Tanzania 6.7 6.2 6.9 6.8 7.0 Euro Area 0.4 0.0 0.2 1.5 1.8

Zambia 5.0 2.9 3.7 3.4 3.7 Japan 2.7 0.8 -0.1 0.5 1.0

Zimbabwe 3.8 1.1 0.7 4.7 6.2 United Kingdom 1.5 0.1 0.7 2.7 2.5

Emerging markets and developing economies 4.7 4.7 4.3 4.3 4.8
SADC average 4.8 3.4 2.7 3.1 3.2
China 2.0 1.4 2.0 1.6 2.1
Source: National Statistics Offices and IMF, World Economic Outlook, April 2018
Note: p denotes provisional data; and DRC, Democratic Republic of the Congo India 5.9 4.9 4.5 3.6 3.5

Sub-Saharan Africa 6.4 7.0 11.3 11.0 8.5

Source: IMF, World Economic Outlook April 2019

Table 6.3: Real GDP Growth in EAC Region Note: p denotes provisional data

Percent
p In the SADC region, inflation eased to 8.2 percent
Country 2014 2015 2016 2017 2018
in 2018 from 9.9 percent in 2017, on account
Burundi 4.7 -4.0 -1.0 0.0 0.1
of a decline in prices of food and stability of
Kenya 5.3 5.6 5.8 4.8 6.0
the exchange rates (Table 6.5). Inflation in EAC
Rwanda 7.0 8.9 6.0 6.1 8.6
region remained below the region’s convergence
Tanzania 7.0 7.0 6.9 6.8 7.0
benchmark of not more than 8.0 percent,
Uganda 4.9 5.0 2.3 4.5 6.2
averaging 1.9 percent in 2018 (Chart 6.1). All EAC
EAC average 5.8 4.5 4.0 4.4 5.6
Source: National Statistics Offices and IMF, World Economic Outlook Database, countries recorded decline in inflation owing to
April 2019
Note: p denotes provisional data improved food supply and low cost of transport.

37
 Bank of Tanzania Annual Report 2018/19

Table 6.5: Inflation Rates in SADC Region South Africa remained Tanzania’s major trading
Percent
partner, accounting for 73.2 percent of the
p
Country 2014 2015 2016 2017 2018
Tanzania’s total intra-SADC trade in 2018, followed
Angola 7.3 10.3 32.4 31.7 20.3 by Democratic Republic of Congo (8.4 percent)
Botswana 4.4 3.1 2.8 3.3 3.2
and Zambia (6.4 percent). Tanzania major exports
DRC 1.0 1.0 18.2 41.5 31.0
to the SADC region were cigarettes, wheat flour,
Lesotho 4.0 5.0 6.2 5.6 5.1
juice, ceramic products, fish, glass, cement, soap,
Madagascar 6.1 7.4 6.7 8.1 7.3
footwear, and bricks. Major imports were motor
Malawi 23.8 21.9 21.7 11.5 9.2

Mauritius 3.2 1.3 1.0 3.7 3.2

vehicles, maize seeds, iron sheets, lubricants,
Mozambique 2.3 2.4 19.2 15.3 3.9 beer, apples and sugar.
Namibia 5.3 3.4 6.7 6.1 4.3

Seychelles 1.4 4.0 -1.0 2.9 3.7 As regards intra-EAC trade, Tanzania’s share
South Africa 6.1 4.6 6.3 5.3 4.7 increased by 12.7 percent to USD 752.0 million
Eswatini 5.7 5.0 -0.4 0.5 5.2
in 2018, as both exports and imports increased.
Tanzania 6.1 5.6 5.2 5.3 3.5
The trade balance was USD 141.8 million, lower
Zambia 7.8 10.1 17.9 6.6 7.5
than USD 193.3 in 2017, as increase in imports
Zimbabwe -0.2 -2.4 1.6 1.3 10.6
outweighed the increase in exports (Table 6.6).
SADC average 5.6 5.5 9.6 9.9 8.2
Specifically, Tanzania recorded trade surplus with
Source: National Statistics Offices and IMF, World Economic Outlook Database,
April 2019
Note: p denotes provisional data; and DRC, Democratic Republic of the Congo
all the EAC countries, with the exception of Kenya.
Exports to Kenya declined by 26.7 percent, while
imports increased by 23.9 percent, leading to a
Chart 6.1: Inflation Rates in EAC Region
Percent
trade deficit of USD 35.8 million compared to a
2017 2018 surplus of USD 90.2 million in 2017.
16.2
Table 6.6: Tanzania’s Intra-EAC Trade
Millions of USD
P
2014 2015 2016 2017 2018
8.0 8.0

5.6 Kenya
5.3 4.9
4.6
3.5 Exports 446.0 731.4 313.8 291.5 213.7
2.6
1.4 1.9
Imports 654.7 238.6 267.7 201.3 249.5

Trade balance -208.7 491.7 46.1 90.2 -35.8

-2.6 Uganda

Exports 73.3 50.3 58.2 27.5 105.8

Kenya Tanzania Uganda Burundi Rwanda EAC Average
Imports 48.0 39.4 30.7 34.1 53.2
Source: National Statistics Offices
Trade balance 25.4 10.8 27.5 -6.6 52.6

Burundi
6.3 Intra-SADC and EAC Trade
Exports 43.0 39.1 52.1 50.8 47.8

Tanzania’s total intra-SADC trade increased by Imports 0.6 1.1 0.8 0.2 1.0

2.3 percent to USD 1,607.1 million in 2018 from Trade balance 42.5 38.0 51.3 50.6 46.8

USD 1,571.5 million in 2017, and sustained trade Rwanda

Exports 35.8 41.2 6.5 60.5 79.6

surplus with SADC countries. The trade balance
Imports 3.2 1.1 1.1 1.3 1.4
was a surplus of USD 389.4 million, albeit lower Trade balance 32.6 40.0 5.4 59.2 78.2
than USD 445.5 million in 2017. In particular, Total exports to EAC 598.1 862.0 430.6 430.3 446.9

Tanzania was a net exporter to Angola, Botswana, Total imports from EAC 706.4 280.2 300.3 237.0 305.1

Trade balance -108.3 581.7 130.3 193.3 141.8

Democratic Republic of Congo, Malawi, South
Source: Tanzania Revenue Authority and Bank of Tanzania computations
Africa, and Zimbabwe. Note: p denotes provisional data

38
 Bank of Tanzania Annual Report 2018/19

Kenya remained the leading destination and

major source of Tanzania’s intra-EAC exports and
imports, respectively, followed by Uganda (Table
6.7). Tanzania’s major exports to the EAC region
were beans, maize grain, sisal rope, tea and
mosquito nets. Major imports were medicine and
soap.

Table 6.7: Tanzania’s Shares of Trade with

EAC Partner States
Percent
P
2014 2015 2016 2017 2018

Exports shares
Kenya 74.6 84.8 72.9 67.7 47.8
Uganda 12.3 5.8 13.5 6.4 23.7
Burundi 7.2 4.5 12.1 11.8 10.7
Rwanda 6.0 4.8 1.5 14.1 17.8

Imports shares
Kenya 92.7 85.1 89.1 84.9 81.8
Uganda 6.8 14.1 10.2 14.4 17.4
Burundi 0.1 0.4 0.3 0.1 0.3
Rwanda 0.5 0.4 0.4 0.5 0.5
Source: Tanzania Revenue Authority and Bank of Tanzania computations
Note: p denotes provisional data

39
 Bank of Tanzania Annual Report 2018/19

PART III

BANK OF TANZANIA OPERATIONS

41
 Bank of Tanzania Annual Report 2018/19

Corporate Governance
The Board of Directors of the Bank of Tanzania In addition to meetings for policy and administrative
adopted a calendar of activities for 2018/19 and actions, the Bank organized awareness sessions
conducted its operations effectively in fulfilling and capacity building initiatives to keep Board
its statutory role of policy decision-making. members abreast of new developments in areas of
Four Committees assisted the Bank’s Board of interest to the mandate of the Bank and facilitate
Directors in discharging its function. These are improvement of their oversight function.
Monetary Policy Committee, Audit Committee,
Bank Supervision Committee and Finance and In terms of composition of the Board of Directors,
Investment Committee. All Committees of the Mr. Joseph A. Meza was appointed as a board
Board met as required by the Bank of Tanzania member on 5th April 2019 to fill the vacant position
Act, 2006. The Monetary Policy Committee of the for non-executive director hailing from Zanzibar.
Board met among others to approve monetary
policy stance, while the Audit Committee carried During the year, the Complaints Handling Desk
out its duties under four major areas: Internal established by the Bank in 2015 continued to
Control, Financial Reporting, Internal Audit implement consumer protection measures by
and External Audit. Details of the activities are accepting, assessing and making determinations
indicated in Box 1. on the complaints lodged.

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 Bank of Tanzania Annual Report 2018/19

Box 1: Audit Committee Annual Activity Report for 2018/19

1.0 Establishment
The Audit Committee is established by the Board under Section 12(1) of the Bank of Tanzania
Act 2006 (the Act), to assist the Board in its oversight responsibility with respect to audit and
implementation of the financial reporting system and in compliance with the relevant legislation
and best international accounting standards. The Terms of Reference for the Audit Committee are
reflected in the Audit Committee Charter.

2.0 Membership
The Audit Committee consists of four members chosen from the Board of Directors, of which
three are non-executive and one is an executive member. Members of the Audit Committee on
rotational basis elect the Chairman of the Committee annually from the non-executive Directors of
the Committee. Members of the Audit Committee are shown in the Directors’ report for 2018/19.

3.0 Schedule of Meetings

The Audit Committee meets after every two months with additional meetings convened as and
when necessary. In 2018/19, the Audit Committee held four meetings, of which two were ordinary
and the other two, extra-ordinary.

4.0 Key Activities of the Committee

The responsibilities of the Audit Committee fall under four major areas: Internal Controls, Financial
Reporting, Internal Audit and External Audit. In discharge of its responsibilities during 2018/19,
the Audit Committee carried out activities, and the Chairman of the Committee reported the
deliberations to the Board of Directors, in line with the requirements of the provisions of section
12(2) of the Act. Activities carried out during the year are summarized below.

4.1 Internal Control

The Committee reviewed:
i. The Consolidated Year End Stock-taking Audit Report 2017/18;
ii. Integrated Financial Management System Audit Report 2017/18;
iii. The Consolidated Audit Report of Procurement Management Units 2017/18; and Internal
Audit Follow-up issues.

Audit Committee directives during the period under review related to audit of ICT issues; Financial
Reporting; Reserves Management and Domestic Operations; Banking and Currency Operations;
Procurement Operations; Payment, Clearing and Settlement Systems; and Construction Projects.

4.2 Financial Reporting

The Committee reviewed:
i. Bank of Tanzania Draft Annual Financial Statements for the Financial Year 2017/18;
ii. Audit Report on Draft Final Accounts for the year ended 30th June 2018;

43
 Bank of Tanzania Annual Report 2018/19

iii. Draft Housing Finance Project Financial Statements for the Year 2017/18; and
iv. Draft Housing Finance Project Implementation Report 2017/18.

4.3 External Audit

The Committee:
i. Considered the External Audit Plan for 2018/19 and Proposed Audit Fees;
ii. Considered Management Audit Report on the Audited Financial Statement for the Year
ended 30th June 2018; and
iii. Reviewed Housing Finance Project Draft Financial Statement for 2018/19.

4.4 Internal Audit

The Committee considered:
i. Internal Audit Activity Plan for 2018/19; and
ii. Appointment of Head of Internal Audit.

5.0 Way Forward

During 2018/19, the Committee adequately discharged its advisory role to the Board and most of
the directives given to Management were implemented.

The Committee directed Management to expedite implementation of audit observations that are
fully within their ability to accomplish and clear all long outstanding audit queries. The Committee
also directed Management to ensure fully compliance to the Public Procurement Act and its
Regulations.

Mr. Joseph. O. Haule

Chairman of the Audit Committee

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 Bank of Tanzania Annual Report 2018/19

Corporate Strategic Planning and In addition, the Bank continued to engage with
Performance banks, the general public and other stakeholders
through meetings and outreach programmes.
The Bank reviewed its strategic management
These engagements aimed at ensuring efficient
process with a view to improving formulation of
delivery of currency services, promoting better
objectives and measures at all levels. It is expected
understanding of the Bank’s role and functions,
that the new process will enhance efficiency in
strengthening collaboration between the Bank
strategic plan execution, performance tracking
and banks in the delivery of banking and currency
and reporting.
services, and obtaining relevant feedback from
Based on the new strategic management process, stakeholders. As a result, there has been noticeable
the Bank developed a two-year Corporate enhancement of compliance with the Bank’s clean
Strategic Plan (2019/20 – 2020/21). The plan is money policy among banks, relatively greater
aligned with the National Development Vision awareness of essential features of banknotes and
2025, the Zanzibar Vision 2020, National Five- financial services consumer rights, and effective
Year Development Plan II (2016/17 – 2020/21), handling of currency by the general public.
and Zanzibar Strategy for Growth and Reduction
of Poverty III (2016/17 - 2020/21). During 2018/19, the Government in collaboration
with the Bank of Tanzania introduced Treasury
Credit Guarantee Schemes Single Account (TSA) as its banking arrangement
The Bank continued to manage credit guarantee facility aimed at increasing efficiency in managing
schemes (CGS) on behalf of the Government. its cash resources.
The CGS comprised two facilities: Export Credit
Guarantee Scheme (ECGS) and Small and The Bank continued with its role of issuing and
Medium Enterprises Credit Guarantee Scheme distributing currency through head office and its
(SME-CGS)17. branches located in Arusha, Mwanza, Zanzibar,
Mbeya, Dodoma and Mtwara. In addition, the Bank
During 2018/19, the management of the schemes
continued to use Safe Custody Centres located
involves processing claims against the defaulted
in Kigoma, Sumbawanga, Tanga, Pemba, Tabora,
guaranteed loans and monitoring performance of
Bukoba, Shinyanga and Songea to improve
the guaranteed loans. As at the end of June 2019,
currency distribution in the country. The Bank is
the outstanding guarantees amounted to TZS
planning to extend currency distribution to other
62.14 billion and TZS 731.31 million under ECGS
parts of the country. A survey was conducted
and SME-CGS, respectively.
throughout the country to determine the demand
Banking and Currency Services for currency. Three potential location for additional
currency centres have been identified and will be
The Bank continued to provide banking services to
operational in the first half of 2019/20. These are
the Government of the United Republic of Tanzania
Musoma, Iringa and Morogoro.
and the Revolutionary Government of Zanzibar,
banks and other government institutions and the
Furthermore, in efforts to implement clean money
general public. The services provided include
policy and minimize currency mishandling, the
maintenance of accounts for governments, banks
Bank continued to monitor banks’ compliance
and government institutions.
to the circular requiring sorting banknotes before
17
The ECGS was established in 2002/03 to promote high value exports by
facilitating access to finance through issuance of credit guarantees on loans to taking them back into circulation or depositing at
exporters, while the SME-CGS was established in 2004/05 to promote small-
scale enterprises by facilitating access to finance from financial institutions in the the Bank of Tanzania’s Head Office, Branches or
country.

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 Bank of Tanzania Annual Report 2018/19

Safe Custody Centres. The Guideline for currency monetary policy transmission; financial inclusion,
handling is under review and awareness campaign financial innovations; exchange rate and currency
for proper handling of currency is ongoing in convertibility; public debt; workplace health and
different parts of the country. safety; lending rates; and private sector credit.

In September 2018, Tanzania and Zambia signed Finding of completed studies were published in the
a memorandum of understanding on currency Bank of Tanzania Research Newsletter of March
convertibility and repatriation. The overarching 2019 and posted on Bank of Tanzania website,
objective was to stimulate cross border trade Working Paper Series section. Correspondingly,
between the two countries. Specifically, the the Bank organized research seminars to share
arrangement allows the citizens of the two and discuss findings of studies on Strategies
countries undertaking economic activities along for Accumulating Foreign Exchange Reserves,
the border area to make payments for goods and Rationale and Modality of Buying Gold and
services from either country using currencies of Tanzanite by the Bank of Tanzania, Assessment
their respective home countries i.e. Tanzanian of Export Performance in Tanzania, Analysis of
Shilling and Zambia Kwacha. The milestone Economic Linkages of Tanzania Economy and
bodes well with the regional integration agenda in the World, Currency Convertibility within the
the SADC of promoting inter-regional trade. East Africa Community and Real Exchange Rate
Misalignment in Tanzania.
During the year, the Bank also operationalised its
role as the Government’s minerals warehouse, Moreover, the Bank in collaboration with the
whereby minerals are received for verification and Ministry of Natural Resources and Tourism,
storage, awaiting further action by concerned National Bureau of Statistics, Immigration
parties. Department and Zanzibar Commission for Tourism
conducted the 16th round of Visitors Exit Survey
Research and Publications to collect tourism information for improvement
of balance of payments and national accounts
The Bank of Tanzania continued to prepare
statistics as well as tourism-related services. In
and disseminate various economic reports and
addition, in association with Tanzania Investment
publications, among others, to provide updates
Centre and the National Bureau of Statistics,
of economic developments in the country and
the Bank conducted annual enterprise survey
the monetary policy stance. The reports include
to monitor foreign private capital flows covering
monetary policy statements; monthly, quarterly
companies with foreign assets and/or liabilities.
and annual economic reviews and BOT Research
Information obtained is used to improve balance
Newsletter.
of payments statistics, establish international
investment position, as well as in formulation and
To provide conceptual and empirical basis for
promotion of investment policy.
policy and decision-making, the Bank of Tanzania
conducted a number of studies in 2018/19 to
Corporate Services
investigate challenges facing the financial sector
and the economy in general. Most of the studies In addition to performing core functions, the
were demand-driven, arising from the Board of Bank pro-actively continued to engage with
Directors and Management of Bank of Tanzania, stakeholders and the general public through
and Monetary Affairs Committee of the East Africa various channels. The engagements were through
Community. Main areas of research comprised print, electronic and social media; seminars;

46
 Bank of Tanzania Annual Report 2018/19

conferences; workshops; face-to-face meetings; in economics to pursue master’s degree in

e-mails, letters and telecommunications; the economics under the Gilman Rutihinda Memorial
Bank’s website and annual exhibitions (Dar es Fund, which was established in memory of the late
Salaam Trade Fair and Farmers’ Exhibitions) at Governor Rutihinda—the third Governor of the
national and zonal levels. Bank. To date, a total of 35 students have been
sponsored under the Fund. During 2018/19, the
In 2018/19, the Bank conducted public awareness Bank also offer donations to various institutions
campaigns that covered different areas related and charities in the country to the tune of TZS 1.4
to core functions of the Bank. These included, billion.
but were not limited to, awareness on credit
reference systems, clean money policy and Regional Cooperation and Integration
currency security features, and investment in Initiatives
government securities. Decisions of the Monetary In the course of execution of its duties, the
Policy Committee (MPC) of the Bank of Tanzania Bank of Tanzania participated in regional and
Board of Directors were communicated on regular other international fora. The Bank cooperated
basis to executive officers of banks and financial with and implemented a number of regional
institutions. In addition, the Bank conducted economic programs under the East African
seminars to the Standing Parliamentary Community (EAC), Southern Africa Development
Committees, journalists, college and secondary Community (SADC), COMESA-EAC-SADC
school students, government officials and people Tripartite Initiatives, Association of African Central
with disabilities. Furthermore, the Bank continued Banks (AACB), Eastern and Southern Africa
to respond to questions raised by members of the Anti-money Laundering Group (ESAAMLG),
parliament, journalists, students and the general Alliance for Financial Inclusion (AFI), Financial
public. Stability Board (FSB), Islamic Financial Services
Board (IFSB), Financial Action Task Force (FATF),
As part of its corporate social responsibility, the International Accounting Standards Board (IASB),
Bank continued to provide scholarships and Basel Committee of Banking Supervision, and
donations to various needy groups in the society Macroeconomic and Financial Management
in line with policies in place. In 2018/19, full Institute of Eastern and Southern Africa (MEFMI).
scholarships were granted to four undergraduate
students and two master’s degree students In the EAC, the programs under implementation
under the Mwalimu Julius Nyerere Memorial include compliance with the 29 Basel Core
Scholarship Fund18. The 2018/19 sponsorship Principles self-assessment, assessment of
brought the total number of beneficiaries of the financial sector risks for the EAC region, and
Fund since its inception in 2009 to 40, of which implementation of the East African Monetary
28 pursued undergraduate degree programs and Union (EAMU) Protocol in order to realize an EAC
12 master’s programs. As at the end of 2018/19, Monetary Union by 2024. Key activities undertaken
19 beneficiaries of the scholarship had graduated by the Bank during 2018/19 include participation
and 21 were continuing students. The Bank in harmonization of monetary policy frameworks,
also continued to sponsor Tanzanians who have exchange rate policies, rules and practices
excelled in their bachelor’s degree programs governing financial sector supervision. The Bank
18
The Fund grant scholarships to best female Tanzanian students to pursue also participated in drafting of EAC Banking
undergraduate studies in mathematics and science in Tanzania’s accredited
universities. It is also partly used to sponsor both male and female Tanzanians top Certification Policy, its implementation strategy
students to pursue undergraduate studies in economics, information technology,
accounting and finance as well as best students intending to pursue Master’s and roadmap. These initiatives were implemented
programmes in those fields.

47
 Bank of Tanzania Annual Report 2018/19

under the Monetary Affairs Committee of the EAC participated in Regional Consultative Committee
central bank Governors. meetings and sub-sector stakeholders’ forums
with a view to inform policy makers on economic
The Bank participated in activities of the Southern and financial sector developments and provide
African Development Community Committee of necessary recommendations for policy decision.
Central Bank Governors (SADC-CCBG) and other
SADC forums including the SADC Peer Review
Panel and stakeholders’ meetings to assess the
implementation of SADC Finance and Investment
Protocol (FIP). The Bank also participated in a
workshop on Crisis Management and Resolution
for SADC partner states, which aims at harmonizing
procedures in the region.

In the COMESA-EAC-SADC Tripartite and AACB

initiatives, the Bank participated in various
forums by, among others, reporting progress
on implementation of various decisions and
safeguard aspirations of the country and those of
the regions.

In addition, during the year, the Bank made

subscriptions and contributions to various
regional boards and organizations including the
African Rural and Agricultural Credit Association
(AFRACA), African Association of Central Banks
(AACB), MEFMI, SADC-CCBG and African
Economic Research Consortium (AERC).

Branch Activities
The Bank through its branches in Arusha,
Dodoma, Mbeya, Mtwara, Mwanza and Zanzibar;
continued to provide banking, currency and
settlement services to the Governments,
public institutions, financial institutions and the
general public. In addition, branches monitored
economic performance in the designated
regions, conducted research on economic issues,
and carried out public awareness programs
on the functions of the Bank. The awareness
sessions included public education on currency
handling and security features of banknotes,
and sensitisation on opportunities available for
investing in government securities. Branches also

48
 Bank of Tanzania Annual Report 2018/19

PART IV

ANNUAL ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2019

49
Bank of Tanzania Annual Report 2018/19

50
 Bank of Tanzania Annual Report 2018/19

REPORT OF THE AUDITORS

DIRECTORS REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019

51
 Bank of Tanzania Annual Report 2018/19

REPORTS AND ANNUAL FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2019

Bank information ........................................................................................................................... 53

Report of the Directors for the year ended 30 june 2019 .............................................................. 54
Statement of Directors’ Responsibilities ..................................................................................... 71
Declaration of the Head of Finance ............................................................................................. 72
Independent Auditor’s Report ...................................................................................................... 73
Statement of Profit or Loss and other Comprehensive Income ................................................. 76
Statement of Financial Position ................................................................................................... 77
Statement of Changes in Equity .................................................................................................. 78
Statement of Cash Flows .............................................................................................................. 80
Notes to the Financial Statements ................................................................................................ 81

52
 Bank of Tanzania Annual Report 2018/19

BANK INFORMATION

Registered office Bank of Tanzania Head Office

2 Mirambo Street
11884 Dar es Salaam, Tanzania

Governor Prof. Florens D A.M. Luoga

Bank of Tanzania Head Office
2 Mirambo Street
11884 Dar es Salaam, Tanzania

Secretary to the Board Mr. Palloty M. Luena

Bank of Tanzania Head Office
2 Mirambo Street
11884 Dar es Salaam, Tanzania

BRANCHES
Arusha Bank of Tanzania Training Institute
Bank of Tanzania Building Capri Point Street
Makongoro Road P.O. Box 131, Mwanza
P.O. Box 3043, Arusha, Tanzania Tanzania

Dodoma Mbeya
Bank of Tanzania Building Bank of Tanzania building
2 NCC LINK Kadege Road
P.O. Box 2303, Dodoma, Tanzania P.O. Box 1203, Mbeya, Tanzania

Mtwara Mwanza
Bank of Tanzania Building Bank of Tanzania building
Mikindani Area Nyerere Road
P.O. Box 1446, Mtwara, Tanzania P.O. Box 1362, Mwanza, Tanzania

Zanzibar
Bank of Tanzania Building
Gulioni Area
P.O. Box 568, Zanzibar, Tanzania

AUDITOR
Controller and Auditor General
National Audit Office
Audit House, Ukaguzi Road
P.O. Box 950
41104 Tambukareli Dodoma, Tanzania

53
 Bank of Tanzania Annual Report 2018/19

REPORT OF THE DIRECTORS FOR THE YEAR ENDED 30 JUNE 2019

1. INTRODUCTION
The Directors present this report together with the audited financial statements for the financial year
ended 30 June 2019, which disclose the state of financial affairs of the Bank of Tanzania (the “Bank,
BoT”).

During the year, the Bank continued to implement its mandate as provided in the Bank of Tanzania
Act, 2006 to ensure sustainable national economic growth. The Bank carried out its mandate to issue
and distribute currency to the economy through its branch network and custody centres in some
parts of the country. During the year, the Bank operated six branches, a training institute and eight
safe custody centres.

The Bank provided information and data on economic activities in the country which included periodic
economic reports to its stakeholders.

ESTABLISHMENT
The Bank of Tanzania was established under the Bank of Tanzania Act, 1965 which was repealed in
1995 and 2006. The Bank currently operates under the Bank of Tanzania Act, 2006.

BANK’S VISION
The vision of the Bank is “attained macro-economic stability, modernized financial system and
expanded financial inclusion that supports Tanzania’s inclusive industrial economic growth.”

BANK’S MISSION
The Bank’s mission is “To maintain price stability and integrity of the financial system for inclusive
economic growth”.

2. STATUTE AND PRINCIPAL ACTIVITIES

Bank of Tanzania is the Central Bank of the United Republic of Tanzania comprising Tanzania Mainland
and Zanzibar and is wholly owned by the Government of the United Republic of Tanzania. The Bank
discharged its obligations as provided in the Bank of Tanzania Act, 2006.

Functions and objectives of the Bank are to:

• Formulate, implement and be responsible for monetary policy, including foreign exchange rate
policy, issue currency, regulate and supervise banks and financial institutions including mortgage
financing, development financing, lease financing, licensing and revocation of licenses and to
deal, hold and manage foreign exchange reserves of Tanzania;

• Compile, analyse and publish the monetary, financial, balance of payments statistics and other
statistics covering various sectors of the national economy;

• Regulate, monitor and supervise the payment, clearing and settlement systems;

• Act as a banker and fiscal agent of the Government of the United Republic of Tanzania and the
Revolutionary Government of Zanzibar (the “Governments”); and

• Ensure the integrity of the financial system, support the general economic policies of the
Government, and promote sound monetary, credit and banking conditions conducive to
sustainable development of the national economy.

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 Bank of Tanzania Annual Report 2018/19

REPORT OF THE DIRECTORS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

3. RESOURCES AND STRENGTHS

The Bank possesses adequate resources and human capacity to implement its mandates as provided in
the law. The Bank uses its human, financial and technological resources to achieve its strategic objectives.

The Bank has adequate financial resources to performance its mandates. The Bank has been generating
revenue that covered all operating expenses and other support provided to stakeholders. This has given
it autonomous to discharge its mandates without seeking support from shareholders. The profitable
operations have helped the Bank to accumulate adequate reserves while paying adequate return to its
shares through dividend payments.

The Bank has highly skilled, committed, motivated and competent staff dedicated to a long-term career.
Management adheres to good governance principals and promotes good labour relations that provides
conducive environment to discharge its mandates. The Bank develops Corporate Plan which identifies
strategic objectives in order to perform its mandates. From its strategic perspective, the Bank enhances
its financial position by improving management of its resources through prioritisation of initiatives,
implementing initiatives within the available financial resources to generate adequate income to support
its operations. On technological side, the Bank has modernized its operations by adopting modern
technology to improve its day-to-day operations. Further, the Bank has strategically located branches and
safe custody centres, which facilitate efficient banking services.

The Bank has also undertaken various reforms that contribute to the attainment of its objectives. This
include the on-going modernisation of the monetary policy framework and payment systems. These
efforts are expected to improve the efficiency and effectiveness of the monetary policy implementation
and reduce costs to customers thus improving the financial services access.

4. REVIEW OF THE BANK’S PERFORMANCE

During the year, the Bank implemented a five-year Strategic Plan 2018/19 – 2022/23 which identified strategic
objectives to be implemented. Annual action plans have been developed to facilitate implementations
of the objectives. The Plan was formulated and implemented through Balanced Scorecard system and
Performance Measurement Process (PuMP) techniques, respectively. It embraced the Bank’s statutory
mandate as stipulated in the Bank of Tanzania Act of 2006 of maintaining price stability and promoting
stability of the financial system. The Plan also considered broad Government macroeconomic objectives
in which the Bank could make significant contribution.
During the year the Bank achieved a number of milestones as indicated by key performance measures
(KPIs) and targets below;

Basing on three broad goals of maintaining price stability, promoting integrity and stability of the financial
system and strengthening corporate governance, the Bank’s performance revealed the following:

(a) Maintaining price stability

This entails keeping monetary conditions consistent with low and stable core inflation. The target is to
attain and maintain a single digit and stable core inflation. The Bank had set the target to maintain core
inflation not exceeding 5 percent levels and headline inflation not exceeding 8.0 percent throughout the
period to the end of June 2019.

Annual inflation for all consumers goods and services excluding food and energy (core inflation) in June 2019
was 3.4 percent (June 2018:1.6 percent). Core inflation has continued to be low and stable, explained largely
by stability in the value of Tanzanian shilling against major currencies, improvement in domestic power supply,
prudent monetary policy and fiscal consolidation. The Bank will continue to monitor risks to core inflation that

55
 Bank of Tanzania Annual Report 2018/19

REPORT OF THE DIRECTORS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

4. REVIEW OF THE BANK’S PERFORMANCE (Continued)

may arise and take appropriate actions to ensure that core inflation remains within the target range of 0 to
5 percent.
Headline inflation recorded an increase to 3.7 percent in June 2019 from 3.4 percent recorded in June
2018 but remained below the medium target of 5.0 percent. The increase in headline inflation was due to
increase in the prices of some food items.
The target included maintaining official foreign reserves sufficient to cover at least 4.0 months of projected
imports of goods and services. As at the end of June 2019, the Bank had foreign official reserves sufficient
to cover 4.3 months of imports of goods and services which was within the target of 4 months but
below the 6.1 months recorded at the end of June 2018. The observed decline in the level of official
foreign reserves during 2018/19 was attributed to utilization of the reserves through payment of ongoing
infrastructure projects mainly; construction of standard gauge railway, acquisition of aircrafts, construction
of Rufiji hydroelectric power dam and external debt services.

(b) Promoting integrity and stability of the financial system

Enhance Resilience and Stability of the Financial System
Financial stability is defined as a smooth operation of the system of financial intermediation between
households, firms and the Governments through a range of financial institutions as evidenced by an
effective regulatory infrastructure, well developed financial markets and effective and sound financial
institutions. The financial stability is measured by financial stability index and the target is that the index
should not deviate from its normalized historical mean within a band of -3 and +3, that is (-3<FSSI<3).
During the year, the Bank strengthened legal, regulatory and supervisory frameworks by ensuring resilient
banking system through alignment of the frameworks with best international standards and practices;
and adopted appropriate tools for monitoring resilience of the financial system. As a result, the Financial
System Soundness Index (FSSI) hovered around historical mean value (the band of -3 and +3) implying
that there were no major disruptions in the financial system. However, in the recent years, the index has
turned into a negative territory mainly due to high level of non-performing loans (NPLs), slowdown in
credit growth coupled with declining yields in government securities, which exerted pressure on banks’
interest earnings. The banking sector remained adequately capitalised despite persistence of credit risk
challenges in aggregate terms with core capital well above minimum requirement during the period ended
June 2019. Capital Adequacy Ratio for banking sector was 16.23 percent against the minimum target of
10 percent.
Improve Efficiency of Banking and Currency Services
The Bank promoted payment systems that are safe, convenient, available, timely and affordable; and
adopted Clean Money Policy. The outturn of these initiatives lead to achieving the target of currency
processing lag of less than a month for higher denomination; while cheque were received and processed
within settlement period of T+1; throughout the year.
(c) Enhance Usage and Efficiency of Financial Services
This entailed increasing the proportion of adult population accessing formal financial services through
creation of enabling regulatory environment to facilitate mitigation of barriers to financial inclusion. The
intended result for this objective is to have a large proportion of adult population using formal financial
services.
The percentage of adult population with access and use of formal financial services through mobile phone
reached 75.8 percent by June 2019. Positive development on the usage of financial services resulted from
introduction of Digital Financial Services, such as Government revenue collection, various fees and fines
and provision of Micro loans such as (Vodacom M-Pawa, Airtel Timiza, Tigo Nivushe and Halotel Haloyako).

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REPORT OF THE DIRECTORS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

4. REVIEW OF THE BANK’S PERFORMANCE (Continued)

Further, introduction of agency banking and mobile money technology prompted availability of wider range
of financial products for Tanzanians with impact of increasing the saving culture.

New FinTech product such as Quick Response (QR) Code solution through Master pass and MVisa
technologies have been implemented through Merchants and Small businesses to facilitate easy usage of
financial services. Moreover, the Bank supports Payment Service Providers in implementation of merchant
payment solutions that allow merchant payments using mobile financial services to avoid cash-out in
making payments. This will enable consumers to avoid cash-out fees that tend to be very high. This further
promoted usage.

The country has made significant progress on enhancing access to financial service. According to Fin-
scope Survey of 2017, the percentage of people with access to financial services within 5 kilometers
has increased to 86 percent from 45 percent attained in 2013. The trend is because of technological
advancement, financial innovations that offer greater range of secure and affordable financial products and
services as well as appropriate policy and regulatory framework put in place by the Bank.

The improvement in access to finance is a result of commitment and contribution received from various
stakeholders; growth of mobile money, interoperability of mobile financial services; payment systems
infrastructure; enactment and enforcement of National Payment System Act. Other contributing factors
include:
• The decision by regulators and MNOs to remove two stage registration requirements, allowing
automatic registration of m-wallets at Sim card registration stage;
• Availability of identification documents led by voters’ registration card, which enabled more people
to register for m-wallets;
• Availability of low cost handsets, enabling majority of people, especially in rural areas, to own a
mobile handset.

(c) Strengthening corporate governance

Improve work environment and use of technology
This objective entails acquiring and maintaining adequate and safe facilities and working tools, adopting
regulations, policies and good practices that bring about fairness, trust, inclusiveness, cooperation and
information sharing amongst staff. It also involves developing and implementing fair performance and
reward management practices.

During the period, the Bank acquired and maintained adequate and safe facilities and working tools, and
adopted appropriate regulations, policies and best work practices. In addition, the Bank enhanced its key
business processes and put in place relevant and secure technologies with a view to improving efficiency
and effectiveness in service delivery. Business system availability during the period was 98.97 percent
against the performance target of at least 97.5 percent.

Capacity building
To improve knowledge and skills of employees, the Bank continued to address skills requirements that
match the needs of the Bank, through annual corporate training plan and provision of adequate budget.
Learning opportunities were accorded to staff with a view to enhance their competences to execute the
Bank’s core functions. During the period the Bank continued to attract and retain highly skilled, committed,
motivated, and competent staff. The level of employee satisfaction with the work environment is
expected to continue rising up on effective implementation of a number of improvement initiatives
derived from the survey conducted in July 2018.

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REPORT OF THE DIRECTORS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

4. REVIEW OF THE BANK’S PERFORMANCE (Continued)

Enhance Risk Management
During the year, the Bank promoted organizational-wide adherence and compliance with relevant
policies, laws, regulations, guidelines and directives. Risk awareness and culture was also promoted
across the Bank. As a result, all risks in the red level were reduced to amber, yellow and some to
green levels.

Improve Financial Performance

The Bank continued to generate sufficient income and fostered effective allocation and utilization of
resources. Effective monitoring and control of budget expenditure was also instituted successfully.
As a result, the Bank had generated sufficient revenue to cover expenditure commitments throughout
the period.

Bank’s engagement with external stakeholders

The Bank continued to nurture its relationship with external stakeholders, seeking to enhance
stakeholders understanding, support and feedback on the Bank’s undertakings. It endeavoured to
address stakeholders’ needs, expectations and provide timely responses to stakeholders’ inquiries.

As a result, the public perception and customer satisfaction surveys conducted during the period
in all Bank offices (Head Office and branches) indicated that the Bank’s stakeholders were highly
satisfied with their interactions they had with the Bank.

Enhance Regional and International Policy Convergence

The Bank continued to implement the agreed regional and international policy decisions and
benchmarks. This involved aligning and harmonizing existing policy, regulatory and supervisory
frameworks with the agreed standards and benchmarks. As a result, the overall policy convergence
towards the agreed regional and international convergence criteria was 90.0 percent as of end June
2019, which was above the set Policy Convergence Index of 80 percent.

Public education programs

The Bank participated in various public education programs that were aimed at sensitizing the public
on the roles and functions of the Bank. In addition, the Bank participated in various fora including
Saba Saba and Nane Nane exhibitions to disseminate information and provide public awareness on
its operations in areas of roles and functions of the Bank including awareness on the bank notes and
coins handling and their respective security features.

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REPORT OF THE DIRECTORS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

5. CORPORATE GOVERNANCE

Members of the Board of Directors other than the Governor and Deputy Governors are appointed
by the Minister for Finance of the United Republic of Tanzania, while the latter are appointed by the
President of the United Republic of Tanzania. The following Directors served in the Board during the
year.

Date of
No. Name Position Age Discipline Nationality
Appointment
1. Prof. D.A.M. Luoga Governor and 60 Lawyer 4 January 2018 Tanzanian
Chairman of the
Board
2. Mr. Julian B. Raphael Deputy Governor 63 Economist 26 January 2016 Tanzanian
3. Dr. Yamungu M. Kayandabila Deputy Governor 47 Economist 31 May 2017 Tanzanian
4. Dr. Bernard Y. Kibesse Deputy Governor 52 Economist 31 May 2017 Tanzanian
5. Mr. Khamis M. Omar Member 53 Finance 20 April 2006 Tanzanian
6. Ms. Mary N. Maganga Member 52 Economist 1 June 2017 Tanzanian
7. Prof. Nehemia E. Osoro Member 72 Economist 1 June 2017 Tanzanian
8. Mr. Joseph O. Haule Member 63 Economist 1 June 2017 Tanzanian
9. Mr. Geoffrey I. Mwambe Member 44 Economist 1 June 2017 Tanzanian
10. Mr. Joseph A. Meza 1
Member 61 Economist 5 April 2019 Tanzanian
11. Mr. Palloty M. Luena 2
Secretary 55 Lawyer 3 September 2018 Tanzanian
KEY
1. Appointed on 5th April, 2019
2. Appointed on 3rd September, 2018

In accordance with Section 9(2) (c) of the Bank of Tanzania Act, 2006, a representative of the Ministry of
Finance and Planning of the United Republic and Principal Secretary to the Treasury of the Revolutionary
Government of Zanzibar are ex-officio members.

Bank of Tanzania ascribes to the highest standards of corporate governance. The Bank through the Board
of Directors and Management upholds and practices the principles of sound corporate governance.

To this end, the Bank of Tanzania Act, 2006, has provided a framework for ensuring application of sound
corporate governance principles and best practices by the Bank’s Board of Directors and its Committees
and Management in the course of managing the day to day affairs/operations of the Bank as summarised
below:
(i) In terms of the provisions of Section 9(1) of the Bank of Tanzania Act, 2006, the Board of Directors of
the Bank is the supreme policy making body, and the approving authority of the corporate plan and
budget of the Bank;
(ii) Four Committees are currently assisting the Bank’s Board of Directors in the discharge of its functions.
These are the Monetary Policy Committee, Audit Committee, Banking Supervision Committee and
Finance and Investment Committee.

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5. CORPORATE GOVERNANCE (CONTINUED)

(a) Monetary Policy Committee
The Monetary Policy Committee was established under the provision of Section 12(1) of the Bank of
Tanzania Act, 2006. Its membership comprises of the Governor as Chairman, the Deputy Governors, and
six Non-Executive Directors. The Monetary Policy Committee assists the Board in the review of monetary
policy targets; review of research papers and major economic and monetary policy changes before
adoption by the Board. The Committee’s mandate also covers review of the Governments’ revenue and
expenditure patterns; review of debt management operations and statutory reports of the Bank related to
implementation of monetary and financial policies.

The Members of the Monetary Policy Committee that served during the year ended 30 June 2019 were as
follows:
No Name Position Discipline Nationality
1. Prof. Florens D.A.M. Luoga Chairman Lawyer Tanzanian
2. Mr. Julian B. Raphael Member Economist Tanzanian
3. Dr. Yamungu M. Kayandabila Member Economist Tanzanian
4. Dr. Bernard Y. Kibesse Member Economist Tanzanian
5. Ms. Mary N. Maganga1 Member Economist Tanzanian
6. Mr. Khamis M. Omar2 Member Finance Tanzanian
7. Prof. Nehemia E. Osoro Member Economist Tanzanian
8. Mr. Joseph O. Haule Member Economist Tanzanian
9. Mr. Geoffrey I. Mwambe Member Economist Tanzanian
10. Mr. Joseph A. Meza Member Economist Tanzanian
11. Mr. Palloty M. Luena Secretary Lawyer Tanzanian
KEY
1. Attends by invitation
2. Attends by invitation

(b) The Audit Committee

Established under the provision of Section 12(1) of the Bank of Tanzania Act 2006, the Audit Committee is
largely composed of Non-executive Directors. The Chairman of the Committee is a Non-executive Director.
The Deputy Governor-Administration and Internal Control is the only Executive member of the Committee.
The Terms of Reference for the Audit Committee cover four major areas, namely, Internal Control, Financial
Reporting, Internal Audit and External Audit.
The Audit Committee’s mandate under Internal Control covers evaluation of control environment and
culture; the adequacy of the internal control systems and compliance with International Financial Reporting
Standards (“IFRS”) in the preparation of financial statements; the overall effectiveness of the internal
control and risk management framework. The Committee also reviews Management requests for write off/
write back of items from the books of accounts and reviews the effectiveness of the system for monitoring
compliance with laws and regulations.
The mandate relating to financial reporting requires the Audit Committee to review significant accounting
and reporting issues and their impact on the financial reports and ensure current financial risk areas
are managed appropriately. The Committee also ensures adequacy of the financial reporting process,
reviews draft financial statements before submission to the external auditors for audit and the audited
financial statements before approval and adoption by the Board. With regards to External Audit, the Audit
Committee is informed by the independent external auditor (National Audit Office of Tanzania) about the
scope, approach and audit deliverables as well as reviews and approves the proposed audit fee.

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5. CORPORATE GOVERNANCE (CONTINUED)

(b) The Audit Committee (continued)
The Committee’s mandate on Internal Audit covers review of the activities and resources of the internal
audit function; effectiveness, standing and independence of internal audit function within the Bank; review
of the internal audit plan; and follow up on implementation of internal audit findings and recommendations.
The Audit Committee reports to the Board of Directors.

The Members of the Audit Committee that served during the year ended 30 June 2019 were as follows:
No Name Position Discipline Nationality
1. Mr. Joseph O. Haule 1
Chairman Economist Tanzanian
2. Mr. Julian B. Raphael Member Economist Tanzanian
3. Prof. Nehemia E. Osoro Member Economist Tanzanian
4. Mr. Joseph A. Meza2 Member Economist Tanzanian
5. Mr. Geoffrey I. Mwambe Member Economist Tanzanian
6. Mr. Palloty M. Luena Secretary Lawyer Tanzanian

KEY:
1. Elected Chairman on 30th November 2018
2. Appointed on 5th April 2019

(c) Banking Supervision Committee

The Banking Supervision Committee was also established under the provision of Section 12(1) of the
Bank of Tanzania Act, 2006. Members of the Committee comprise the Governor who is the Chairman,
the Deputy Governors, Representative of the Ministry of Finance and Planning, Government of the United
Republic of Tanzania and Principal Secretary to the Treasury, Revolutionary Government of Zanzibar and
two Non-executive directors.

The Banking Supervision Committee is responsible for review of internal control and systems in banks and
other financial institutions; the Banking Supervision function; adequacy of the prevailing legal and regulatory
framework; operating performance of banks, financial institutions and bureau de change with a view to
ensuring safety and soundness in the banking system; financial stability reports before publication; and
on emerging supervisory issues. The Committee advises the Board on appropriate policy, legislative and
regulatory measures that promote a safe banking system and high supervisory standards and practices.

The Members of the Banking Supervision Committee that served during the year ended 30 June 2019
were as follows:

No Name Position Discipline Nationality

1. Prof. Florens D.A.M. Luoga Chairman Lawyer Tanzanian
2. Mr. Julian B. Raphael Member Economist Tanzanian
3. Dr. Yamungu M. Kayandabila Member Economist Tanzanian
4. Dr. Bernard Y. Kibesse Member Economist Tanzanian
5. Mr. Khamis M. Omar Member Finance Tanzanian
6. Ms. Mary N. Maganga Member Economist Tanzanian
7. Prof. Nehemia E. Osoro Member Economist Tanzanian
8. Mr. Joseph O. Haule Member Economist Tanzanian
9. Mr. Geoffrey I. Mwambe Member Economist Tanzanian
10. Mr. Joseph A. Meza Member Economist Tanzanian
11. Mr. Palloty M. Luena Secretary Lawyer Tanzanian

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REPORT OF THE DIRECTORS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

5. CORPORATE GOVERNANCE (CONTINUED)

(d) The Finance and Investment Committee
The Finance and Investment Committee was established under the provision of Section 12 (1) of the Bank
of Tanzania Act, 2006. Members of the Committee include the Governor who is the Chairman, the Deputy
Governors and four Non-Executive Members of the Board.

The Finance and Investment Committee is responsible for review of the proposed budgets, reallocation
of funds involving capital expenditure and supplementary budget requests; quarterly budget performance
reports; Financial Regulations and Staff By-Laws; requests for disposal of immovable assets; and Bank’s
Annual Corporate Plan. The Committee also reviews the appropriateness of the Bank’s investment policy
and assets allocation strategy, Risk Management Framework for the Bank’s operations and Project
Management framework.

The Members of the Finance and Investment Committee that served during the year ended 30 June 2019
are as follows:

No Name Position Discipline Nationality

1. Prof. Florens D.A.M. Luoga Chairman Lawyer Tanzanian
2. Mr. Julian B. Raphael Member Economist Tanzanian
3. Dr. Yamungu M. Kayandabila Member Economist Tanzanian
4. Dr. Bernard Y. Kibesse Member Economist Tanzanian
5. Prof. Nehemia E. Osoro Member Economist Tanzanian
6. Mr. Joseph A. Meza Member Economist Tanzanian
7. Mr. Joseph O. Haule Member Economist Tanzanian
8. Mr. Geoffrey I. Mwambe Member Economist Tanzanian
9. Mr. Palloty M. Luena Secretary Lawyer Tanzanian

6. MEETINGS
The Board held eight (5) meetings during the year ended 30 June 2019. In addition, there were various
meetings of the Board Committees. All members of the Board were able to substantially devote their time
required for the Board and Committee meetings. Below is a summary indicating the number of meetings
attended by each members of the Board from 1 July 2018 to 30 June 2019.

Number of meetings KEY

Board MPC BSC AC FIC Board:
Board of Directors
No Number of meetings 6 6 1 4 4
MPC:
Names
Monetary Policy Committee
1. Prof. Florens D.A.M. Luoga 4 4 1 N/A 3
2. Mr. Julian B. Raphael 5 4 1 3 2 BSC:
Banking Supervision Committee
3. Dr. Yamungu M. Kayandabila 6 5 1 N/A 4
4. Dr. Bernard Y. Kibesse 4 5 1 N/A 1 AC:
Audit Committee
5. Ms. Mary N. Maganga 5 4 1 N/A N/A
6. Mr. Khamis M. Omar 4 4 1 N/A N/A FIC:
7. Prof. Nehemia E. Osoro 6 5 1 4 4 Finance and Investment
Committee
8. Mr. Joseph O. Haule 3 5 1 4 3
9. Mr. Geoffrey I. Mwambe 3 4 1 3 1 N/A:
10. Mr. Joseph A. Meza1 1 1 - 1 2 Not applicable

11. Mr. Palloty M. Luena2 2 6 1 2 2

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REPORT OF THE DIRECTORS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

6. MEETINGS (CONTINUED)
The Board and its committees meet after every two months with additional meetings convened as and
when necessary. During the year, the Board and its committees met to discuss and decide on various
business activities. The Board’s Committees recommend key business decisions to the Board for approval.

7. INDEPENDENCE
All Non-Executive Directors are considered by the Board to be independent both in character, judgment
and free of relationships or circumstances, which could affect their judgment.

8. CAPITAL STRUCTURE
Section 17 of the Bank of Tanzania Act, 2006 provides the level of authorised share capital of the Bank to
be TZS 100,000,000,000, (one hundred billion Tanzanian Shillings). This amount may be increased by such
amount as may be determined by the Board and authorised by the Minister of Finance and Planning by
Notice published in the Government Gazette. The share capital of the Bank is subscribed and held only by
the Government of the United Republic of Tanzania.

Due to the nature of the Bank’s business and statutory requirements, the whole capital is held in the form
of equity. Different classes of reserves have been prescribed under section 18(1) of the Bank of Tanzania
Act, 2006 and Note 40 to these financial statements. The movement of the capital during the year is
reflected under the Statement of Changes in Equity.

9. RELATIONSHIP WITH STAKEHOLDERS

The Bank recognises the importance of addressing the needs of its key stakeholders in order to add
value, satisfy their needs and expectations to fulfil its mission. The Bank’s key stakeholders include the
Governments, banks and non-bank financial institutions, development partners, general public and staff.
The Bank is committed to delivering value to its stakeholders through better services and good customer
care while maintaining good relationship in its engagements.

Accordingly, the Bank fulfils its mandate by delivering the following services to meet its stakeholders’
needs and expectations:

(a) Issuance of bank notes and coins: The Bank provides secure, adequate, durable and portable bank
notes and coins; ensure prompt circulation of currency through its network of branches and safe
custody centres throughout the country; and promote public awareness on the currency handling
and security features;

(b) Banking services: The Bank promptly facilitates payments, settlements and clearing of payment
instruments for the Governments and financial institutions. Further, the Bank provides safe deposit
custody for the Governments and financial institutions; and

(c) Price stability: The Bank formulates and executes monetary policy that leads to stable domestic
prices; provide policy advice to the governments; disseminate economic reports; ensure stable
exchange rates; and conduct government securities auctions;

(d) Financial stability: The Bank promotes the stability of the financial system through effective
regulation and supervision of banking system; provide safe and efficient payment systems; and
promote public access to the financial services; and

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REPORT OF THE DIRECTORS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

9. RELATIONSHIP WITH STAKEHOLDERS (Continued)

(e) Internal customer requirements: The Bank attracts and retains high calibre staff with integrity,
competency and accountability and provides conducive working environment and career development
opportunities to its staff.

10. CASH FLOW PROJECTION

Due to the nature of the Bank’s operations most of the cash projections indicate that future cash flows will
mostly be generated from operating, investing and financing activities and that the Bank will continue to
be a going concern within the foreseeable future.

11. MANAGEMENT
Section 13(1) of the Bank of Tanzania Act, 2006 vests the Management of the Bank and the direction of its
business and affairs to the Governor. The Governor is required to discharge such functions and direction,
in conformity with the policies and other decisions made by the Board.

The law further provides that the Governor to be assisted by three Deputy Governors. The Deputy Governors
head various functions under them, which involve thirteen directorates, five independent departments, six
branches and the Bank’s Training Institute.

12. FUTURE DEVELOPMENT PLANS

Inflation is expected to evolve around the medium-term target of 5.0 percent, supported by adequate food
supply, good weather, stability in power supply, and sustained prudence in fiscal and monetary policies.

The Bank will continue to implement accommodative monetary policy, with broad money supply projected
to grow at 10.0 percent, aiming to support more growth of credit to the private sector of about 13.5
percent, while ensuring stability of the short-term interest rates.

The IBCM rate is expected to evolve within ±2.5 percent. The Bank will also continue to ensure that foreign
exchange reserves are maintained above the country’s benchmark of a minimum of 4 months of imports of
goods and services. This is critical given the ongoing public investments in infrastructure developments
and rising demand for external debt service.

Review NPS regulatory framework in order to enhance safety and efficiency of payment systems,
implement Tanzania Instant Payment System (TIPS) to enhance interoperability of mobile financial
services, implementation of Financial Service Registry to map financial access points to address proximity
to financial services, in collaboration with other stakeholders,

Implement financial literacy programs under NFIF and implement Financial Consumer Protection
Regulations so as to promote confidence in using payments systems.

The Bank will continue to take measures to address high level of NPLs, including following -up
implementation and conduct impact assessment of the NPL guidance issued to banks in February 2018.
Close monitoring of Banks will be intensified to ensure that banks applies sound lending standards and
risk management practices to further reduce NPLs level, which is the source of capital erosion

In collaboration with Tanzania Bankers Association will finalize code of conduct, which will impose self-
regulatory mechanism to bankers, facilitating blacklisting of fraudulent bank officials, which are source of
bad loans; and will continue to encourage small and medium size banks to merge in order to overcome
capital and operational challenges.

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REPORT OF THE DIRECTORS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

12. FUTURE DEVELOPMENT PLANS (continued)

The Bank continues facilitating provision of efficient and even distribution of fit banknotes and coins and
the expeditious withdrawal of the unfit ones
Implement CBS enhancement of the existing system (short term solution) and develop system requirements
specifications aimed at replacement of the existing system by Financial Year 2022/23
Continue to build awareness on Treasury Single Account operations among members of BOT Management
and external stakeholders
Operationalization of Forecasting and Policy Analysis System (FPAS) alongside harmonization of the EAC
agreed financial and market conventions.
To improve business processes management with a view to increase organizational efficiency, productivity,
control and transparency in business operations.
Leverage use of technology in implementing human resources and administration operations to improve
services delivery.

13. RESULTS AND DIVIDENDS

During the year, the Bank operations registered an overall total comprehensive income of TZS 182,928.8
million (2018: TZS 163,004.9 million). The amount includes net unrealized gains on marketable securities
of TZS 46,887.7 million, and net revaluation gain on equity investments of TZS 3,869.0 million (2018:
TZS 1,586.3 million million). The Bank recorded an operating profit of TZS 122,591.0 million (2018: TZS
176,427.6 million). The reported profit includes net unrealized foreign exchange revaluation gains of TZS
3,077.3 million and net unrealized gain on foreign marketable securities of TZS 8,636.7 million. The Bank’s
accounting policy requires transfer of net unrealized revaluation gains or losses on foreign exchange and
financial assets measured at FVTPL to the foreign exchange revaluation reserve and Securities revaluation
reserve respectively. After appropriate adjustments of various funds/appropriations (statement of changes
in equity), the dividend amounting to TZS 250,000.0 million (2018: TZS 350,000.0 million) is payable to the
Government in compliance with the requirements of the Bank of Tanzania Act, 2006.

14. FINANCIAL PERFORMANCE FOR THE YEAR

(a) Financial results
The performance of the Bank is measured based on the achievements in implementing its core
functions as detailed in the Bank of Tanzania Act, 2006. The Bank needs to generate adequate
resources in order to support its operations and maintain its independence.
In the course of its operations, the Bank made a total comprehensive income of TZS 182,928.8
million (2018: TZS 163,004.9 million). The increase in total comprehensive income of 12.2 percent
is mainly attributed to income arising from increase in price valuation of Bank’s foreign investments.
(b) Financial position
Bank total assets decreased by TZS 2,794,137.7 million (15.1 percent) since 30 June 2018 compared
to increase of TZS 1,702,695.2million (10.1 percent) during the preceding year. The major areas of
decrease include: Cash and balances with central and other banks and foreign currency marketable
securities by TZS 956,813.9 million (16.6. percent) and TZS 1,446,709.7 million (22.2 percent),
respectively. The change of the balance in the items in the course of settlement was mainly due to
settlement of various transactions on clearing account at the year end. The decrease in total assets
is explained by corresponding decrease in foreign currency financial liabilities, BOT liquidity papers
and reclassification of URT government accounts resulted from operationalisation of Treasury Single
Account.

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REPORT OF THE DIRECTORS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

15. RISK MANAGEMENT AND INTERNAL CONTROL

The Board accepts final responsibility for risk management and internal control systems in the Bank. It is
the task of management to ensure that adequate internal financial and operational control systems are
developed and maintained on an ongoing basis in order to provide reasonable assurance regarding:
• The effectiveness and efficiency of operations;
• The safeguarding of the Bank’s assets;
• Compliance with applicable laws and regulations;
• The reliability of accounting records;
• Business sustainability under normal as well as adverse conditions; and
• Responsible behaviours towards all stakeholders.

The efficiency of any internal control system is dependent on the strict observance of prescribed measures.
There is always a risk of non-compliance of such measures by staff. Whilst no system, of internal control
can provide absolute assurance against misstatement or losses, the Bank’s system is designed to provide
the Board with reasonable assurance that procedures in place are operating effectively. The Bank ensures
that existing and emerging risks are identified and managed within acceptable risk tolerances.

16. KEY RISKS AND UNCERTAINTIES

The key risks that may significantly affect the Bank’s strategies and development are mainly financial,
operational and strategic. Below we provide a description of the operational and strategic risks facing
the Bank. The risks related to financial instruments have been disclosed under Note 43 of the financial
statements:

• Operational risk
Includes both financial and non-financial resulting from inadequate human resource and systems,
management failures, ineffective internal control processes, non-compliance, inadequate security and
adverse legal judgements. The main operational risks of the Bank during the year were:

• Human resource risk

The particular nature of the activities of the Bank necessitates specialised knowledge in many areas. The
Bank ensures that there is an adequate knowledge base for all specialised job requirements by investing
significantly in human resource development in terms of capacity building and practical exposure. The
Bank also organises workshops, seminars, conferences and job attachments to its staff to improve its
human resource requirements. It also revises regularly its staff retention scheme to compete with the
prevailing labour market.

• Business disruption and security risks

Risks related to failure to execute business processes and events that compromise the assets, operations
and objectives of the Bank. The risks might be due to lack of business continuity management, lack of
good practices or controls on the Bank’s activities.

The Bank addresses these risks inter alia through ensuring existence of Business Continuity Management
(“BCM”) plan and sound internal control system, which include operational and procedural manuals,
ICT security policies, back up facilities, contingency planning, and independent internal audit function.
Managing operational risk in the Bank is an integral part of day-to-day operations by the management.
Management, Internal Audit Function, Audit Committee and the Board, closely monitor this risk.

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16. KEY RISKS AND UNCERTAINTIES (CONTINUED

• Legal risk
Legal risk arises from any uncertainty of enforceability, whether through legal or judicial processes, of
the obligations of the Bank’s clients and counter parties. The Bank aims at minimizing such uncertainties
through continuous consultations with all relevant parties.

In mitigating this type of risk, the Bank ensures that all business agreements are contracted under
Standard Industry Contracts, e.g. International Swaps and Derivatives Association (“ISDA”), International
Securities Markets Association (“ISMA”), etc. Where substantially different contracts and substantive
changes to existing contracts are entered into, external lawyers are contracted. The Bank has in place a
clear procedure of the delegation of authorities. In addition, strict code of conduct and ethics is used to
minimise chances of causing legal disputes between the Bank and its counterparts.

• Strategic risk
This covers analytical and policy risk which is associated with economic and monetary policy formulation;
business risk which refers to the probability of loss inherent in the Bank’s operations and environment;
performance risk which is associated with formulation and execution of business plans and strategies;
and external risks which refer to threats from the external environment such as infrastructure disruption,
financial crime and computer viruses, political, social and economic changes. Similar to operational risk,
strategic risk may result into damage on the Bank’s reputation.

The Bank has an obligation to ensure that it performs its functions and maintains its reputation as a Central
Bank in line with requirements of the provision of Section 5(1) of the Bank of Tanzania Act, 2006.

In view of the above, the Bank’s Management ensures that it fulfils its fiduciary responsibilities. The Bank
adheres to the best practices and applies principle of sound corporate governance. It also ensures that all
relevant employees have clear understanding of the appropriate processes in respect of the best practices
and principles of good governance.

The Bank therefore, sets out policies and guidelines that govern sound functional operations within the
Bank. The performance of these policies and guidelines are periodically reported to different levels of the
Bank’s Management for control and compliance monitoring.

The top Management of the Bank has the necessary freedom and discretion to exercise central banking
functions. However, this freedom is exercised within the context of good governance and having regard to
a proper balance between accountability and the best interests of the Bank and its various stakeholders.

The function of the Bank of overseeing and ensuring the integrity of the financial system exposes it to
severe criticism whenever there is an incident of bank failure or systemic difficulty. The responsibilities of
the Bank regarding monetary policy, the National Payment System (“NPS”) and the issuing of notes and
coins also expose the Bank to a significant risk. The Bank adheres to international best practices and, to
this end, maintains close liaison with international peers. The Bank strives towards full compliance with
the principles for effective banking supervision as well as the core principles for systemically important
payment systems. The Board assessed the internal control systems throughout the financial year ended
June 2019 and is of the opinion that they met accepted criteria

67
 Bank of Tanzania Annual Report 2018/19

REPORT OF THE DIRECTORS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

16. SOLVENCY
The Board of Directors confirms that IFRS’s have been followed and that the financial statements have
been prepared on a going concern basis. The Board of Directors has reasonable expectation that the Bank
of Tanzania has adequate resources to continue carrying out its statutory activities for the near future.

17. EMPLOYEES WELFARE

(a) Management and employee’s relationship
The relationship between the Bank and its employees continued to be good. Employees complaints
raised during the year were resolved mainly through the use of consultative meetings/fora involving
the management, trade union and employees through workers council. As a result, healthy relationship
continued to exist between management and the trade union.

Complaints are resolved through meetings and discussions. Work morale is good and there were no
unresolved complaints from employees. The Bank provides a number of facilities aiming at improving the
working environment and living standards of its employees. Such facilities include medical services, gym
facilities, transport to and from work, housing facilities, employee training and development, leave travel
assistance and long service awards for employees as stipulated in the Staff By-Laws.

(b) Training facilities

The Bank has training facilities at the Bank of Tanzania Training Institute in Mwanza region. During the
year, the Training Institute conducted 93 (2018: 89) courses for the Bank of Tanzania Staff and Banking
Institutions. The Training Institute prepares annual training programs according to the Bank’s Corporate
Training Plan that caters for Bank’s staff. The Training Institute also designs and implements courses for
EAMU and Banking institutions in order to address gaps identified in the performance of their staff that
require training intervention. The Institute is also bestowed with training of specified courses for Southern
African Development Community (“SADC”).

(c) Medical Assistance

All members of staff with a maximum number of five beneficiaries for each employee were availed with
medical insurance services. During the year ended 30 June 2019 and 2018, National health insurance fund
provided these services.

(d) Health and safety

Effective health, safety and risk management is a priority for the Bank. The Bank’s safety management
system delivers a safe working environment by continuous and effective assessment. The Bank’s Medical
Committee and Bank’s Business Recovery Team (“BBRT”), respectively monitor health and safety
incidences of the Bank.

(e) Financial assistance to staff

The Bank provides various loans to employees in accordance with the Staff Bylaws and Financial
Regulations in force. These include house loans, motor vehicle loans, personal loans and computer loans.

(f) Persons with disabilities

Applications for employment by disabled persons are always considered, bearing in mind the aptitudes of
the applicant concerned.

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 Bank of Tanzania Annual Report 2018/19

REPORT OF THE DIRECTORS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

17. EMPLOYEES WELFARE (CONTINUED)

(f) Persons with disabilities (Continued)
In the event of members of staff becoming disabled, every effort is made to ensure that their employment
with the Bank continues and appropriate training is arranged. It is the policy of the Bank that training,
career development and promotion of disabled persons should, as far as possible, be identical to that of
other employees

(g) Employee’s pension plan

The Bank has an arrangement whereby the employer and employees make monthly contributions to
pension schemes. Such contributions are mandatory and aggregate to twenty percent of the employee’s
basic salary. The detail of benefits plan is provided under Summary of Significant Accounting Policies in
Note 3 to the financial statements.

(h) Voluntary agreement and worker’s council

The Bank has a voluntary agreement with Tanzania Trade Union of Industrial and Commercial Workers to
enhance good industrial relation, employee welfare and retain high calibre employees.

18. GENDER PARITY

The Bank is an equal opportunity employer. It gives equal access to employment opportunities and
ensures that the best available person is appointed to any given position free from discrimination of any
kind and without regard to factors like gender, marital status, tribes, religion and disability, that does not
impair ability to discharge duties. As at 30 June 2019 and 2018, the Bank had the following distribution
of employees by gender.
Gender 2019 % 2018 %
Male 756 61.8 771 61.1
Female 467 38.2 490 38.9
Total 1,223 100.0 1261 100.0

19. RELATED PARTY TRANSACTIONS

All related party transactions and balances are disclosed in Note 50 to these financial statements. The
directors’ emoluments and key management personnel have been disclosed in Note 50 to the financial
statements.

20. ENVIRONMENTAL CONTROL PROGRAM

The Bank monitors the impact of its operations on the environment, which is mainly with power, water
and the generation of waste. The Bank minimises the impact through better use of its premises and inbuilt
facilities to ensure that there is proper waste management.

21. CONTRIBUTION AND SUBSCRIPTIONS

The Bank made various subscriptions and contributions to various organisations which included the
African Rural and Agricultural Credit Association (“AFRACA”); African Association of Central Banks
(AACB); Macroeconomic and Financial Management Institute (“MEFMI”); Capital Markets and Securities
Authority (“CMSA”); Deposit Insurance Board (“DIB”); Financial Institutions Development Project (“FIDP
II”); Tanzania Institute of Bankers (“TIB”) and Other Professional Associations and Charities. During the
year ended 30 June 2019, such contributions and subscriptions amounted to TZS 5,004.5 million (2018:
TZS 3,655.7 million). There was no donation made to any political party during the year.

69
 Bank of Tanzania Annual Report 2018/19

REPORT OF THE DIRECTORS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

22. CORPORATE SOCIAL RESPONSIBILITY

The Bank is committed to fulfilling part of its Corporate Social Responsibility (“CSR”) through
supporting national activities and other areas of interest to the Bank in the United Republic of Tanzania.
In this endeavour, the Bank has in place Donation Guidelines that assist in the implementation of
CSR. During the year, the Bank donated a total of TZS 265.0 million (2018: 265.0 million) to various
community groups.

23. SECRETARY TO THE BANK

The Secretary to the Bank is responsible for advising the Board on legal and corporate governance
matters and, in conjunction with the Chairman, for ensuring good information flows between the
Board, its Committees and Management. All members of the Board and Management have access
to his legal advice and services.

24. COMPLIANCE WITH LAWS AND REGULATIONS

In performing the activities of the Bank, various laws and regulations having the impact on the Bank’s
operations were observed.

25. SERIOUS PREJUDICIAL MATTERS

During the year ended 30 June 2019, there were no serious prejudicial matters to report as required
by Tanzania Financial Reporting Standard No. 1 - Directors’ Report.

26. STATEMENT OF COMPLIANCE

The Directors’ Report has been prepared in full compliance with requirements of the Tanzania
Financial Reporting Standards No. 1 - Directors’ Report.

27. AUDITORS
The Controller and Auditor General (“CAG”) is the statutory auditor for the Bank of Tanzania pursuant
to the provisions of Article 143 of the Constitution of the United Republic of Tanzania of 1977 (revised
2005), Sections 30 – 33 of the Public Audit Act No. 11 of 2008 and Section 20(6) of the Bank of
Tanzania Act, 2006..

Approved by the Board of Directors on 20th December, 2019 and signed on its behalf by:

Prof. Florens D.A.M Luoga Mr. Geoffrey I. Mwambe

The Governor and Chairman of the Board Director and Chairman of the Audit Committee

70
 Bank of Tanzania Annual Report 2018/19

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

FOR THE YEAR ENDED 30 JUNE 2019

The Directors are responsible for the preparation and fair presentation of these financial statements in
accordance with International Financial Reporting Standards issued by the International Accounting
Standards Board (“IASB”), National Board of Accountants and Auditors’ (“NBAA”) Pronouncements and
the requirements of the Bank of Tanzania Act, 2006 and for such internal controls as Directors determine
are necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.

The Directors accept responsibility for these financial statements, which have been prepared using
appropriate accounting policies supported by reasonable and prudent judgments and estimates, in
conformity with International Financial Reporting Standards, NBAA’s Pronouncements and in the manner
required by the Bank of Tanzania Act, 2006. The Directors are of the opinion that financial statements give
a true and fair view of the state of the financial affairs of the Bank and its operating results. The Directors
further accept responsibility for the maintenance of accounting records, which may be relied upon in the
preparation of financial statements, as well as adequate systems of internal financial control.

Nothing has come to the attention of the Directors to indicate that the Bank will not remain a going
concern for at least the next twelve months from the date of this statement.

Approved by the Board of Directors on …………………………… 2019, and signed on its behalf by:

Prof. Florens D.A.M Luoga Mr. Geoffrey I. Mwambe

The Governor and Chairman of the Board Director and Chairman of the Audit Committee

71
 Bank of Tanzania Annual Report 2018/19

DECLARATION OF THE HEAD OF FINANCE

FOR THE YEAR ENDED 30 JUNE 2019

The National Board of Accountants and Auditors (“NBAA”) according to the power conferred under the
Auditors and Accountants (Registration) Act. No. 33 of 1972, as amended by Act No. 2 of 1995, requires
financial statements to be accompanied with a declaration issued by the Head of Finance/Accounting
responsible for the preparation of financial statements of the Bank.

It is the duty of a Professional Accountant to assist the Board of Directors to discharge the responsibility
of preparing financial statements of the Bank showing true and fair view of the Bank’s financial position
and financial performance in accordance with applicable International Financial Reporting Standards,
NBAA’s pronouncements and statutory financial reporting requirements. Full legal responsibility for the
preparation of financial statements rests with the Board of Directors as stated under the statement of
directors’ responsibilities on page 72.

I, Jamhuri Joseph Ngelime, being the Head of Finance of the Bank of Tanzania hereby acknowledge my
responsibility of ensuring that financial statements for the year ended 30 June 2019 have been prepared
in compliance with International Financial Reporting Standards, NBAA’s Pronouncements and the Bank of
Tanzania Act, 2006.

I thus confirm that the financial statements give a true and fair view position of the Bank of Tanzania as on
that date and that they have been prepared based on properly maintained financial records.

…………………………………………
Director of Finance
NBAA Membership No.: ACPA 1497

.…… December 2019

72
 Bank of Tanzania Annual Report 2018/19

INDEPENDENT AUDITOR’S REPORT

Board Chairman
Bank of Tanzania
P.O. Box 2939
Dar es Salaam, Tanzania

REF: REPORT OF THE CONTROLLER AND AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF
BANK OF TANZANIA FOR THE YEAR ENDED 30 JUNE 2019

Report on the financial statements

Unqualified Opinion
I have audited the financial statements of Bank of Tanzania (the “Bank”), which comprise the statement of
financial position as at 30 June 2019, the statement of profit or loss and other comprehensive income, statement
of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements,
including significant accounting policies set out from page 76 to 192

In my opinion, the accompanying financial statements give a true and fair view of the financial position of Bank
of Tanzania as at 30 June 2019, its financial performance and cash flows for the year then ended in accordance
with International Financial Reporting Standards (“IFRSs”) and in compliance with the requirements of the Bank
of Tanzania Act, 2006.

Basis for Opinion

I conducted my audit in accordance with International Standards of Supreme Audit Institutions (ISSAIs). My
responsibilities under those standards are further described in Responsibilities of the Controller and Auditor General
for the audit of the financial statements section of my report. I am independent of Bank of Tanzania in accordance
with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA
Code) and the ethical requirements of the National Board of Accountants and Auditors (NBAA) that are relevant to
my audit of the financial statements in Tanzania. I have fulfilled my other ethical responsibilities in accordance with
these requirements and the IESBA Code.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Independence
I am independent of Bank of Tanzania in accordance with the International Ethics Standards Board for
Accountants’ Code of Ethics for Professional Accountants (IESBA Code) and the ethical requirements of the
National Board of Accountants and Auditors (NBAA) that are relevant to my audit of the financial statements in
Tanzania. I have fulfilled my other ethical responsibilities in accordance with these requirements.

Other Information
The Directors are responsible for the other information, including the Directors’ report. The other information
does not include the financial statements and auditor’s report thereon. My opinion on the financial statements
does not cover the other information and I do not express any form of assurance conclusion thereon.

In connection with my audit of the financial statements, my responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or my knowledge obtained in the audit or otherwise appears to be materially misstated. If, based
on the work I have performed on the other information that I obtained prior to the date of this auditor’s report, I
conclude that there is a material misstatement of this other information, I am required to report that fact. I have
nothing to report in this regard.

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 Bank of Tanzania Annual Report 2018/19

INDEPENDENT AUDITOR’S REPORT (CONTINUED)

Key Audit Matters

Key audit matters are those matters that, in my professional judgment, were of most significance in my audit of
the financial statements of the current period. These matters were addressed in the context of my audit of the
financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on
these matters. I have determined that there are no key audit matters to communicate in my report.

Responsibilities of the Directors for the financial statements

The Directors are responsible for the preparation of the financial statements that give a true and fair view in
accordance with International Financial Reporting Standards and the requirements of the Bank of Tanzania Act,
2006 and for such internal controls as Directors determine are necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Bank’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Directors either intend to liquidate the Corporation or to cease operations, or
have no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Bank’s financial reporting process.

Responsibilities of the Controller and Auditor General on the Audit of the Financial Statements
My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in
accordance with ISSAIs will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISSAIs, I exercise professional judgement and maintain professional
skepticism throughout the audit. I also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control;
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Bank’s internal control;
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the Directors;
• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Bank’s ability to continue as a going concern. If I conclude that a material
uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based
on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may
cause the Bank to cease to continue as a going concern;
• Evaluate the overall presentation, structure and content of the financial statements, including the

74
 Bank of Tanzania Annual Report 2018/19

INDEPENDENT AUDITOR’S REPORT (CONTINUED)

Responsibilities of the Controller and Auditor General on the Audit of the Financial Statements
(continued)

disclosures, and whether the financial statements represent the underlying transactions and events in a manner
that achieves fair presentation.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that I identify
during my audit.

In addition, Section 10 (2) of the Public Audit Act No. 11 of 2008 requires me to satisfy myself that the financial
statements have been prepared in accordance with the appropriate accounting standards and that; reasonable
precautions have been taken to safeguard the collection of revenue, receipt, custody, disposal, issue and proper
use of public property, and that the law, directions and instructions applicable thereto have been duly observed and
expenditures of public monies have been properly authorized.

Further, Section 48(3) of the Public Procurement Act No.7 of 2011 requires me to state in my annual audit report
whether or not the auditee has complied with the provisions of the Act and its Regulations.

Compliance with Public Procurement Act

In view of my responsibility on the procurement legislation and taking into consideration the procurement
transactions and processes I reviewed as part of this audit, I state that the Bank of Tanzania is generally in
compliance with the requirements of the Public Procurement Act No.7 of 2011 and its underlying Regulations
of 2013 as amended in 2016.

75
 Bank of Tanzania Annual Report 2018/19

FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Notes 30.06.2019 30.06.2018

TZS ‘000 TZS ‘000
Operating income

Interest income 5 326,812,853 387,757,347

Interest expenses 6 (20,301,913) (38,243,116)

Net interest income 306,510,940 349,514,231

Net foreign exchange revaluation gains 7 8,437,013 150,312,285

Fees and commissions 9 51,192,597 44,441,372
Net gain on Financial Assets 8 67,208,365 -
Other operating income 10 28,429,273 10,124,686

155,267,248 204,878,343

Total operating income 461,778,188 554,392,574

Operating expenses

Net losses on financial assets – FVTPL 8 - (89,534,649)

Administrative expenses 11 (66,386,120) (61,417,604)
Currency issue and related expenses 12 (55,838,123) (71,931,595)
Personnel expenses 13 (124,689,668) (120,705,106)
Other operating expenses 14 (66,875,265) (10,996,457)
Depreciation of property and equipment 29 (23,847,390) (21,275,418)
Loss on disposal of property and equipment 29 (8,840) (16,720)
Amortisation of intangible assets 30 (1,541,829) (2,087,464)

Total operating expenses (339,187,235) (377,965,013)

Profit before tax 122,590,953 176,427,561

Income tax expense - -

Profit for the year 122,590,953 176,427,561

Other comprehensive income

Items that will be reclassified to profit or loss
Net unrealized gains on marketable securities-FVOCI 15 46,887,747 -
Items that will not be reclassified to profit or loss

Actuarial valuation gain (loss) 15 9,581,148 (15,009,000)

Net revaluation gain on equity investments 15 3,868,954 1,586,330
Total other comprehensive income 60,337,849 (13,422,670)

Total comprehensive income 182,928,802 163,004,891

76
 Bank of Tanzania Annual Report 2018/19

FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018

STATEMENT OF FINANCIAL POSITION AS AT 30TH JUNE 2019

Notes 30.06.2019 30.06.2018

TZS ‘000 TZS ‘000
Assets
Cash and balances with central banks and other banks 16 4,816,700,214 5,773,514,102
Escrow accounts 17 11,218,286 11,044,657
Holdings of Special Drawing Rights (SDRs) 19 67,392,346 3,232,160
Quota in International Monetary Fund (IMF) 19 1,266,185,402 1,268,292,685
Foreign currency marketable securities 20 5,065,705,728 6,512,415,415
Government securities 22 1,257,650,150 1,361,728,291
Advances to the Government 23 1,238,447,385 1,943,822,268
Loans and receivables 24 422,520,721 418,119,142
Equity investments 21 37,073,235 32,203,745
Inventories 25 8,404,147 6,546,392
Deferred currency cost 26 41,375,635 87,832,613
Other assets 27 522,014,822 132,334,677
Retirement benefit asset 28 8,227,657 -
Property and equipment 29 986,294,928 990,982,866
Intangible assets 30 3,853,665 5,133,008

Total assets 15,753,064,321 18,547,202,021

Liabilities
Currency in circulation 31 4,965,202,559 4,646,962,897
Deposits - Banks and non-bank financial institutions 32 3,457,134,887 3,188,338,440
Deposits - Governments 33 - 2,544,064,269
Deposits – Others 34 2,148,235,048 2,133,912,345
Items in course of settlement 18 25,755,244 551,547
Foreign currency financial liabilities 35 919,256,948 1,180,140,312
Poverty reduction and growth facility 36 130,856,840 323,441,203
BoT liquidity papers 37 330,753,832 580,698,636
Provisions 38 6,062,277 5,963,678
Other liabilities 39 72,990,052 53,728,845
Retirement benefit obligation 46 - 18,985,000
IMF related liabilities 19 1,076,082,365 1,077,873,263
Allocation of Special Drawing Rights (SDRs) 19 606,392,081 607,401,286

Total liabilities 13,738,722,133 16,362,061,721

Equity
Authorised and paid up share capital 40 100,000,000 100,000,000
Reserves 41 1,914,342,188 2,085,140,300

Total equity 2,014,342,188 2,185,140,300

Total equity and liabilities 15,753,064,321 18,547,202,021

The financial statements on page 76 to 192 were approved and authorised by the Board of Directors for
issue on 20th December and signed on its behalf by:

Prof. Florens D.A.M Luoga Mr. Geoffrey I. Mwambe

The Governor and Chairman of the Board Director and Chairman of the Audit Committee

77
 FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

STATEMENT OF CHANGES IN EQUITY

Financial Foreign
Assets Sector Securities exchange Defined
Share General Retained Capital Equalisation Reserve for Staff housing revaluation Development revaluation revaluation Reserve for benefit
Year ended 30 June 2019 capital reserve earnings reserve reserve projects fund reserve fund reserve reserve dividends reserves Total
Note 40 Note 41 (a) Note 41 (b) Note 41 (c) Note 41 (d) Note 41 (e) Note 41 (f) Note 41 (g) Note 41 (h) Note 41 (i) Note 41 (j) Note 41 (k)
(Amounts in TZS ‘000)

At 1 July 2018 100,000,000 444,907,153 (3,726,914) *** 99,262,908 360,888,713 210,000,000 126,710,166 260,246,143 38,700,082 2,383,761 212,970,682 350,000,000 (20,929,310) 2,181,413,386

Profit for the year - - 122,590,953 - - - - - - - - - - 122,590,953

Other comprehensive income - - - - - - - - - 50,756,701 - - 9,581,148 60,337,849

100,000,000 444,907,153 118,864,039 99,262,908 360,888,713 210,000,000 126,710,166 260,246,143 38,700,082 53,140,462 212,970,682 350,000,000 (11,348,162) 2,364,342,188

Transfer of unrealised gain to

foreign exchange revaluation
reserve* - - (3,077,265) - - - - - - - 3,077,265 - - -

Transfer of realised gain on

foreign exchange revaluation to
retained earnings* - - 212,970,682 - - - - - - - (212,970,682) - - -

Transfer of unrealised gain to

78
securities revaluation reserve - - (8,636,710) - - - - - - 8,636,710 - - - -

Transfer of excess realised gains

from equalization reserve - - - - (6,672,957) - - - - - 6,672,957 - - -

Transfer of excess realised gain

on foreign exchange revaluation
reserve to retained earning** - - 6,672,957 - - - - - - - (6,672,957) - - -

Financial sector development

fund income - - 1,005 - - - - - (1,005) - - - - -
Bank of Tanzania Annual Report 2018/19

Staff housing fund - - (5,183,760) - - - 5,183,760 - - - - - - -

Dividends paid - - - - - - - - - - - (350,000,000) - (350,000,000)

Appropriation of 2018/19 net

profit - 12,259,095 (321,610,948) - 59,351,853 - - - - - - 250,000,000 - -

At 30 June 2019 100,000,000 457,166,248 - 99,262,908 413,567,609 210,000,000 131,893,926 260,246,143 38,699,077 61,777,172 3,077,265 250,000,000 (11,348,162) 2,014,342,188

* Realised gains on foreign currency revaluation reserve included in distributable profit and unrealised gains excluded from computation of distributable profit, please refer Note 7.
** Realised losses on securities revaluation reserve included in distributable profit and unrealised losses excluded from computation of distributable profit.
***The amount of TZS 3,726.9 million is an adjustment of impairment loss (Expected Credit Loss) on adoption of IFRS 9
 FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

STATEMENT OF CHANGES IN EQUITY

Financial Foreign
Assets Sector Securities exchange Defined
Year ended 30 June Share General Retained Capital Equalisation Reserve for Staff housing revaluation Development revaluation revaluation Reserve for benefit
2018 capital reserve earnings reserve reserve projects fund reserve fund reserve reserve dividends reserves Total
Note 40 Note 41 (a) Note 41 (b) Note 41 (c) Note 41 (d) Note 41 (e) Note 41 (f) Note 41 (g) Note 41 (h) Note 41 (i) Note 41 (j) Note 41 (k)
(Amounts in TZS ‘000)

At 1 July 2017 100,000,000 399,156,998 - 99,262,908 309,137,314 210,000,000 112,825,313 260,246,143 36,793,285 29,728,478 470,905,278 300,000,000 (5,920,310) 2,322,135,409

Profit for the year - - 176,427,561 - - - - - - - - - - 176,427,561

Other comprehensive
income - - - - - - - - - 1,586,330 - - (15,009,000) (13,422,670)

100,000,000 399,156,998 176,427,561 99,262,908 309,137,314 210,000,000 112,825,313 260,246,143 36,793,285 31,314,808 470,905,278 300,000,000 (20,929,310) 2,485,140,300

Transfer of unrealised
gain to foreign
exchange revaluation
reserve* - - (79,730,889) - - - - - - - 79,730,889 - - -

Transfer of realised
gain on foreign

79
exchange revaluation
to retained earnings* - - 337,665,488 - - - - - - - (337,665,488) - - -

Transfer of unrealised
losses to securities
revaluation reserve - - 70,433,770 - - - - - - (70,433,770) - - - -

Transfer of realised
losses from securities
revaluation reserve** - - (41,502,723) - - - - - - 41,502,723 - - - -

Financial sector
Bank of Tanzania Annual Report 2018/19

development fund
income - - (1,906,797) - - - - - 1,906,797 - - - - -

Staff housing fund** - - (3,884,853) - - - 3,884,853 - - - - - - -

Dividends paid - - - - - - - - - - - (300,000,000) - (300,000,000)

Appropriation of
2017/18 net profit - 45,750,156 (457,501,557) - 51,751,401 - 10,000,000 - - - - 350,000,000 - -

At 30 June 2018 100,000,000 444,907,154 - 99,262,908 360,888,715 210,000,000 126,710,166 260,246,143 38,700,082 2,383,761 212,970,682 350,000,000 (20,929,310) 2,185,140,300

* Realised gains on foreign currency revaluation reserve included in distributable profit and unrealised gains excluded from computation of distributable profit, please
refer Note 7.
 Bank of Tanzania Annual Report 2018/19

FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

STATEMENT OF CASH FLOWS

Notes 30.06.2019 30.06.2018
TZS ‘000 TZS ‘000
Cash flows from operating activities

Net cash generated / (used in) from operating activities 42

(1,733,823,100) 1,197,142,359

Cash flows from investing activities

Purchase of property and equipment 29 (19,231,724) (35,827,205)

Proceeds from disposal of property and equipment 29 6,910 46,525
Purchase of intangible assets 30 (138,354) (1,318,268)
Decrease/(increase) in foreign currency marketable securities 1,493,597,434 (504,566,072)
Decrease in Government securities 104,078,141 130,578,373
Acquisition of equity shares (1,000,536) (1,427,920)
Decrease /(increase) in quota in International Monetary Fund
(IMF) 2,107,283 (33,456,206)
Decrease/(increase) in holdings of SDRs (64,160,186) 25,811,548

Net cash flows from investing activities 1,515,258,968 (420,159,225)

Cash flows from financing activities

Increase in currency in circulation 318,239,662 292,356,605

Decrease in IMF related liabilities and PRGF (194,375,261) (150,326,705)
Increase in foreign currency financial liabilities (260,883,364) 249,746,700
Increase in allocation of SDRs (1,009,205) 16,022,597
Increase/(decrease) in BoT liquidity papers (249,944,804) (7,613,902)
Dividends paid to the Government (350,000,000) (300,000,000)

Cash generated from financing activities (737,972,972) 100,185,295

Net increase in cash and cash equivalents (956,537,104) 877,168,430

Cash and cash equivalents

At the beginning of the year 5,773,514,102 4,896,345,671

At the end of the year1 16 4,816,976,998 5,773,514,102

1
Cash and cash equivalent at year end is gross of expected credit loss of TZS 276.78 million resulting from adoption of IFRS 9

80
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

1. REPORTING ENTITY

Legal framework
The Bank of Tanzania operates under the Bank of Tanzania Act, 2006, to act as the Central Bank for
the United Republic of Tanzania. Its principal place of business is at 2 Mirambo Street, Dar es Salaam,
Tanzania and it operates branches in Arusha, Dodoma, Mbeya, Mwanza, Mtwara and Zanzibar. The
Bank is an independent institution with its own legal personality and submits its reports to the Minister
for Finance and Planning.

The Bank’s principal responsibilities are to:

• Conduct monetary policy and manage the exchange rate policy of the Tanzania Shillings aimed
at supporting orderly, balanced and sustainable economic growth of Tanzania;

• Regulate and supervise financial institutions carrying on activities in, or from within, Tanzania,
including mortgage financing, lease financing, development financing, licensing and revocation
of licenses;

• Manage, in collaboration with other relevant supervisory and regulatory bodies, the clearing,
payment and settlement systems of Tanzania;

• Collect, compile, disseminate, on a timely basis, monetary and related financial statistics; and

• Hold and manage gold and foreign exchange reserves of Tanzania.

Section 17 of the Bank of Tanzania Act, 2006, (the Act) provides that the authorised capital of the
Bank to be one hundred billion Tanzanian Shillings (TZS 100 billion). The capital may be increased by
transfer from the General Reserve established by the Act such amount as may be determined by the
Board, and authorised by the Minister of Finance and planning, by notice published in the Gazette.

The paid up capital of the Bank shall not be reduced. The capital of the Bank shall be subscribed and
held solely by the Government of the United Republic of Tanzania.

Section 18(1) of the Bank of Tanzania Act, 2006 provides that, the Bank shall establish and maintain:

(a) A General Reserve Fund;

(b) A Foreign Exchange Revaluation Reserve;

(c) Other appropriate assets revaluation reserves or retained net unrealised gains reserves, set up
under a decision of the Board to reflect changes in market values of the Bank’s major assets and
in accordance with the best international accounting practice; and

(d) Other special reserves or funds from time to time from appropriation of net profit.

Under Section 18(2) of the Act, the Bank shall transfer to the General Reserve Fund twenty-five per-
centum of the net profits until such time that the total capital of the Bank reaches a sum equivalent to
at least ten per-centum of the total assets of the Bank less its assets in gold and foreign currencies,
thereafter the Bank shall transfer not less than ten percent of its net profits to the General Reserve
Fund.

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 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

1. REPORTING ENTITY (CONTINUED)

Legal Framework (continued)
In terms of Section 18(3) of the Act, the Board shall determine, whenever the authorised capital,
the General Reserve Fund, the Foreign Exchange Revaluation Reserve and other appropriate asset
revaluation reserves or retained net unrealised gains reserves set up by the Board are below five
per cent of monetary liabilities all profits shall be retained to the General Reserve Fund, the Foreign
Exchange Revaluation Reserve and to any other asset revaluation reserve.

Section 18(4) of the Act provides that; unrealised profits or losses from any revaluation of the
Bank’s net assets or liabilities in gold, foreign exchange, foreign securities or any internationally
recognised reserve asset as a result of any change in the par or other value of any currency unit shall
be transferred to a special account to be called the Foreign Exchange Revaluation Reserve Account;
the same procedure shall be applied to market value movements in relation to the Bank’s other major
assets when any of the underlying asset is eventually sold, any resultant realised components shall
be transferred to the Statement of Profit or Loss and Other Comprehensive Income.

Section 18(5) of the Act, requires both realised and unrealised gains and losses to be included in the
profit calculation but only the residual of any net realised profits of the Bank to be paid, within three
months of the close of each financial year, into the Consolidated Fund; subject to the condition that
if at the end of any financial year any of the Governments (The Government of the United Republic
and the Revolutionary Government of Zanzibar) is indebted to the Bank, the Bank shall first apply the
remainder of its net realised profits to the reduction or discharge of the indebtedness and thereafter
such amount as relates to the net realised profits of the Bank in the relevant financial year shall be
paid out of the Consolidated Fund to the Treasury of the Government of the United Republic of
Tanzania and the Revolutionary Government of Zanzibar in accordance with the formula agreed upon
by the Governments.

Section 19(1) of the Act, provides that, where the Bank’s Statement of Financial Position indicates
that the amount of its assets is less than the amount of its liabilities and the statutory fund, the
Minister of Finance and Planning shall, on behalf of the United Republic, issue to the Bank negotiable
interest-bearing securities at market determined interest rates with a fixed maturity date to the amount
necessary to restore the Bank’s level of paid up capital.

In terms of Section 20(1) of the Act, the financial year of the Bank shall be the period commencing on
1 July of each year and the accounts of the Bank shall be closed on 30 June of each financial year.
Furthermore, Section 20(2) of the Act provides that, the Bank’s accounting policies, procedures and
associated accounting records shall be consistent at all times with the best international accounting
standards.

Section 20 (6) of the Act, provides the annual external audit of the Bank to be performed by the
Controller and Auditor General in accordance with International Accounting and Auditing Standards
and in compliance with the Public Finance Act.

Section 23 of the Act provides that the Bank shall only be placed in liquidation or wound up pursuant
to the procedure prescribed in an enactment of Parliament but the provisions of the Companies Act
and the Companies Decree shall not apply in relation therewith.

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 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

2. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

(IFRSs)
(a) New and revised IFRSs that are mandatorily effective for the year
During the year the Bank has applied the last phase of IFRS 9 Financial Instruments and IFRS 15
Revenue from Contracts with Customers. Management noted but did not affect the standards or
amendments that are not applicable to the Bank’s business and accounting framework. The unapplied
standards were amendments to IAS 40 Transfers of Investment Property, amendments to IFRS 2
Classification and Measurement of Share-based Payment Transactions and amendments to IFRS 4
Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts.

The following are new and revised IFRSs that are effective from annual periods beginning on or after
1 January 2018.

New and Amendments to standards:

IFRS 9 Financial Instruments
IFRS 15 Revenue from Contracts with Customers

IFRS 9 Financial Instruments

IASB issued a finalised version of IFRS 9 which contains accounting requirements for financial
instruments, replacing IAS 39. The standard contains new requirements in classification and
measurement of financial assets and financial liabilities; impairment methodology and hedge
accounting. IFRS 9 introduces an ‘expected credit loss’ model for the measurement of the impairment
of financial assets.

In addition, the version introduces a new hedge accounting model that is designed to be more closely
aligned with how entities undertake risk management activities when hedging financial and non-
financial risk exposures.

Management has applied the requirement of this completed version of the standard on the Bank’s
financial reporting framework resulting to change of classification and measurement of financial
assets and impairment policy. The changes in hedge accounting are not applicable as the Bank has
not opted for hedge accounting.

The Bank opted for early adoption of the first release of IFRS 9 that dealt with classification and
measurement on 1st July 2011. Under this release the business model classified financial assets under
two categories namely: Fair Value through Profit or Loss and Amortized cost. There was no change
in classification of financial liabilities except for the subsequent amendments relating to treatment
of own credit risk. The Bank reclassified its marketable securities as subsequently measured at fair
value through profit or loss. Other financial assets were classified as measured at amortized cost.

On the date of application of the early adoption of first version of IFRS 9 the Bank implemented the
following major changes:
Reclassification of unhedged foreign currency denominated securities, equivalent to TZS 5,900.3
billion, from fair value through profit or loss (FVTPL) to fair value through other comprehensive income
and designation to FVTPL of hedged portfolio of foreign currency denominated securities equivalent
to TZS

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 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

2. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

(IFRSs) (CONTINUED)
(a) New and revised IFRSs that are mandatorily effective for the year (Continued)
611.8 billion. In reclassification to FVOCI the Bank has opted the use of fair value of assets at the
date of reclassification as the new cost for the purpose of recording gains or losses and amortisation.
The transition relating to classification did not have significant further financial impact on the Bank’s
financial statements.

The Bank recorded new impairment relating to debt instruments that were reclassified to FVOCI and
change of impairment assessment policy as a result of the introduction of the expected credit Loss
model with its three stages, namely, on initial recognition, when credit risk increases significantly and
when a financial asset is considered credit-impaired.

IFRS 15 Revenue from Contracts with Customers

The standard provides a single, principles based five-step model to be applied to all contracts with
customers. Entities are required to allocate the transaction price to the performance obligations in the
contracts and recognise revenue when (or as) the entity satisfies a performance obligation.

The amendments clarify that promised goods or services may include granting licenses, the entity’s
promise to transfer the good or service to the customer is separately identifiable from other promises
in the contract and clarify the factors that indicate two or more promises to transfer goods or services
to a customer are not separately identifiable.

The application of the standard resulted to insignificant impact on the Bank’s accounting of some
income in the category of other income. The Bank’s major sources of income are financial instruments
which are out of the scope of IFRS 15.

(b) New and revised IFRS in issue but not yet effective for the year
The Bank has not early adopted any of the following new and revised IFRSs that have been issued but
are not yet effective. Commentary is provided for the amendments and standards that are applicable
to the Bank’s operations:

Effective for annual periods

New and amended standards:
beginning on or after

IFRS 16 Leases 1 January 2019

IFRS 17 Insurance Contracts 1 January 2022

IFRIC Interpretation 22 Foreign Currency Transactions and

Advance Consideration 1 January 2019

IFRIC 23 Uncertainty over Income Tax Treatments 1 January 2019

84
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

2. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

(IFRSs) (CONTINUED)
(b) New and revised IFRS in issue but not yet effective for the year (Continued)

Effective for annual periods

New and amended standards:
beginning on or after
Amendments to IAS 1 Presentation of Financial Statements 1 January 2020
Amendments to IAS 8 Accounting Policies, Changes in
1 January 2020
Accounting Estimates and Errors
Amendments to IAS 19 Employee Benefits 1 January 2019
Amendments to IAS 28 Investments in Associates and Joint Ventures 1 January 2019
Amendments to IFRS 3 Business Combinations 1 January 2020
Amendments to IFRS 9 Prepayment Features with Negative Compensation 1 January 2019
Annual Improvements to IFRS Standards 2015-2017 Cycle 1 January 2019

IFRS 16 Leases
IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of
leases. The objective of the standard is to ensure that lessees and lessors provide relevant information
in a manner that faithfully represents those transactions. This information gives a basis for users
of financial statements to assess the effect that leases have on the financial position, financial
performance and cash flows of the entity.

Specifically, IFRS 16 introduces a single lessee accounting model and requires a lessee to recognise
assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is
of low value. On the other hand, a lessor continues to classify its leases as operating leases or finance
leases, and to account for those two types of leases differently.

Bank has been accounting for land by using IAS 17 Leases. The Bank view has been that it does not
own the land as per the terms of the title deeds and that has substantial part of the risk and reward
from the leased land. Based on key criteria that compares the risk and rewards during the lease term
and that of the economic life of the leased property as per this Standard, the land to the Bank was
assessed to be under operating lease rather than financing lease. The assessment considered the
indefinite lifetime characteristic of land.

By classifying land as operating lease, the Bank has been transferring the cost of land to Comprehensive
income, the latest, on each valuation period when the values of land and buildings are separately
identified with increased certainty. The recent valuation of the land was conducted in 2016 where the
land was valued at TZS 223,060.1 million.  

Following release of the new standard on lease, (IFRS 16), the Management has assessed the
requirements of the new standard and is of the opinion that land (due to its value above the limit of
low value) will be classified as finance lease and reported as such on 30 June 2020. Accordingly, the
land value will form part of the Bank’s immovable assets and report in the financial statements.

85
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

2. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

(IFRSs) (CONTINUED)
(b) New and revised IFRS in issue but not yet effective for the year (Continued)
IFRS 16 Leases (Continued)
IFRS 16 supersedes:
• IAS 17 Leases;
• IFRIC 4 Determining whether an Arrangement contains a Lease;
• SIC-15 Operating Leases-Incentives; and
• SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

Earlier application is permitted for entities that apply IFRS 15 Revenue from Contracts with Customers at
or before the date of initial application of IFRS 16.

Management has assessed the requirement of this standard including the amendments and its impact on
the Bank’s financial reporting framework. The standard will have immaterial impact on the accounting for
land lease and the use of fibre optic cables.

IFRIC Interpretation 22 Foreign Currency Transactions and Advance Consideration

The interpretation defines the date of transaction for application of paragraphs 21 – 22 of IAS 21, when
determining the exchange rate to use. As per the interpretation, date of the transaction for the purpose of
determining the exchange rate to use on initial recognition of the related asset, expense or income (or part
of it) is the date on which an entity initially recognises the non-monetary asset or non-monetary liability
arising from the payment or receipt of advance consideration.

Management has assessed the requirement of interpretation on the Bank’s financial reporting framework
and is of the opinion that the determination of transaction date referred to is in line with the definition of
this interpretation and there will be no further impact.

Amendments to IAS 1 Presentation of Financial Statements

The amendments give revised definition of materiality to clarify that information is material if omitting,
misstating or obscuring it could reasonably be expected to influence decisions that the primary users
of general purpose financial statements make on the basis of those financial statements, which provide
financial information about a specific reporting entity. Management is still assessing the requirements of
these amendments and their impact on the Bank’s financial reporting framework when they fall due.

Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

The amendments deleted the definition of materiality and referenced it to the definition in paragraph 7 of
IAS 1 with the aim of harmonisation. Management is still assessing the requirements of these amendments
and their impact on the Bank’s financial reporting framework when they fall due.

Amendments to IAS 19 Employee Benefits

The amendments require that when determining past service cost, or a gain or loss on settlement,
an entity shall re-measure the net defined benefit liability (asset) using the current fair value of plan
assets and current actuarial assumptions, reflecting; the benefits offered under the plan and the plan
assets before and after the plan amendment, curtailment or settlement. An entity is required to use
updated actuarial assumptions to determine current service cost and net interest for the remainder
of the annual

86
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

2. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

(IFRSs) (CONTINUED)
(b) New and revised IFRS in issue but not yet effective for the year (Continued)
Amendments to IAS 19 Employee Benefits (Continued)
reporting period after the plan amendment, curtailment or settlement when the entity re-measures its net
defined benefit liability (asset).

Management has assessed the requirements of these amendments and their impact on the Bank’s
financial reporting framework when they fall due and is of opinion that the Bank’s accounting is in line with
the amendments.

Amendments to IFRS 9 Prepayment Features with Negative Compensation

The amendments introduce an exception that some particular financial assets with prepayment features
that may result in reasonable negative compensation for the early termination of the contract are eligible
to be measured, subject to assessment of the business model, at amortised cost or at fair value through
other comprehensive income on condition that the use of effective interest rate would result to provision
of useful information.

Management has assessed the requirements of these amendments and their impact on the Bank’s
financial reporting framework and is of the opinion that the amendments will have insignificant impact on
the measurement of financial assets due to the nature of the Bank’s financial assets.

Presentation of financial statements

The Bank presents its Statement of Financial Position broadly in order of liquidity. An analysis regarding
recovery or settlement within 12 months after the statement of financial position date (current) and more
than 12 months after the statement of financial position date (non-current) is presented in Note 43.

Financial assets and financial liabilities are offset and the net amount reported in the Statement of Financial
Position only when there is a legally enforceable right to offset the recognised amounts and there is an
intention to settle on a net basis, or to realise the assets and settle the liability simultaneously. Income
and expense is not offset in the profit or loss unless required or permitted by any accounting standard or
interpretation, and as specifically disclosed in the accounting policies of the Bank.

Basis of preparation
The financial statements have been prepared on a historical cost basis except where otherwise stated
or as required by International Financial Reporting Standards and Interpretations to those Standards for
assets and liabilities to be stated at their fair value as disclosed in the accounting policies hereafter. The
financial statements are presented in thousands of Tanzanian Shillings (TZS ‘000) except where explicitly
stated.

Statement of compliance
The financial statements of Bank of Tanzania have been prepared in accordance with International
Financial Reporting Standards as far as they are practically applicable to the Bank and comply with the
requirements of the Bank of Tanzania Act, 2006. The Directors Report is presented together with financial
statements in compliance with Tanzania Financial Reporting Standards.

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 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

3. SIGNIFICANT ACCOUNTING POLICIES

Revenue recognition
Revenue is recognised to the extent it is probable that the economic benefits will flow to the Bank and the
revenue can be reliably measured. The following specific recognition criteria must be met before revenue
is recognised:

Interest income
For all financial instruments measured at amortised cost, interest income is recorded at the effective
interest rate, which is the rate that exactly discounts estimated future cash payments or receipts through
the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying
amount of the financial asset or financial liability. The calculation takes into account all contractual terms
of the financial instrument (for example, prepayment options) and includes any fees or incremental cost
that are directly attributable to the instrument and are an integral part of the effective interest rate, but not
future credit losses.

The carrying amount of the financial asset or financial liability is adjusted if the Bank revises its estimates
of receipts or payments. The adjusted carrying amount is calculated based on the original effective interest
rate and the change in carrying amount is recorded as interest income or expense.

Once the recorded value of a financial asset has been reduced due to an impairment loss, interest income
continues to be recognised using the original effective interest rate applied to the new carrying amount.

Fees and commission income

Fees and commissions are generally recognised on an accrual basis when the service has been rendered.
The recognition is when or as performance obligations within contract with customer are satisfied. Loan
commitment fees for loans that are likely to be drawn down are deferred (together with related direct cost)
and recognised as an adjustment to the effective interest rate on the loan. Commission and fees arising
from negotiating or participating in the negotiation of a transaction for a third party is recognised on
completion of the underlying transaction.

Other income falling under IFRS 15 is recognized after satisfaction of performance obligations at a point
in time or over time. Except for rental income from staff quarters covered by IAS 17 Leases, the remaining
other income not under IFRS 15 or other standard is recognized in the period in which it is earned on
accrual basis.

Dividend income
Dividend is recognised when the Bank’s right to receive the payment is established.

Other income
Other income falling under IFRS 15 is recognized after satisfaction of performance obligations at a point in
time or over time. These include income from hire of conference facility and fees and commission. Other
income out of the scope of IFRS 15 is recognised in the period in which it is earned.

Dividend payable
Dividend is recognised as a liability in the period in which it is declared. Proposed dividend is disclosed as
a separate component of equity.

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 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Expenses
These are losses and other expenses that arise in the course of Bank’s ordinary activities. They include
interest and administrative expenses. Generally, expenses are recognised in the Statement of Profit or
Loss and Other Comprehensive Income when decrease in future economic benefits related to decrease in
an asset or an increase of a liability has arisen and can be measured reliably.

Interest expenses
Interest expense is the cost of debt that has accrued during a specified accounting period regardless of
the time of spending the cash. These include interests on liquidity papers, repurchase agreements and IMF
drawings. Interest expenses are recorded using the effective interest rate method.

Since interest on debt is not paid daily, the Bank passes adjusting entries periodically to recognise interest
expense within the accounting period that the expense has been accrued.

Administrative expenses
This includes expenses that produce no future economic benefits or when, and to the extent that, future
economic benefits do not qualify, or cease to qualify, for recognition in the balance sheet as an asset.
Such expenses are recognised immediately in the income statement in the accounting period that the
cost has been incurred. These include maintenance, transport and travelling, meetings, conference and
seminars, water and electricity, fees, rates and security expenses, telecommunication and postage,
board expenses, audit fees, budget and annual accounts preparation, loss on disposal of property and
equipment, hospitality, legal and investigation expenses.

In addition, administrative expenses include expenses whose economic benefits are expected to arise over
several accounting periods and the association with benefit can only be broadly or indirectly determined.
Such expenses are recognised in the income statement in the accounting period in which the economic
benefits are consumed or have expired. They may include stationery and office supplies.

Other expenses
Other expenses are recognised in the income statement when decrease in future economic benefits related
to decrease in an asset or an increase of a liability has arisen and can be measured reliably.

Employees’ benefits including post-employment benefits

Short-term employment benefits such as salaries, social security contributions, and leave fare
assistance are recognised in Statement of Profit or Loss and Other Comprehensive Income when
they fall due.

Retirement benefits
The Bank has a statutory obligation to contribute for retirement benefits to its employees. All eligible
employees of the Bank are currently members of the social security schemes operating in Tanzania.
The funds where employees are members are National Social Security Fund (NSSF), Parastatal Pension
Fund (PPF), Public Service Pensions Fund (PSPF) and Local Authority Provident Fund (LAPF). Under
these schemes, the Bank and employee contribute 18 percent and 2 percent respectively of employee’s
basic salary every month. New employees who are members of other funds are allowed to continue their
membership to any statutory pension funds. Following establishment of the Public Service Social Security
Fund Act, 2018, LAPF, PPF, GEPF, and PSPF were merged to form Public Service Social Security Fund
(PSSSF).

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 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Retirement benefits (Continued)
The Bank signed a Voluntary Agreement (VA) with the Tanzania Union of Industrial and Commercial
Workers (TUICO), which provides for a number of benefits on retirement upon attaining a number of years
in service with the Bank as specified in the Bank’s Staff Bylaws. The provisions in the VA and Staff By-
Laws constitute a defined benefits plan, which has been accounted and disclosed in accordance with the
requirements of International Accounting Standard 19 Employee Benefits.

The plan is partly funded through employees’ contribution. There are two categories of benefits to Bank’s
staff. The first is payable to staff employed for unspecified period and second is to executive management
who are under specific contracts. Benefits are paid upon end of contract, retirement, withdrawal or death
as specified in the Staff Bylaws.

The total accumulated obligation to the Bank relating to this arrangement is based on assessments made
by independent actuaries. The actuarial valuation was carried out as at 30 June 2017 by Zamara Actuarial,
Administrator and Consultants Limited based in Nairobi - Kenya. The present value of the defined benefit
obligation, and the related current service cost and past service cost, were measured using the Projected
Unit Credit Method.

Under IAS 19, measurement of scheme liabilities must be calculated under the projected unit credit
method, which requires certain demographic and financial assumptions, including future salary growth.
The assumptions used are applied for the purposes of compliance with the IAS 19 only.

Re-measurement comprising of actuarial gains and losses are reflected immediately in the statement of
the financial position with a charge or credit recognised in Other Comprehensive income in the period in
which they occur. Re-measurement recognised in Other Comprehensive Income is reflected immediately
in retained earnings and not reclassified to profit or loss.

Past service, cost is recognised in the profit or loss in the period of plan amendment.

Net interest is calculated by applying the discount rate at the beginning of the period to the net defined
beginning obligation. In the absence of a deep corporate bond market in Tanzania, the Bank has used the
discount rate for Tanzania long-term bond yields as published in the Bank Monthly Economic Reviews.

The Bank presents current service cost and net interest cost in personnel expenses. Curtailment gains and
losses are accounted for as past service cost.

Other employee benefits

The Bank provides free medical treatment to its employees and their dependants through medical
insurance scheme. Exclusions are met by the Bank as medical expenses. The cost is charged to profit or
loss. The estimated monetary liability for employees’ earned but not taken leave entitlement at the end of
the reporting period is recognised as an accrued expense.
Provisions
Provisions are recognised when the Bank has a present legal or constructive obligation as a result of past
events, for which it is probable that an outflow of economic benefits will be required to settle the obligation,
and a reliable estimate can be made of the amount of the obligation.
Where the Bank expects some or all of the provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually
certain. The expense relating to any provision is recognised in profit or loss net of any reimbursement.

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 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Provisions (Continued)
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate
that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase
in the provision due to the passage of time is recognised as a finance cost.

Income Tax
No provision for income tax is made in the Financial Statements as Section 10 Second Schedule of the
Income Tax Act, 2004 exempts the Bank from taxation imposed by law in respect of income or profits.

Further, according to Section 22(1) and (2) of the Bank of Tanzania Act, 2006, the Bank is exempt from
payment of any taxes, levies or duties in respect of its profits, operations, capital, property or documents
or any transaction, deed, agreement or promissory note to which it is a party. The Bank is also exempt from
payment of stamp duty or other duties in respect of notes and coins issued as currency under the Act.

Effective 1 July 2012, the Bank was required to pay Value Added Tax (VAT) on goods or services provided
to the Bank at a rate of 18 percent of 55 percent of the value of goods and service. This excludes goods
and services not related to the Bank’s primary functions. The Bank is also required to pay import and
customs duties in accordance with the provisions of the East African Customs Management Act, 2004.

Foreign currency translation

Functional and presentation currency
Items included in the financial statements of the Bank are measured using the currency of the primary
economic environment in which the Bank operates (“the functional currency”). The financial statements are
presented in Tanzanian Shillings, which is the Bank’s functional and presentation currency and all values
are rounded to the nearest thousand (TZS’000) except where otherwise indicated.

Transactions and balances

Foreign currency transactions are translated into Tanzanian Shillings using the exchange rates prevailing
at the dates of the transactions.

Foreign exchange gains and losses resulting from the settlement of such transactions during the year and
from the translation of monetary assets and liabilities denominated in foreign currencies at year-end are
recognised in profit or loss.

Foreign exchange revaluation reserve under the legal framework

The realised foreign exchange gains/losses are separated from the total revaluation gains/losses. The
unrealised part is excluded from computation of distributable profits for the year and is carried in foreign
currency revaluation reserve until realised in subsequent years thereby becoming part of the distributable
profits. These are determined as follows:

(a) For each foreign currency account or security for the case of securities accounts, cash inflows and
outflows are determined.
(b) Each inflow is valued using the prevailing exchange rate.
(c) Each outflow is revalued using the prevailing exchange rate and compared with the rate at which
the outflow was recognised in the books of accounts. Where specific originating rate cannot be
identified, the applicable is determined on First in First out (FIFO) basis. The difference between the
two entries represent realised revaluation gains or losses.

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Foreign exchange revaluation reserve under the legal framework (continued)

(d) All balances in foreign currencies are revalued using prevailing exchange rates. The differences
between the values at the time when the related instrument was recognised, and the current
values represent unrealised losses or gains as the case may be.

Property and equipment

Property and equipment are initially recorded at construction, acquisition or purchase cost plus
direct attributable cost. Where an item of property and equipment comprises, major components
having different useful lives, they are accounted for separately. Property that is being constructed
or developed for future use to support operation is classified as Work in Progress (WIP) and stated
at cost until construction or development is complete and is available for use, at which time it is
reclassified as property and equipment in use.

The Bank’s immovable properties (buildings) are subsequently measured at fair value less accumulated
depreciation on buildings and impairment losses recognised after the date of the revaluation. The
valuation is performed by external independent valuers.

Any revaluation surplus is recorded in other comprehensive income and hence, credited to the Asset
Revaluation Reserve in equity, except to the extent that it reverses a revaluation decrease of the same
asset previously recognised in the profit or loss, in which case, the increase is recognised in the profit
or loss. A revaluation deficit is recognised in the profit or loss, except to the extent that it offsets an
existing surplus on the same asset recognised in the asset revaluation reserve.

Revaluation of the Bank’s immovable property is conducted every five years. M/S M & R Agency
Limited, professional and Independent valuers carried out the valuation of the Bank’s immovable
properties as at 30 June 2016. The valuation of the Bank’s immovable assets was made based on
open market values. However, where market data were not easily available, reliable depreciated
replacement cost was adopted. This basis is in line with International Valuation Standards.

Depreciation is charged to profit or loss on a straight-line basis to write off the cost of property and
equipment to their residual values over their expected useful lives. These residual values and expected
useful lives are re-assessed on an annual basis and adjusted for prospectively, if appropriate. The
review of residual values takes into account the amount that the Bank would currently obtain on
disposal of the asset after deducting the estimated cost of disposal if the asset were already of the
age and condition expected at the end of its useful or economic life (whichever is earlier).

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Property and equipment (Continued)
Depreciation rates applicable as at 30 June 2019 and 2018 were as follows:

Annual
Asset classification
depreciation rate Useful life

Office Premises 1.0% 100 years

Staff Club Premises 1.5% 67 years
Residential Premises 1.5% 67 years
Computer Servers 25.0% 4 years
Computer Printers 25.0% 4 years
Personal Computers 25.0% 4 years
Network Equipment 25.0% 4 years
Bullion Trucks and Armoured Vehicles 10.0% 10 years
Motor Vehicles 20.0% 5 years
Currency Processing Machines 10.0% 10 years
Machinery and Equipment 20.0% 5 years
Security Monitoring, Fire Detection and Fire Fighting 4 years
Systems 25.0%
Office Furniture 20.0% 5 years

No depreciation is charged to Capital Work-in-Progress. Property and equipment acquired during

the year are depreciated from the date when they are available for use and cease to be depreciated
at earlier of the date that the asset is classified as held for sale or the date that the assets are
derecognised.

Property and equipment are derecognised when no economic benefits are expected from its use
or disposal. The disposal methods applied include; sale, donation or scrapping. Gains or losses on
disposal of property and equipment are determined by comparing net disposal proceeds if any with
the carrying amount and are taken into account in determining operating profit or loss.

Intangible assets
Intangible assets consist of computer application software and computer application licence
packages. Intangible assets are carried at cost less any accumulated amortisation and accumulated
impairment losses.

Intangible assets are amortised over the useful economic life and assessed for impairment at the
reporting date to ascertain if there is an indication that the intangible asset may be impaired. Generally,
cost associated with developing computer software programmes are recognised as an expense when
incurred. Intangible assets acquired are measured on initial recognition at cost. Internally developed
intangible assets are not capitalised unless they meet certain criteria.

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Intangible assets (continued)
Internally developed software products include direct cost incurred by the Bank and are recognised as
intangible assets upon meeting the following criteria:

• It is technically feasible to complete the software product so that it will be available for use;

• Management intends to complete the software product and use it;

• There is ability to use the software product;

• It can be demonstrated how the software product will generate probable future economic benefits;

• Adequate technical, financial and other resources to complete the development and to use the
software product are available; and

• The expenditure attributable to the software product during its development can be measured
reliably.

The useful lives of intangible assets are assessed to be finite. Intangible assets with finite lives are
amortised over the useful economic life and assessed for impairment whenever there is an indication
that the intangible asset may be impaired. The annual rate of amortisation, which has been consistently
applied, is 25 percent. The amortisation period and the amortisation method for an intangible asset are
reviewed at the reporting date. Changes in the expected useful life or the expected pattern of consumption
of future economic benefits embodied in the asset is accounted for by changing the amortisation period
or method, as appropriate, and treated as changes in accounting estimates. The amortisation expense on
intangible assets is recognised in profit or loss. Gains or losses arising from de-recognition of an intangible
asset are measured as the difference between the net disposal proceeds and the carrying amount of the
asset and are recognised in profit or loss when the asset is derecognised.

Capital grant
Government grants are recognised where there is reasonable assurance that the grant will be received and
all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as
income over the period necessary to match the grant on a systematic basis to the cost that it is intended
to compensate. When the grant relates to an asset, it is recognised as deferred income and released as
income in equal instalments over the expected useful life of the related asset.

When the Bank receives non-monetary grants, the asset and the grant are recorded at gross amounts and
released to the income statement over the expected useful life and pattern of consumption of the benefit
of the underlying asset by equal annual instalments. When loans or similar assistance are provided by
governments or related institutions with an interest rate below the current applicable market rate, the effect
of this favourable interest is regarded as additional government grants.

Currency printing and minting expenses

These expenses include ordering, printing, minting, freight, carriage insurance and handling expenses
which are first deferred. Based on the currency issued into circulation, the respective proportional actual
cost expenses incurred are released to profit or loss from the deferred currency expenses account.

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3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Currency in circulation
This represents Tanzanian currency that has been issued into the Tanzanian economy by the Bank since
inception. Currency in circulation is measured at the face value of notes and coins issued. Currency in
circulation is determined by netting off notes and coins issued against the balance held in the Bank of
Tanzania vaults and notes and coins destroyed.

Impairment of non-financial assets

The Bank assesses at each reporting date whether there is an indication that a non-financial asset may
be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the
Bank makes an estimate of the asset’s recoverable amount. The recoverable amount is the higher of an
asset’s or cash generating unit’s fair value less cost to sell and its value in use and is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or group of assets. Where the carrying amount of an asset exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Impairment losses of continuing operations are recognised in profit or loss in those expense categories
consistent with the function of the impaired asset.

An assessment is made at each reporting date as to whether or not there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If such indication exists,
the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there
has been a change in the estimates used to determine the asset’s recoverable amount since the last
impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its
recoverable amount. That increased amount cannot exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such
reversal is recognised in profit or loss. After such a reversal the depreciation charge is adjusted in future
periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over
its remaining useful life.

Operating Lease
The Bank obtained long term leasehold (mainly 99 years) from the Government for the land owned. No
significant payments are made in advance to the Government other than Government fees/rates normally
paid on lease application and renewal based on Government rates that are published from time to time
and which are insignificant and not related to the value of land or period of occupation.

The Bank provides houses to employees on seven-year lease contracts. The contracts are cancellable.
They may be terminated by either party without charges or permission of the Bank. The lease is classified
as operating lease since comparison of the lease period to the useful life of the leased houses gives the
Bank a significant portion of the risks of ownership.

Repurchase and Resale Agreements (REPOs and Reverse REPOs)

Repurchase agreements are contracts under which a party sells securities and simultaneously agrees to
purchase the same securities at a specified future date at a fixed price. Resale agreements are contracts
under which a party purchases security and simultaneously agrees to resell the same securities at a future
date at a fixed price.

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It is the Bank’s policy to take possession of securities purchased under resale agreements, which are
primarily liquid government securities. The market value of these securities is monitored and, within
parameters defined in the agreements, additional collateral is obtained when their fair value declines.
The Bank also monitors its exposure with respect to securities sold under repurchase agreements
and, in accordance with the terms of the agreements, requests the return of excess securities held
by the counter party when fair value increases.

Repurchases and resale agreements are accounted for as collateralised financing transactions and
recorded at the amount at which the securities were acquired or sold plus accrued interest.

REPOs continue to be recognised in the Statement of Financial Position and are measured in
accordance with policies for financial liabilities.

The difference between sale and purchase price is treated as interest income or expense and is
recognised in profit or loss.

Foreign Exchange Revaluation Reserve

The Bank has a policy whereby both net realised, and unrealised foreign exchange gains and losses
are firstly recognised in profit or loss in accordance with the requirements of IAS 21 (The Effects of
Changes in Foreign Exchange Rates). The net realised foreign exchange gains (losses) for the year
arising from daily revaluation of foreign assets and liabilities form part of the distributable profits
while the net unrealised foreign exchange revaluation gains (losses) are transferred to the Foreign
Exchange Revaluation Reserve.

Reserve for Dividend

This reserve accommodates the amount of proposed dividend to the Governments as at end of
the accounting period or declared dividend if the declaration is made after the end of the period
but before the financial statements are signed. In accordance with Section 18 (5) of the Bank of
Tanzania Act, 2006, the remainder of the net profits of the Bank is paid to the Governments as
dividend. However, this is subject to the condition that if at the end of any financial year any of the
Governments is indebted to the Bank, the Bank shall first apply the reminder of its net realised profits
to the reduction or discharge of the Governments indebtedness.

Financial instruments - initial recognition and subsequent measurement

Date of recognition
Purchases or sales of financial assets that require delivery of assets within the time frame generally
established by regulation or convention in the market place are recognised on the trade date, that is
the date that the Bank commits to purchase or sell the asset.

Initial recognition of financial instruments

All financial instruments are measured initially at their fair value plus, in the case of financial assets
and financial liabilities not at fair value through profit or loss, any directly attributable incremental cost
of acquisition or issue.

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Classification of financial assets

Amortised cost
Debt instruments that meet the following conditions are subsequently measured at amortised cost less
impairment loss (except for debt investments that are designated as at fair value through profit or loss on
initial recognition).

The asset is held within a business model whose objective is to hold assets in order to collect contractual
cash flows; and the contractual terms of the instrument give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.

Financial assets measured at fair value through other comprehensive income (FVTOCI)-debt instruments
Debt instruments that meet the following conditions are subsequently measured at fair value with gains or
losses recognised in other comprehensive income (except for debt investments that are designated as at
fair value through profit or loss on initial recognition).

The asset is held within a business model whose objective is both to hold assets in order to collect
contractual cash flows and sale; and the contractual terms of the instrument give rise on specified dates
to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets measured at fair value through profit or loss (FVTPL)

Assets classified as FVTPL are measured at fair value. Gains and losses that arise as a result of changes
in fair value are recognised in profit or loss, gains and losses that arise between the end of the last annual
reporting period and the date an instrument is derecognised do not constitute a separate profit or loss on
disposal. Such gains and losses will have arisen prior to disposal, while the item is still being measured
at FVTPL, and are recognised in profit or loss when they occur. These are foreign currency marketable
securities.

Fair Value through Other Comprehensive Income (FVTOCI)-Investments in Equity

On initial recognition, the Bank made an irrevocable election (on an instrument-by-instrument basis) to
designate investments in equity instruments as at FVTOCI. These are equity investment in Afreximbank
and Society for Worldwide Interbank Financial Telecommunication (SWIFT).

Effective Interest Rate method

The effective interest rate method is a method of calculating the amortised cost of a debt instrument and
of allocating interest income over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash receipts (including all fees and points paid or received that form an
integral part of the effective interest rate, transaction cost and other premiums or discounts) through the
expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount
on initial recognition. Income is recognised on an effective interest basis for debt instruments measured
subsequently at amortised cost. These include Government Securities, Loans and Advances.

Interest income is recognised in profit or loss.

Financial liabilities
This represents issued financial instruments or their components, which are not held at fair value through
profit or loss, financial liabilities that arise when a transfer of financial asset does not qualify for de-
recognition or when the continuing involvement approach applies, commitments to provide a loan

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Classification of financial assets

at below market interest rate and hedged items are classified at amortised cost. The Bank’s financial
liabilities are measured at amortised cost using the effective interest rate method.

De-recognition of financial assets and financial liabilities

Financial assets
A financial asset (or, where applicable a part of a financial asset or part of a Bank of similar financial
assets) is derecognised where:

• the rights to receive cash flows from the asset have expired; or

• the Bank has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a
pass-through arrangement; and either
(a) the Bank has transferred substantially all the risks and rewards of the asset, or

(b) the Bank has neither transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.

When the Bank has transferred its rights to receive cash flows from an asset or has entered into a
pass-through arrangement, and has neither transferred nor retained substantially all the risks and
rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of
the Bank’s continuing involvement in the asset. Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at the lower of the original carrying amount of the
asset and the maximum amount of consideration that the Bank could be required to repay. Where
continuing involvement takes the form of a written and/or purchased option (including a cash-settled
option or similar provision) on the transferred asset, the extent of the Bank’s continuing involvement
is the amount of the transferred asset that the Bank may repurchase, except that in the case of a
written put option (including a cash-settled option or similar provision) on an asset measured at fair
value, the extent of the Bank’s continuing involvement is limited to the lower of the fair value of the
transferred asset and the option exercise price.

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3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

De-recognition of financial assets and financial liabilities (Continued)

Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled
or expires. Where an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as a de-recognition of the original liability and the recognition of
a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.
These include currency in circulation; deposits from governments, banks, financial institutions and
other financial institutions; BOT liquidity papers; poverty reduction and growth facility; IMF liabilities;
and repurchase agreement

Offsetting of financial assets and financial liabilities

Financial assets and financial liabilities are offset and the net amount reported on the statement of
financial position when there is a legally enforceable right to offset the recognised amounts and there
is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Income and expenses are presented on a net basis only when permitted under IFRS, or for gains and
losses arising from a group of similar transactions such as in the Bank’s trading activity.

Determination of fair value

The fair value for financial instruments traded in active markets at reporting date is based on their
quoted market price or dealer price quotations (bid price for long positions and ask price for short
positions), without any deduction for transaction cost.

For all other financial instruments not listed in an active market, the fair value is determined by
using appropriate valuation techniques. Valuation techniques include net present value techniques,
comparison to similar instruments for which market observable prices exist, options pricing models
and other relevant valuation models.

Impairment of financial assets

The impairment of financial assets is based on expected credit losses and the Bank uses the general
approach in determining the impairment of financial assets. A loss allowance is always recognized
for expected credit losses and is re-measured at each reporting date for changes in those expected
credit losses. Determining whether an expected credit loss should be based on 12-month expected
credit losses or lifetime expected credit losses depends on whether there has been a significant
increase in credit risk of the financial asset since initial recognition.

The Bank recognizes loss allowances for Expected Credit Losses (ECL) on the following financial
instruments that are not measured at FVTPL:
1. Cash and balances with central banks and other banks;
2. Foreign currency marketable securities;
3. Government securities;
4. Advances to the Government
5. Loans and advances to Staffs; and
6. Balances with International Monetary Fund.
7. Receivables

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Impairment of financial assets (Continued)
The Bank measures loss allowances at an amount equal to lifetime ECL, except for the following, for which
they are measured as 12-month ECL:
• Debt investment securities, advances to the government and other government securities that are
determined to have low credit risk at the reporting date; and other financial instruments on which
credit risk has not increased significantly since their initial recognition. The Bank considers a debt
security to have low credit risk when their credit risk rating is equivalent to the globally understood
definition of ‘investment grade’.

Measurement of ECL
ECL are a probability-weighted estimate of credit losses. They are measured as follows:

Stage 1: Assets that are performing. If credit risk is low as of the reporting date or the credit risk has not
increased significantly since initial recognition, The Bank recognize a loss allowance at an amount equal to
12-month expected credit losses. This amount of credit losses is intended to represent lifetime expected
credit losses that will result if a default occurs in the 12 months after the reporting date, weighted by the
probability of that default occurring.

Stage 2: Assets that have significant increases in credit risk. In instances where credit risk has increased
significantly since initial recognition, the Bank measures a loss allowance at an amount equal to full lifetime
expected credit losses. That is, the expected credit losses that result from all possible default events over
the life of the financial instrument. For these debt instruments, interest income recognition will be based
on the EIR multiplied by the gross carrying amount.
Stage 3: Credit impaired. For debt instruments that have both a significant increase in credit risk plus
observable evidence of impairment.

Significant Increase in credit risk (SICR)

The Bank decision on whether expected credit losses are based on 12-month expected credit losses or
lifetime expected credit losses depends on whether there has been a significant increase in credit risk
since initial recognition. An assessment of whether credit risk has increased significantly is made at each
reporting date. When making the assessment, the Bank uses the change in the risk of a default occurring
over the expected life of the financial instrument instead of the change in the amount of expected credit
losses. This forms the basis of stage 1, 2 and 3 classification and subsequent migration.

For all financial instruments the Bank considers that financial instruments for which default patterns are
not concentrated at a specific point during the expected life of the financial instrument, changes in the
risk of a default occurring over the next 12 months may be a reasonable approximation of the changes in
the lifetime risk of a default occurring and could be used to determine whether credit risk has increased
significantly since initial recognition.

The appropriateness of using changes in the risk of a default occurring over the next 12 months to determine
whether lifetime expected credit losses should be recognized depends on the facts and circumstances.

The Bank applies qualitative and quantitative criteria for stage classification and for its forward and
backward migration
Quantitative Criteria
The quantitative criteria is based on relative and not absolute changes in credit quality by ratings and days
past due depending on the types of instruments as detailed below:

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Impairment of financial assets (Continued)

Cash and balances with Central Banks and other banks, Holdings of Special Drawing Rights (SDRs),
Quota in International Monetary Fund (IMF) and foreign currency marketable securities: the SICR indicator
is determined by comparing the movement in credit rating at origination date and credit rating at the
reporting date.
Notch movements give an indicator of the number of downgrades required in order for the asset to be
considered to have a significant change in the credit rating. Therefore, highly rated assets for example
those in the AAA category would need to move down three notches to AA- (or below) for it to be considered
a significant increase in credit risk whereas an asset rated B- would only need to move down one notch.
Staff loans: staff who are still in employment with the Bank, there is no increase in credit risk at any point
in time as the cash flow for staff loan is deducted from the payroll directly hence no increase in credit risk.
For staff who are no longer employees of the Bank of Tanzania, the increase in credit risk is determined by
using the backstop indicator of 30 days past due of instalments (as prescribed in the IFRS 9 standard) is
used to determine significant increase in credit risk.
Government securities and Advances to the Government: The Bank considered all government securities
and short-term advances to the Government of United Republic of Tanzania to be low credit risk assets.

Qualitative Criteria
Other factors are considered by the Bank policies in the determination of significant increase in credit risk.
They include but not limited to the following:
1. Significant changes in the terms of the same instrument if it were issued at the reporting date that
indicate a change in credit risk since initial recognition, e.g.: increase in credit spread; more stringent
covenants; increased amounts of collateral or guarantees; or higher income coverage.

2. Significant changes in external market indicators of credit risk for the same financial instrument (or
similar instrument of the borrower), e.g.: credit spread; credit default swap prices; length of time or
the extent to which the fair value of a financial asset has been less than its amortized cost; other
market information related to the borrower, such as changes in the price of a borrower’s debt and
equity instruments; or external credit rating (actual or expected).

3. Changes in the Bank’s credit management approach in relation to the financial instrument (e.g. based
on emerging indicators of changes in the credit risk of the financial instrument, the bank’s credit risk
management practice is expected to become more.

4. active or focused on managing the instrument, including the instrument becoming more closely
monitored or controlled, or the bank specifically intervening with the borrower).

5. Actual or expected adverse changes in business, financial or economic conditions significantly

affecting borrower’s ability to meet its debt obligations (e.g. increase in interest rates or unemployment
rates); operating results of the borrower e.g. declining revenues or margins, increasing operating risks,
working capital deficiencies, decreasing asset quality, increased balance sheet leverage, liquidity,
management problems or changes in the scope of business or organizational structure (such as the
discontinuance of a segment of the business) that results in a significant change in the borrower’s
ability to meet its debt obligations; or regulatory, economic, or technological environment of the
borrower that results in a significant change in the borrower’s ability to meet its debt obligations (e.g.
a decline in the demand for the borrower’s sales product because of a shift in technology).

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Impairment of financial assets (Continued)

6. Significant changes in the value of collateral or in the quality of third-party guarantees or credit
enhancements, which are expected to reduce the borrower’s economic incentive to pay or otherwise
effect the probability of default (e.g. if the value of collateral declines because house prices decline,
borrowers in some jurisdictions have a greater incentive to default on their mortgages); or quality of
a guarantee provided by a shareholder (or an individual’s parents) if the shareholder (or parents) have
an incentive and financial ability to prevent default by capital or cash infusion.

7. Expected changes in the loan documentation (e.g. breach of contract leading to covenant waivers
or amendments, interest payment holidays, interest rate step-ups, requiring additional collateral or
guarantees).

8. Significant changes in the expected performance and behaviour of the borrower, including changes
in the payment status of borrowers in the group

Loss allowances for ECL are presented in the statement of financial position as follows:
1. Financial assets measured at amortized cost: as a deduction from the gross carrying amount of the
assets;

2. Loan commitments and financial guarantee contracts: generally, as a provision;

3. Where a financial instrument includes both a drawn and an undrawn component, and the Bank
cannot identify the ECL on the loan commitment component separately from those on the drawn
component: the Bank presents a combined loss allowance for both components. The combined
amount is presented as a deduction from the gross carrying amount of the drawn component. Any
excess of the loss allowance over the gross amount of the drawn component is presented as a
provision; and

4. Debt instruments measured at FVOCI: no loss allowance is recognized in the statement of financial
position because the carrying amount of these assets is their fair value.

General approach to collective or individual assessment

The Bank’s measurement of expected credit losses is based on the weighted average credit loss. As a
result, the measurement of the loss allowance should be the same regardless of whether it is measured
on an individual basis or a collective basis although measurement on a collective basis is accepted by the
Bank if more practical for large portfolios of items.

The assessment of whether there has been a significant increase in credit risk may be on a collective basis
where the Bank is not able to identify significant changes in credit risk on individual financial instruments
before the financial instrument becomes past due.

Collateral
The Bank obtains collateral where appropriate, from Staff to manage their credit risk exposure to the Bank
staff. The collateral forms a lien over the customer’s assets and gives the Bank a claim on these assets for
both existing and future customers in the event that the customer default

Other liabilities
Other liabilities are stated at their nominal value/cost, which approximates fair value due to the short term
nature of the obligation.

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3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Items in course of settlement, Advance to the Government and Other assets

These are measured at carrying amounts which approximates their fair value due to the short period
between reporting date and settlements of these assets.

Cash and Cash equivalent

Cash and cash equivalent comprise of demand and time deposit with central banks and commercial
banks and holding of notes denominated in foreign currency. Cash and cash equivalent is carried at
amortised cost in the statement of financial position. Due to their short-term nature, the carrying amount
approximates the fair value.

Escrow Accounts
These represent funds held by the Bank in foreign exchange, as funds deposited by the United Republic
of Tanzania following a memorandum of economic and financial policies arrangement pending agreement
with creditors.

The escrow fund is both an asset and a liability in the Bank’s books. However, the accounts cannot be
netted against each other because they must be visible as both asset and liability according to accounting
standards

Periodically the BoT Escrow balance is reviewed to ensure that sufficient funds will be available when
payments are due.

Both assets and liabilities representing these funds are initially measured at fair value and subsequently
measured at amortised cost where they have specific dates of maturity. Details of the accounts have been
shown under Note 17 of the accounts.

Derivatives
A derivative is a financial instrument or other contract within the scope of IFRS with all three of the following
characteristics:
• Its value changes in response to the change in a specified variable such as interest rate, financial
instrument price or foreign exchange rate.
• It requires no initial net investment or an initial net investment that is smaller than would be required
for other types of contracts that would be expected to have a similar response to changes in market
factors.
• It is settled at future date.

Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into
and are subsequently re-measured at their fair value. Fair values are obtained from market observable
prices including recent market transactions, or valuation techniques which incorporate market observable
input, such as discounted cash-flow models. Generally, the best evidence of the fair value of a derivative
at initial recognition is the transaction price (i.e. the fair value of the consideration given or received). All
derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is
negative.

The Bank uses derivatives mostly for hedging in risk management and liquidity support in monetary
implementation. The Bank does not apply the optional hedge accounting rules of IFRS 9.

103
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

International Monetary Fund (IMF) related balances

Relationship
The Bank is the fiscal and depository agent of United Republic of Tanzania for transactions with the
International Monetary Fund (IMF). Financial resources availed to Tanzania by the Fund are channelled
through the Bank. Repayment of the IMF loans as well as charges is the responsibility of the Bank.

Currency of Transactions with the IMF

Borrowings from and repayments to the IMF are denominated in Special Drawings Rights (SDRs).
The SDR balances in IMF accounts are translated into TZS and any unrealised gains or losses are
accounted for in profit and loss account in accordance with IAS 21 – Effects of changes in foreign
exchange rates.

Quota in IMF, Interest and Charges

Borrowings from the related Tanzania’s quota are non-interest bearing with no stated maturity, while
borrowings from the General Resources Account of the IMF bears interest at rates set by the IMF on
a weekly basis and are repayable according to the repayment schedules of the agreement.

Inventories
The Bank owns all inventories stated in the statement of financial position. Inventories are valued
at the lower of cost and net realizable value. Cost is determined using the weighted average cost
method. Net realizable value is the estimated selling price in the ordinary course of business less
estimated cost necessary to make the sale. Writing down of values of inventories is made for slow
moving and obsolete inventories.

Credit Guarantee Schemes

These are schemes operated in accordance with the rules governing them and administered by the
Bank on behalf of the URT Government as stipulated in their respective agency agreements. The
primary objective of the schemes is to facilitate access to the credit facilities by guaranteeing loans
granted by the participating financial institutions to small and medium enterprises, exporters and
development projects.

The rules of the schemes include a requirement for the financial institutions to properly assess the
projects’ viability, as to adequacy of loan security and approve the loan prior to applying for the
guarantee. Because of the nature of the loan transactions, contingent liabilities exist in respect of
possible default.

104
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

4. SIGNIFICANT ACCOUNTING JUDGEMENT AND ESTIMATES

The preparation of financial statements in conformity with IFRS requires the use of estimates and
judgment that affect the reported amounts of assets, liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Although these estimates are based on the Directors’ best knowledge of
current events and actions, actual results ultimately may differ from those estimates. The estimates
and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision affects only that period or
in the period of the revision and future periods if the revision affects both current and future periods.
The most significant use of judgement and estimates are as follows:

(a) Going concern

The Bank’s Management has made an assessment of the Bank’s ability to continue as a going
concern. Management is satisfied that the Bank has resources to continue in operation for the
foreseeable future. Furthermore, the Management is not aware of any material uncertainties that may
cast significant doubt upon the Bank’s ability to continue as a going concern. Therefore, the financial
statements continue to be prepared on a going concern basis

(b) Impairment of assets carried at amortised cost

Impairment losses on items in cash and balances with central banks, escrow account, items in course
of settlement, holdings of special drawing rights (SDR), quota in international monetary fund (IMF)
government securities, advances to the government, loans and receivables and other assets.

The Bank reviews its financial assets measured at amortised cost at each reporting date to assess
whether an impairment loss should be recognised in profit or loss. In particular, judgment by the
Directors is required in the estimation of the amount and timing of future cash flows when determining
the level of impairment loss required. Such estimates are based on the assumptions about a number
of factors and actual results may differ, resulting in future changes in the impairment.

The Bank makes judgment as to whether there is any observable data indicating that there is a
measurable decrease in the estimated future cash flows in an individual asset in that portfolio. This
evidence may include observable data indicating that there has been an adverse change in the
payment status of borrowers, or national or local economic conditions that correlate with defaults on
assets. Management uses estimates based on historical loss experience for assets with credit risk
characteristics and objective evidence of impairment similar to those in the portfolio when scheduling
its future cash flows. The methodology and assumptions used for estimating both the amount and
timing of future cash flows are reviewed regularly to reduce any differences between loss estimates
and actual loss incurred.

105
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

4. SIGNIFICANT ACCOUNTING JUDGEMENT AND ESTIMATES (CONTINUED)

(c) Impairment of other financial assets
The Bank adopted an incurred loss approach to impairment. Impairment losses are incurred only if there
is objective evidence of impairment as a result of occurrence of one or more past events since initial
recognition.

Impairment exists when the carrying amount exceeds its recoverable amount and the asset is written down
to the recoverable amount. Future cash flows on a group of financial assets that are collectively evaluated
for impairment are estimated on the basis of historical loss experience for assets with characteristics
similar to those in the group. Historical loss experience is adjusted on the basis of current observable
data to reflect the effects of current conditions that did not affect the years on which the historical loss
experience is based and to remove the effects of conditions in the historical period that do not exist
currently.

Estimates of changes in future cash flows reflect, and are directionally consistent with, changes in
related observable data from year to year (such as changes in unemployment rates, property prices,
commodity prices, payment status, or other factors that are indicative of incurred losses in the Bank and
their magnitude). The methodology and assumptions used for estimating future cash flows are reviewed
regularly to reduce any differences between loss estimates and actual loss experience.

(d) Fair value of financial instruments

Where the fair values of financial assets and financial liabilities recorded in the Statement of Financial
Position cannot be derived from active markets, they are determined using a variety of valuation techniques
that include the use of mathematical models. The input to these models is taken from observable markets
where possible, but where this is not feasible, a degree of judgement is required in establishing fair values.
The judgements include considerations of liquidity and model inputs such as correlation and volatility for
longer dated derivatives and discount rates. Details have been provided under Note 43 to these accounts.

(e) Useful lives of property and equipment

Pursuant to the requirements of IAS 16 (Property, Plant and Equipment) and IAS 8 (Accounting Policies,
Changes in Accounting Estimates and Errors) the Bank makes accounting estimation of the useful lives
of assets based on the expected pattern of consumption of the future economic benefits and reviews its
depreciation rates at each reporting date.

(f) Retirement benefits

Under IAS 19 measurement of scheme liabilities must be calculated under the projected unit credit
method, which requires certain demographic, financial and future salary growth assumptions. A degree
of judgement is required in establishing market yields, long term expectations, the notional contribution
rate and other inputs used in the actuarial valuation. Details have been provided under Note 45 to these
accounts.

(g) Contingent liabilities

The Bank has provided for the liabilities arising out of contractual obligations. Professional expert advice
is taken on establishing litigation provisions. Provisions for legal proceedings and regulatory matters
typically require a higher degree of judgments than other types of provisions. When cases are at an early
stage, accounting judgments can be difficult because of the high degree of uncertainty associated with
determining whether a present obligation exists as a result of a past event, estimating the probability of
outflows and making estimates of the amount of any outflows that may arise. As matters progress through

106
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

4. SIGNIFICANT ACCOUNTING JUDGEMENT AND ESTIMATES (CONTINUED)

(g) Contingent liabilities

various stages of the cases. Management together with legal advisers evaluate on an ongoing basis
whether provisions should be recognised, and the estimated amounts of any such provisions, revising
previous judgments and estimates as appropriate.

107
 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

5. INTEREST INCOME

Interest income from foreign operations relates to interest earned from investments in foreign fixed income securities, money market operations
and foreign deposits. Interest on domestic investments relates to interest earned from investments in United Republic of Tanzania government
bonds, stocks and discounted treasury bills.

30.06.2019 30.06.2018
Received Accrued Total Received Accrued Total
TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000
From foreign operations

GBP investments 6,653,335 5,284,108 11,937,443 10,702,933 3,527,055 14,229,988

USD investments 109,740,100 25,533,333 135,273,433 120,465,982 29,499,374 149,965,356
EUR investments (1,403,562) - (1,403,562) 10,718,419 4,179,124 14,897,543

108
AUD investments 8,067,517 2,293,193 10,360,710 13,018,512 3,574,973 16,593,485
CNY investments 14,512,656 1,808,279 16,320,935 13,862,205 1,879,191 15,741,396
Other foreign interest income 2,394,208 - 2,394,208 1,136,915 - 1,136,915

139,964,254 34,918,913 174,883,167 169,904,966 42,659,717 212,564,683

From domestic operations
Bank of Tanzania Annual Report 2018/19

Interest on domestic investments 101,782,982 28,044,450 129,827,432 108,038,339 26,510,119 134,548,458

Interest on loans and advances 7,123,473 - 7,123,473 - 39,651,957 39,651,957
Interest on staff loans 355,178 - 355,178 372,128 - 372,128
Interest on Repurchase Agreements
(Reverse REPO) 14,623,603 - 14,623,603 620,121 - 620,121

123,885,236 28,044,450 151,929,686 109,030,588 66,162,076 175,192,664

263,849,490 62,963,363 326,812,853 278,935,554 108,821,793 387,757,347

 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

5. INTEREST INCOME
Classification of interest income arising from financial instruments is indicated below:

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

Income from instruments measured at fair value 74,207,101 144,045,431

Income from instruments measured at amortised cost 252,605,752 243,711,916

326,812,853 387,757,347

6. INTEREST EXPENSES

30.06.2019 30.06.2018

109
Paid Accrued Total Paid Accrued Total
TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Interest on BoT liquidity papers 10,111,150 3,727,279 13,838,429 24,975,967 7,890,459 32,866,426
Interest on repurchase agreements 71,342 - 71,342 855,838 - 855,838
Charges on IMF Drawings 6,392,142 - 6,392,142 4,520,852 - 4,520,852
Bank of Tanzania Annual Report 2018/19

16,574,634 3,727,279 20,301,913 30,352,657 7,890,459 38,243,116

The Bank issues 35-Day, 91-Day, 182-Day and 364-Day Treasury Bills to mop up excess liquidity in the economy. The interest expense arising
from liquidity mop up activities is shared between the Bank and the Government of the United Republic of Tanzania in accordance with the
sharing ratios agreed in Memorandum of Understanding (MOU) in force.
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

7. FOREIGN EXCHANGE REVALUATION GAINS

During the year, the Bank recorded a total net foreign exchange revaluation gains amounting to TZS
8,437.0 million (2018: TZS 150,312.3 million). This amount has been included in the statement of
profit or loss in determining the Bank’s net operating profit for the year in order to comply with the
requirements of IAS 21 - Accounting for the Effects of Changes in Foreign Exchange Rates. Out of
the total net foreign exchange revaluation gains, an amount of TZS 3,077.3 million (2018: 79,730.9
million) relating to unrealised gain is not available for distribution of dividend and according to the
Bank of Tanzania Act, 2006 has been transferred to the foreign exchange revaluation reserve (refer to
Note 41 (g).

Analysis of foreign exchange valuation 30.06.2019 30.06.2018

TZS ‘000 TZS ‘000

Net realised foreign exchange revaluation gains during the year 5,359,748 70,581,396
Net unrealised foreign exchange revaluation gains during the year 3,077,265 79,730,889

8,437,013 150,312,285

8. NET GAINS/ (LOSSES) ON FINANCIAL ASSETS

30.06.2019 30.06.2018
Realised Unrealised Total Realised Unrealised Total
TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

USD 62,448,500 8,636,710 71,085,210 (11,812,019) (46,108,365) (57,920,384)

GBP (5,801,817) - (5,801,817) (1,809,306) (11,721,406) (13,530,711)
EUR 751,940 - 751,940 (4,684,990) (9,982,843) (14,667,833)
AUD 1,878,458 - 1,878,458 (1,178,024) (5,136,963) (6,314,987)
CNY (705,426) - (705,426) 383,459 2,515,807 2,899,266
Total 58,571,655 8,636,710 67,208,365 (19,100,880) (70,433,770) (89,534,649)

This represents the net increase or decrease in fair value of the foreign financial assets. The value of
this balance aggregated to a gain of TZS 67,208.4 million (2018: loss of TZS 89,534.6 million).

9. FEES AND COMMISSIONS

Commission on foreign operations relates to income received from buying or selling foreign currency,
and funds transfers by SWIFT and TISS.
30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

Commission on foreign operations 47,227,212 41,731,113

Tanzania Interbank Settlement System (TISS) fees and charges 2,501,915 1,984,109
Bureau de change application fees 43,000 104,000
Bureau de change registration fees 9,000 19,000
Bureau de change penalty fees 1,325,000 345,000
Clearing House fines and penalties and other fees 20 -
Tender application fees 35,450 28,400
Banks and financial institutions applications/licensing fees 51,000 229,750

51,192,597 44,441,372

110
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

10. OTHER OPERATING INCOME

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000
Foreign operations
Gains on inter-bank foreign exchange market (IFEM) operations - -
Interest from FVPL investments 13,863,314
Commission and fees on foreign operations 2,566,642 -
Realised gains on de-recognition of foreign currency marketa-
ble securities - 319,983
Dividend from equity investment 722,223 675,807

Other income from foreign operations 17,152,179 995,790

Domestic operations

Miscellaneous income 4,420,451 3,615,872

Income - domestic operations 755,331 766,199
Staff contributions * 5,183,760 3,884,853
Rental income from staff quarters 804,480 686,068
Income from hostel accommodation 73,628 117,578
Income from cafeteria operations 39,444 58,326

Other income from domestic operations 11,277,094 9,128,896

Total other income 28,429,273 10,124,686

*Net contribution to Staff Housing Compensatory Fund

11. ADMINISTRATIVE EXPENSES

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000
Maintenance - computer, software and related expenses 13,044,111 13,367,241
Transport and traveling expenses 11,681,588 9,869,498
Meetings, conferences and seminars 4,652,888 4,738,793
Water and electricity 5,951,565 6,231,844
Maintenance - bank premises 7,383,074 8,624,878
Insurance expenses 4,289,390 4,257,261
Fees, rates and security expenses 2,813,254 2,925,535
Printing, stationery and office supplies 1,443,109 2,317,772
Telecommunication and postage 2,132,100 1,792,455
Board expenses 716,312 1,231,641
Other administrative expenses 7,958,171 1,458,482
Maintenance - furniture, machinery and equipment 2,002,685 2,155,577
Audit fees 491,998 1,027,699
Budget and annual accounts preparation expenses 888,952 818,587
Hospitality 221,768 325,345
Audit related expenses 168,596 106,014
Legal and investigation expenses 546,559 168,982

66,386,120 61,417,604

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 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

12. CURRENCY AND RELATED EXPENSES

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

Notes printing and related expenses (Note 26) 43,143,861 48,068,107

Coins minting and related expenses (Note 26) 4,661,779 7,507,086

Cost of currency issued into circulation 47,805,640 55,575,193

Maintenance of currency machines 3,010,691 7,447,996

Currency transport, storage and handling 4,097,315 4,582,566
Other currency expenses 924,477 4,325,840

Other currency related costs 8,032,483 16,356,402

Total currency and related expenses 55,838,123 71,931,595

The amount of TZS 47,805.6 million (2018: TZS 55,575.2 million) is in respect of notes printing and
coins minting and related expenses, refers to the proportionately amortised portion of deferred notes
printing and coins minting cost for the new currency notes and coins that were issued into circulation
during the year.

A total of TZS 3,010.7 million (2018: TZS 7,448.0 million) was incurred during the year in respect of
currency machines maintenance expenses. The amount of TZS 4,092.7 million (2018: TZS 4,582.6
million) relates to currency distribution expenses that include; transportation, handling, storage, and
other related expenses incurred during the year. Other currency related expenses aggregated to TZS
924.25 million (2018: TZS 4,325.8 million).

13. PERSONNEL EXPENSES

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000
Staff salaries and related expenses 76,936,922 76,494,475
Contribution to social security schemes 10,713,574 10,435,431
Staff medical expenses 7,939,752 8,409,833
Travel on leave expenses 5,482,463 5,351,706
Management car maintenance and other related expenses 6,880,963 5,969,307
Staff retirement benefit 4,221,867 4,089,365
Staff training expenses 3,920,567 3,463,295
Motor vehicles expenses 912,893 862,152
HR planning policies expenses 2,825,332 1,269,565
Workers Council expenses 1,119,856 1,019,302
Furniture grant expenses 828,349 361,718
Cafeteria expenses 1,730,436 1,700,274
Tanzania Union for Industrial and Commercial (TUICO) expenses 695,763 656,487
Staff uniforms expenses 288,692 358,648
Condolence and related expenses 185,096 245,938
Course functions and field trips expenses 7,143 17,610
124,689,668 120,705,106

112
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

14. OTHER OPERATING EXPENSES

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000
Foreign operations
Foreign reserve management expenses 1,531,779 1,354,894
Financial markets development expenses 1,620,750 1,827,573
Commission and fees on foreign operations 130,770 4,083,330

3,283,299 7,265,797

Domestic operations
Contribution to professional associations, charities 4,094,912 2,841,993
Fair value changes on special securities*
58,515,371 0
Contribution to national development programs/projects 725,900 695,520
Subscriptions 183,723 128,788

63,519,906 3,666,301

Cheques issued expenses 72,060 64,359

72,060 64,359

66,875,265 10,996,457

*The amount of TZS 58,515.4 million resulted from fair valuation of government securities to align
with IFRS 9 requirement on initial recognition.

Analysis of donations, contributions and subscriptions

Macroeconomic and Financial Management Institute of Eastern and

903,703 863,031
Southern Africa (MEFMI)
Second Generation of Financial Sector Reforms 311,997 138,003
Capital Markets and Securities Authority 708,750 708,750
Tanzania Institute of Bankers 612,400 612,400
Contribution to National Board of Accountants and Auditors (NBAA)
1,515,152 458,103
and National Board of Material Management (NBMM)
Deposit Insurance Board 305,362 238,417
Contribution to African Research Consortium 227,600 267,207
Contribution - Committee of Central Bank Governors (CCBG) 41,317 40,310
African Association of Central Banks and African Rural and Agriculture
113,253 64,480
Credit Association
Donations and other contributions 265,000 265,000

5,004,534 3,655,701

113
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

15. COMPONENTS OF OTHER COMPREHENSIVE INCOME

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

Actuarial gain (loss) 9,581,148 (15,009,000)

Net revaluation gains on equity investments 3,868,954 1,586,330
Net unrealised gains on marketable securities-FOCI 46,887,747 -
60,337,849 (13,422,670)

Other comprehensive income includes TZS 46,887.7 million which represents changes in prices of
marketable securities portfolio which were reclassified to Fair Value Through Other Comprehensive
Income following adoption of the last phase of IFRS 9.The gain of TZS 3,869.0 million (2018: gain
of TZS 1,586.3 million) is in respect of revaluation on the Bank’s shares in Afrexim bank and SWIFT
measured at FVTOCI. Except for net realised gains on marketable securities, other gains/ losses
under OCI are not recycled to profit or loss. The computation of actuarial gain/loss is reported under
note 46.

16. CASH AND BALANCES WITH CENTRAL BANKS AND OTHER BANKS

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

Cash balances with Central Banks 562,188,929 788,596,204

Demand, time deposits with commercial banks 4,176,698,479 4,971,566,339

Foreign Currency notes and coins 69,765,367 4,820,794
Accrued interest on deposits 8,324,223 8,530,765
Provision for impairment (276,784) -

4,816,700,214 5,773,514,102

Cash and cash equivalents consist of demand deposits; two-day notice accounts and time deposits
with maturities of less than three months and carry interest at market rates.

17. ESCROW ACCOUNTS

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

Bank of Tanzania Escrow 11,218,286 11,044,657

This account was opened under the memorandum of economic and financial policies arrangement of the
United Republic of Tanzania Government. Under the arrangement it was agreed to establish an external
escrow account into which the URT Government would pay a significant portion of the estimated debt service

114
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

17. ESCROW ACCOUNTS (CONTINUED)

due to the relevant group of non-Paris creditors. The URT Government Deposits the funds into the account
pending agreement with creditors. In line with the arrangement, the funds are available to confirmed
creditors.

The Government deposited funds into this account once in March 2003 of USD 5.0 million that was
equivalent to TZS 5,256.0 million. Some of the funds were utilised to settle due obligations before financial
crises. The balance on the account earns interest. As at 30 June 2019, the account had a balance of USD
4.9 million equivalent to TZS 11,218.3 million. (2018: USD 4.9 million equivalent to TZS 11,044.7 million).

18. ITEMS IN COURSE OF SETTLEMENT

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

BoT net clearing account (25,755,244) (551,547)

This balance represents values of outward clearing instruments, held by the Bank while awaiting clearance
in the normal course of business. This includes values of clearing instruments both as inward and
outward items and cheques deposited into Government accounts for settlement of various obligations in
accordance with the rules and regulations as set in the clearing house.

19. INTERNATIONAL MONETARY FUND (IMF) RELATED BALANCES

30.06.2019 30.06.2018
Equivalent Equivalent Equivalent Equivalent
SDR ‘000 TZS ‘000 SDR ‘000 TZS ‘000
Assets
Holdings of SDR’s 21,173 67,392,346 1,014 3,232,160
Quota in IMF 397,800 1,266,185,402 397,800 1,268,292,685
418,973 1,333,577,748 398,814 1,271,524,845
Liabilities
IMF Account No.1 338,071 1,076,071,239 338,071 1,077,862,120
IMF Account No.2 3 11,126 3 11,143
338,074 1,076,082,365 338,074 1,077,873,263
Allocation of SDRs 190,527 606,392,081 190,527 607,401,286

The Tanzania’s quota in IMF stood at SDR 397.8 million equivalent to TZS 1,266,185.4 million (2018:
SDR 397.8 million equivalent to TZS 1,268,292.7 million). On a quarterly basis, the IMF pays interest
(remuneration) to those members who have a remunerated reserve tranche position at the adjusted
rate of remuneration. As at 30 June 2019, reserve tranche stood at SDR 59.7 million (2018: SDR 59.7
million) whereas the adjusted rate of remuneration was 0.5 percent (2018: 0.5 percent).

Participation in the HIPC Initiative

The United Republic of Tanzania enjoys a debt relief program under the Highly Indebted Poor
Countries (HIPC) initiative. Accordingly, the IMF administers a donor-contributed Fund in the form
of a PRGF-HIPC Trust Umbrella Account for Tanzania. The facility is used to settle part of Tanzania’s
PRGF Loans as and when they fall due. As at 30 June 2019, the facility had a nil balance (2018: nil).

115
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

20. FOREIGN CURRENCY MARKETABLE SECURITIES

These are financial assets consisting of foreign currency marketable securities that are internally
managed, and portfolio externally managed by the World Bank Treasury under a special program
known as Reserve Advisory Management Program (RAMP). Majority of such securities are sovereign
issues with a minimum credit rating of AA, bearing fixed interest and specified maturities. The balance
of this reserve was as follows:
30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

Internally Managed Portfolio in Foreign Currency Marketable

Securities-FVOCI 4,397,172,500

Marketable securities- FVTPL 638,468,831 6,478,286,462

Accrued interest 30,064,397 34,128,953

5,065,705,728 6,512,415,415

The internally managed portfolio in foreign currency marketable securities – FVOCI came into effect in 2019,
following adoption of the last version of IFRS 9 on classifications of financial instruments.

Analysis of foreign currency marketable securities by concentration into sovereign issues, supranational
securities and agency securities by fair values:

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000
Sovereign Issues
USD 3,224,015,008 4,435,600,796
GBP 645,317,558 383,240,764
EUR 0 477,957,793
AUD 314,452,457 404,959,248
CNY 198,866,960 254,090,254

4,382,651,983 5,955,848,855

Supranational Securities
USD 275,010,130 195,453,545
EUR - 6,661,682
AUD 7,123,155 7,343,285

282,133,285 209,458,512

Agency Securities
USD 358,939,298 204,748,039
EUR - 6,637,462

358,939,298 211,385,501
Corporate Securities
USD 41,981,162 101,593,593
41,981,162 101,593,593

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 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

20. FOREIGN CURRENCY MARKETABLE SECURITIES (CONTINUED)

Total Investments
USD 3,878,409,248 4,937,395,974
GBP 640,145,900 383,240,764
EUR - 491,256,937
AUD 319,365,074 412,302,533
CNY 197,721,108 254,090,254
Accrued Interest 30,064,397 34,128,953

5,065,705,728 6,512,415,415

21. EQUITY INVESTMENTS

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000
Investment in equity are measured at Fair Value through Other
Comprehensive Income (FVTOCI):
Equity investment in Afreximbank 35,930,454 31,045,932
Equity investment in SWIFT 1,142,781 1,157,813

37,073,235 32,203,745

Equity investment in Afreximbank

The African Export-Import Bank (Afreximbank) is a supranational institution, established on 27
October 1993. The Bank holds an investment in the equity of Afreximbank. Afreximbank is a grouping
of regional central banks and financial institutions designed to facilitate intra and extra African trade.
During the year, the Bank’s acquired 17 share from Afreximbank hence as at June 2019 equity interest
in Afreximbank is 776 ordinary shares (2018:759) of par value of USD 10,000 each. As at 30 June
2019, the Bank’s equity aggregated to USD 3,104,000 representing two fifth of the Bank’s paid up
shares in Afreximbank (2018: USD 3,036,000). The proportion of the Banks equity interest to the total
holding in this bank is 0.60 percent. These shares are measured at FVTOCI.

Equity Investment in SWIFT

Society for Worldwide Interbank Financial Telecommunications (SWIFT) (the “Company”) is a
company founded in Brussels in 1973 to provide a secured network that enables financial institutions
worldwide to send and receive information related to financial transactions in a secure, standardised
and reliable environment.

SWIFT members hold interest in the cooperatives through shares. The Company manages the shares
through the reallocation principle defined in its By-laws and general membership rules.

The number of shares allocated to each member is determined at least after every three years
according to the Bylaws of the Company and is proportional to the annual contributions paid for the
network-based services to the Company. The members have the obligation to give up or take up the
resulting change in shares. The By-laws of the Company state that shares are only reimbursed when
a member resigns, or when a member has to give up shares following reallocation. This investment is
measured at fair value through other comprehensive income. During the year, under review the Bank
had a total of 85 shares (2018: 85).

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 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

22. GOVERNMENT SECURITIES

Amortised cost: 30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

Stocks 51,333,308 51,333,308

Treasury Bills 7,545,065 467,747
Special Treasury Bonds 969,336,205 1,077,673,228
Treasury EPA Stock 201,391,122 205,743,889

Sub-total 1,229,605,700 1,335,218,172

Accrued interest 28,044,450 26,510,119

Accrued interest receivable - -

Total 1,257,650,150 1,361,728,291

The Bank holds various government fixed income securities issued by the United Republic of Tanzania
Government. Treasury special stocks and bonds are issued at face value, discount or premium. Treasury
stocks are issued at a fixed coupon.

Stocks
Advances granted to the Government which were to be repaid at the end of financial year 1994 were
converted into five years 25% Special Stock 1993/98 of TZS 42,243.0 million. Thereafter in 1999, the stock
plus the earned interest were restructured into two stocks namely 15% Special Treasury Stock 2018/19
with face value of TZS 51,333.3 million. As at 30 June 2019 the value of stock stood at TZS 51,333.3
million (2018: TZS 51,333.3 million)

Treasury Bills
This represents treasury bills discounted by commercial banks to the Bank. As at 30 June 2019, the value
of treasury bills discounted was TZS 7,545.1 million (2018: TZS 467.7 million).

Special Treasury Bonds

Treasury Special Bonds are long-term coupon instruments issued at fixed coupon for Government
financing. These include:

The 10 Year Special Government Bonds 2009/2019 with a face value of TZS 150,000.0 million had partial
redemption of TZS 50,000.0 million paid on 3 July 2017 and 1 July 2018. At 30 June 2019, the balance
stood at TZS 50,000.0 million (2018: TZS 100,000.0 million). A 10 Years 8% special bond 2019/19 with
face value of TZS 323,000.0 million was issued on 2 June 2009 and is payable semi-annually. The bond
matured on 2 June, 2019. This bond was rolled over into three maturities of 5 years at coupon of 5.5% TZS
100,000 .0 million,6 years at coupon of 5.75% TZS 100,000.0 million and 7 years at coupon 6.0 % TZS
123.000.0 million each interest payable semi-annually. The initial purpose of the two bonds was to bridge
Government revenue shortfall mainly attributed to the impact of the global financial crisis.

The 5-year special bond of TZS 155,000.0 million with floating interest rate based on the prevailing
average yield to maturity of 14.92% issued by the Government to finance horticultural expansion
project in Arusha matured on 28 December 2015. This bond was rolled over upon its maturity and
was divided into three bonds as follows TZS 55,000.0 million 2 years special bond with a coupon
of 7.82% matured and repaid on 29 December 2017 and TZS 50,000.0 million special bond with a
coupon of 8.27% and TZS 50,000.0 million special bond with a coupon of 9.18 % are yet to mature.

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 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

22. GOVERNMENT SECURITIES (CONTINUED)

Special Treasury Bonds (Continued)
The Government issued a 10-year bond of face value TZS 85,188.8 million which was rolled over
from Loan Advances Realisation Trust (LART) Bonds on 30 June 2011. It carries 11% interest payable
semi-annually on 30 June and 31 December.

On 12 October 2012, the Government issued a 10-Year 2012/2022 Special Bond with face value of
TZS 469,484.4 million. The bond was issued to replace the accumulated deficit position of the United
Republic of Tanzania Government as at 30 June 2012. The bond bears an interest rate of 11.44%
payable semi-annually.

The value of Special Bonds as at 30 June 2019 was TZS 969,336.2 million (2018: TZS 1,077,673.2million).

Treasury EPA Stock

Treasury EPA Stocks represent External Payment Arrears (EPA) that date back to 1980’s when
the defunct National Bank of Commerce (NBC) had external commercial obligations that were in
arrears for lack of foreign exchange. These were later on transferred to the Bank to facilitate their
administration and control. According to the arrangement, the externalisation of EPA obligations was
done based on agreed exchange rates. The exchange rate differential between the exchange rate
prevailing when the beneficiaries are paid and the agreed rate resulted into exchange losses, which
are recoverable from the Government. Funding of the resulting obligations was obtained through
issuance of EPA stocks.

The Government effective from 1st August 2008 reissued two EPA Special Stocks namely EPA Special
Stock 2002/2052 and EPA Special Stock 2005/2055 with values of TZS 4,352.8 million and TZS
65,646.1 million and replaced them with EPA Special Stock 2008/18 and EPA Special Stock 2008/23
respectively. Their tenures were reviewed from 50 years and 55 years to 10 years and 15 years with
annual coupons of 7.5 percent and 8.0 percent payable semi-annually respectively. However, the
TZS 4,352.8 Stock 2008/18 matured and was repaid on maturity. Furthermore, on 1 August 2008
the Government issued EPA Special Stock with face value of TZS 135,745.1 million to accommodate
external payment arrears exchange losses incurred up to 31 December 2007. The stock has a maturity
of 20 years with annual coupon of 8.5% payable semi-annually. As at 30 June 2019, the aggregate
position of Special EPA stocks stood at TZS 201,391.1 million (2018: TZS 205,743.9 million).

23. ADVANCES TO THE GOVERNMENT

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000
Advances to the Government (URT) - Note 33 1,238,447,385 1,943,822,268

Advances to the Governments represent temporary financial accommodation to finance short term
financial gap between the receipts from budgeted revenue and Governments expenditure. The
advances bear interest at rates equivalent to the weighted average yield of short-term maturities as
determined by the Bank. Total advance outstanding at the year-end amounted to, TZS 1,238,447.4
million (2018: TZS 1,943,822.3 million) as summarised under Note 33.

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 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

24. LOANS AND RECEIVABLES

30.06.2019 01.07.2018 30.06.2018
TZS “000” TZS “000” TZS “000”

Accounts receivable 356,816,290 347,628,592 347,628,592

Staff loans and advances 75,781,027 77,540,239 77,540,239
Cash loss recoverable from NBC Limited 5,144,000 5,144,000 5,144,000
Intermediary accounts receivable - - -
437,741,317 430,312,831 430,312,831
Provision for impairment (15,220,596) (15,860,366) (12,193,689)
422,520,721 414,452,465 418,119,142

30.06.2019 01.07.2018 30.06.2018

Analysis of impairment by line items TZS “000” TZS “000” TZS “000”
Interest recoverable from government 5,241,621 5,241,621 5,241,621
Cash loss recoverable from NBC Limited 5,144,000 5,144,000 5,144,000
Staff loans and advances 3,406,287 5,096,465 1,521,698
Accounts receivable 1,428,688 378,280 286,370
15,220,596 15,860,366 12,193,689

Movement in provision for impairment Opening balance

30.06.2019 01.07.2018 30.06.2018
TZS “000” TZS “000” TZS “000”
Balance at the beginning of the year 15,860,366 12,193,689 11,848,041
Impairment on staff loans and advances - 3,574,767 450,648
Impairment of account receivables - 91,910 -
Impairment reversal of account receivables and (639,770)
staff loans
Reversal during the year (to ECGS impairment) - (105,000)

Balance at the end of the year 15,220,596 15,860,366 12,193,689

The Bank did not pledge any loans and receivables as securities against liabilities in 2019 and 2018. Accounts
receivable represent short term claims which are expected to be recovered within a period not exceeding
twelve months and outstanding transactions made on trade date.

a) Accounts Receivable:
Major components under accounts receivable include the following:

(i) Interest receivable on Liquidity Management:

Included under accounts receivable is TZS 19,909.1 million (2018: TZS 20,531.4 million) relating to 2018/19
URT Government share in respect of interest on liquidity management costs. The URT Government and
Bank of Tanzania share liquidity management cost based on the formula contained in the Memorandum of
Understanding between BoT and the Government.

(ii) Interest receivable on overdrawn Government accounts:

During the year, the URT Government net position was overdrawn by TZS 1,238,447.4 million (2018: TZS
1,943,822.3 million). Pursuant to Section 34 of the Bank of Tanzania Act, 2006, an amount of TZS 7,123.4

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 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

24. LOANS AND RECEIVABLES (CONTINUED)

a) Accounts Receivable: (Continued)

(ii) Interest receivable on overdrawn Government accounts: (Continued)
million (2018: TZS 39,651.9 million) was charged to the Government as interest on overdrawn position.
Interest outstanding as at 30 June 2019 amounted to TZS 232,888.4 million (2018: TZS 239,927.0
million).

iii) Standby credit facility:

The commercial banks have access to the standby credit facility with a maturity of one day to
settle their obligations in their clearing balances to avoid systematic risk when their balances are
not sufficient to cover their obligations. Such facility is available at market rate prevailing on that
particular date subject to provision of allowable securities as collateral. At 30 June 2019, the facility
had a balance of TZS 1005.6 million as compared to TZS 29,000.0 million balance as at 30 June 2018

b) Staff Loans and Advances:

Employees of the Bank are entitled to loans and advances as approved in accordance with the
Bank’s Staff Bylaws and Financial Regulations in force. Staff loans are granted to employees to assist
them in acquisition of residential houses, motor vehicles, computers, furniture and short-term needs.
The advances/loans are granted at preferential rates of interest determined by the Bank presently
at 5.0 percent fixed over the period of the loan. These loans and advances are recovered from
the employees’ monthly salaries. The facilities are secured against the borrowers’ employment and
terminal benefits. As at 30 June 2019, the balance of staff loans and advances was TZS 75,781.0
million (2018: TZS 77,540.2 million).

25. INVENTORIES

30.06.2019 30.06.2018
The inventory balance consists of the following: TZS ‘000 TZS ‘000

Currency machine spare parts 6,394,718 4,685,348

Building, machinery and maintenance consumables 969,970 918,767
Stationery 597,334 553,025
ICT accessories and consumables 623,009 105,127
Cheque books 348,640 365,252
Copier parts and consumables 357,686 55
Drugs and medicines 93,704 325,285
Inventory in Transit 55 574,502
Less: Inventory impairment (980,969) (980,969)
8,404,147 6,546,392

All inventories held by the Bank as at 30 June 2019 were for the internal consumption to support
Bank’s operations and not intended for sale

121
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

26. DEFERRED CURRENCY COST

This account represents direct cost relating to notes printing and coins minting held by the Bank.
During financial year 2018/19, the movement on deferred currency cost account was as follows:

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000
Balance as at the beginning of the year 87,832,613 74,172,807
Add: Cost of currency received during the year 1,348,662 69,234,999
Less: Cost of currency issued in circulation (Note 12) (47,805,640) (55,575,193)
Balance as at the end of the year 41,375,635 87,832,613

27. OTHER ASSETS

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000
Prepayments 54,332,709 5,816,532
Reverse REPO 438,272,049 97,769,000
Financial Sector Development Fund 373,108 318,951
Staff imprest 522,748 1,839,806
Staff Housing Fund investment account 26,029,331 26,025,550
Petty cash balances 133,500 131,000
Sundry receivables 2,351,377 433,838
522,014,822 132,334,677

(i) Prepayment:
The balance under prepayment for the year ended 30 June 2019 mainly covers; TZS 50,937.5 million
paid as advance payment in respect of notes printing. As at 30 Jun 2019 the balance of prepayment
was TZS 54,332.7 million (2018: 5,816.5 million).

(ii) Reverse REPO:

The balance represents short term advance granted to commercial banks under reverse REPO
contracts. Under the agreements commercial banks sell securities to the Bank and simultaneously
agree to purchase the same securities at a specified future date at a fixed price. The difference
between sale and repurchase price is treated as interest income and is recognised in profit or loss.
As at 30 Jun 2019 the balance of reverse REPO contracts was TZS 438,272.0 million (2018: 97,769
million).

(iii) Staff housing fund:

The balance represents staff housing fund investments in government securities including treasury
bills and treasury bonds. The operation of the fund is as explained under Note 41 (e).

(iv) Financial Sector Development Fund

The balance represents the Financial Sector Development fund’s investments in government
securities. The operation of the fund is as explained under Note 41 (i).

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 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

28. RETIREMENT BENEFIT ASSETS (OBLIGATION)

30.06.2019 30.06.2018
TZS ‘000’ TZS ‘000’
Retirement benefit asset 8,227,657 -
Retirement benefit obligations - (18,985,000)

8,227,657 (18,985,000)

During the year the retirement benefit recorded surplus of TZS 8,227.7 million, details shown on staff
benefits scheme under note 46.

123
 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

29. PROPERTY AND EQUIPMENT

Machinery Computers, Capital

and Motor Fixtures and servers and work in
Year ended 30 June 2019 Buildings equipment vehicles fittings printers progress Total
TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Cost/valuation

At 01 July 2018 904,471,864 257,952,778 25,231,163 10,248,012 26,535,191 37,980,635 1,262,419,643

Additions 4,206,217 2,933,239 - 190,419 59,557 11,842,292 19,231,724
Disposal - (106,433) (2,868) (14,939) (29,603) - (153,843)
Transfers 253,523 6,220,143 - - - (6,473,666) -

At 30 June 2019 908,931,604 266,999,727 25,228,295 10,423,492 26,565,145 43,349,261 1,281,497,524

124
Accumulated depreciation

At 01 July 2018 14,226,526 216,505,366 13,415,078 7,409,674 19,865,134 15,000 271,436,778

Charges for the year 7,052,563 11,660,501 1,970,324 629,488 2,326,618 - 23,639,494
Transfer/Reclassifications 589,857 (589,857) - 124,132 - 124,132
Reversal of impairment loss 533,204 (600,468) (67,264)
Bank of Tanzania Annual Report 2018/19

Impairment 182,491 (36) 25,441 207,896

Disposal - (96,405) (2,868) (26,795) (12,372) - (138,440)

At 30 June 2019 22,402,150 227,061,628 15,382,534 8,012,331 22,328,953 15,000 295,202,596

Net book value

At 30 June 2019 886,529,454 39,938,099 9,845,761 2,411,161 4,236,192 43,334,261 986,294,928

In addition to the active assets valued at TZS 986,294.9 million, the Agency continues to utilize fully depreciated assets with a gross carrying
value of 269,402.4 million.
 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

29. PROPERTY AND EQUIPMENT (CONTINUED)

Machinery Computers,
and Motor Fixtures servers and Capital work
Year ended 30 June 2018 Buildings equipment vehicles and fittings printers in progress Total
TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Cost/valuation

At 01 July 2017 895,288,512 243,710,478 24,805,209 9,766,433 25,027,774 28,521,200 1,227,119,606

Additions 13,745,558 7,721,546 560,856 544,213 1,702,914 11,552,117 35,827,204
Disposal - (134,134) (134,902) (62,634) (195,497) - (527,167)
Transfers (4,562,206) 6,654,888 - - - (2,092,681) -

At 30 June 2018 904,471,864 257,952,778 25,231,163 10,248,012 26,535,191 37,980,635 1,262,419,643

125
Accumulated depreciation

At 01 July 2017 7,310,296 207,182,379 11,571,431 6,906,562 17,639,498 15,000 250,625,166

Charges for the year 7,477,761 8,885,384 1,954,256 553,815 2,404,202 - 21,275,418
Transfer/Reclassifications (561,531) 561,531 - - - - -
Bank of Tanzania Annual Report 2018/19

Disposal - (123,928) (110,609) (50,703) (178,567) - (463,807)

At 30 June 2018 14,226,526 216,505,366 13,415,078 7,409,674 19,865,133 15,000 271,436,777

Net book value

At 30 June 2018 890,245,338 41,447,412 11,816,085 2,838,338 6,670,058 37,965,635 990,982,866

 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

29. PROPERTY AND EQUIPMENT (CONTINUED)

Property and equipment (movable) are stated at cost less subsequent accumulated depreciation and impairment losses if any. Bank’s immovable
properties (buildings) are stated in the financial statements at revalued amounts less accumulated depreciation and impairment losses if any. If
were measured using the cost model, the carrying amounts of buildings would be as follows.

Details 30.06.2019 30.06.2018

TZS ‘000 TZS ‘000
Cost 638,251,883 633,792,143
Accumulated depreciation and impairments (96,646,857) (89,979,324)
Carrying amount 541,605,026 543,812,819

Effective financial year 2007/8 valuation of the Bank’s immovable property is conducted after five years. The Bank’s immovable properties were
revalued during the year ended 30 June 2016 by M/S M & R Agency Limited, a professional registered valuation firm.

126
Work-in-progress relates to capital expenditure incurred in the extension of the Dodoma office building, Mbeya Branch, New Office building
Mwanza Branch and Executive Hostel Training Institute. No depreciation is charged on capital work in progress until it is substantially completed.

Reconciliation of items disposed during the period by class of assets.

Gain or (loss) on disposal of property and
30.06.2019 30.06.2018
equipment
Bank of Tanzania Annual Report 2018/19

Accumulated Cost of Cash Net Net

Cost depreciation disposal proceeds gains/(loss) gains/(loss)
TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000
Class of asset

Machinery & equipment 106,433 96,405 100 1,990 (8,138) (8,684)

Motor vehicles 2,868 2,868 - - 15,525
Fixtures & fittings 14,939 26,795 160 3,190 14,886 (9,398)
Computers, servers & printers 29,603 12,372 87 1,730 (15,588) (14,163)

153,843 138,440 347 6,910 (8,840) (16,720)

 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

30. INTANGIBLE ASSETS

Computer Computer
software software - WIP Total
2019 TZS ‘000 TZS ‘000 TZS ‘000

Cost

At 1 July 2018 31,984,669 1,157,693 33,142,362

Additions 138,354 - 138,354
Transfer in/(out) 216,351 (216,351) -

At 30 June 2019 32,339,374 941,342 33,280,716

Accumulated amortisation

At 1 July 2018 27,986,663 22,691 28,009,354

Charge for the year 1,541,829 - 1,541,829
Transfers (124,132) (124,132)

At 30 June 2019 29,404,360 22,691 29,427,052

Net book value

At 30 June 2019 2,935,014 918,651 3,853,665

2018
Cost

At 1 July 2017 28,781,780 3,042,314 31,824,094

Additions 1,101,917 216,351 1,318,268
Transfer in/(out) 2,100,972 (2,100,972) -

At 30 June 2018 31,984,669 1,157,693 33,142,362

Accumulated amortisation

At 1 July 2017 25,899,199 22,691 25,921,890

Charge for the year 2,087,464 - 2,087,464

At 30 June 2018 27,986,663 22,691 28,009,354

Net book value

At 30 June 2018 3,998,006 1,135,002 5,133,008

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 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

31. CURRENCY IN CIRCULATION

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000
Notes
Notes issued 7,167,655,667 9,758,014,599
Less: Notes in Custody (2,322,461,861) (5,220,603,414)
Notes in Circulation 4,845,193,806 4,537,411,185

Coins
Coins issued 155,016,322 155,388,472
Less: Coins in Custody (35,007,569) (45,836,760)
Coins in Circulation 120,008,753 109,551,712

Total currency in circulation 4,965,202,559 4,646,962,897

Currency in circulation represents the face value of notes and coins in circulation. Notes and coins
held by the Bank as cash in main vault, intermediary vault and cashier/teller at the end of financial
year have been deducted from notes and coins issued to reflect actual liability for notes and coins in
circulation.

The notes and coins in circulation figure of TZS 4,965,202.6 million (2018: TZS 4,646,962.9 million)
includes banknotes that were phased out in 2003 with the face value of TZS 99,386.9 million (2018:
TZS 99,386.9 million) still in circulation.

32. DEPOSITS – BANKS AND NON-BANK FINANCIAL INSTITUTIONS

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

Deposits - commercial bank deposits

Domestic banks local currency deposits 2,976,548,579 2,428,924,395

Domestic banks Foreign Currency Deposits 432,187,017 704,265,547
Sub total 3,408,735,596 3,133,189,942

Deposits – Non-bank financial institutions

Clearing 48,399,290 54,940,728

SMR - -
Domestic Non-banks Foreign Currency Deposits 1 207,770
Sub total 48,399,291 55,148,498

Total deposits 3,457,134,887 3,188,338,440

Domestic deposits include, general purpose deposits, clearing balances and statutory minimum
reserve (SMR). SMR deposits are based on a ratio determined by the Bank to the total deposits of
the banks and non-bank financial institution for monetary policy purposes. Banks and non-bank
financial institutions are required to hold at the Bank of Tanzania a prescribed percentage of their
total deposits as prescribed in circular No.1 issued on 30 April 2015 in accordance with Section 44 of
the Bank of Tanzania Act, 2006 and Sections 4 and 71 of the Banking and Financial Institutions Act,
2006.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

33. DEPOSITS – GOVERNMENTS

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000
Voted accounts
URT Government (4,148,880,225) (1,943,822,268)
SMZ Government 21,177 3,257,394

Sub Total (4,148,859,048) (1,940,564,874)

Un-voted accounts

URT Government 2,907,217,462 2,507,240,493

SMZ Government 3,194,201 33,566,382
Sub total 2,910,411,663 2,540,806,875

Total deposits 2,910,432,840 2,544,064,269

Total URT Government (1,241,662,763) 563,418,225

Total SMZ Government 3,215,378 36,823,776

Net (Advance) / Deposit Governments (1,238,447,385) 600,242,001

As at 30 June 2019 the position of the Government of the United Republic of Tanzania (URT) accounts
were overdrawn by TZS 1,238,447.4 million (2018: TZS 1,943,822.3 million). Pursuant to the provision
of Section 34 of the Bank’s Act, a total of TZS 7,123.5 million (2018: TZS 39,651.9million) was charged
during the year ended 30 June 2019 as interest on overdrawn Governments position in various
periods at the interest rate equal to the average monthly rates charged on treasury bills. Government
deposit balances are non-interest earning. The current advance to government of TZS 1,238,447.4
million includes voted and un-voted accounts.

34. DEPOSITS – OTHERS

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

Deposits-Parastatals United Republic of Tanzania 1,458,004,178 1,811,816,953

Export Credit Guarantee Fund 192,442 1,191,803
Staff Benefit Deposit 3,773,594 1,970,619
Government obligations settlements 105,147,651 121,051,318
Deposit staff 19,282,283 19,666,507
Small and Medium Enterprises Guarantee Fund 271,173 403,159
Deposit Insurance Fund 4,219,043 6,105,447
Miscellaneous deposits* 548,077,990 147,618,304
Mwalimu Julius K Nyerere Memorial Scholarship Fund 62,104 140,406
External Payment Arrears - NBC 2,288,419 2,288,419
Debt Conversion Scheme 2,098,960 2,098,960
Debt Service cash cover 2,286,170 16,695,422
Economic Empowerment Programme 2,019,005 2,019,005
Bank drafts issued 481,286 807,413
Redemption of Government Stock/Bonds 30,750 38,610

2,148,235,048 2,133,912,345

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

34. DEPOSITS – OTHERS (CONTINUED)

* Included in miscellaneous is TZS 128,316.7 million (2018: TZS 132,864.0 million) in respect of
Federal Bank of Middle East (FBME) funds transferred from FBME clearing accounts to cater for bank
liquidation process.

Development Finance Guarantee Fund: 30.06.2019 30.06.2018

TZS ‘000 TZS ‘000
Development finance guarantee fund consists of the following:
Capital contribution by the Government 56,500,000 56,500,000
Less: Transfer of loans proceeds to ECGF, SME-CGS (3,842,148) (3,693,588)
Net capital contribution 52,657,852 52,806,413
Interest on refinancing and structured loans 32,753,300 32,753,300

Sub Total 85,411,151 85,559,712

Less: Loans issued for refinancing facility (85,411,151) (85,559,712)

Net balance - -

The Fund was established by the Government of the United Republic of Tanzania with the purpose
of financing development projects that manufacture products for export purposes. The Government
supports development efforts by business with potential to export their products by providing required
guarantee to finance the infrastructure in those businesses.

As at 30 June 2019, Government Capital contribution made in financial years 2002/03 and 2003/04
to the Fund amounted to TZS 56,500.0 million. Interest received and accrued on refinancing and
restructured loans aggregated to TZS 32,753.3 million (2018: TZS 32,753.3 million). The total
accumulated fund as at 30 June 2019 amounted to TZS 85,411.2 million (2017: TZS 85,559.7 million)
which represented the total loans issued for refinancing facilities to flowers and vegetable export
companies on the same.

Government Obligations Settlement:

This represents Government cash cover in order to settle outstanding foreign currency obligations.
The balance as at 30 June 2018 amounted to TZS 121,051.3 million (2017: TZS 44,233.2 million).

Export Credit Guarantee Fund:

The balance under this fund consists of the following: 30.06.2019 30.06.2018
TZS ‘000 TZS ‘000
Export Credit Guarantee Fund 6,646,117 5,646,756
Less: ECGS receivable/ impairment (6,838,559) (6,838,559)
(192,442) (1,191,803)

The Export Credit Guarantee Fund (the “Fund”) was established by the Government of the United
Republic of Tanzania in 2001 under the export credit guarantee scheme, in a bid to promote exports.
The Fund provides guarantees to commercial banks to cover risk of default for the loans issued. As
at 30 June 2019, the Fund had a net balance of TZS 192.4 million (2018: TZS 1,191.8 million). It is a
net of Government and the Bank’s contributions, accumulated income from investment in treasury
bills and guarantee fees and impairments.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

34. DEPOSITS – OTHERS (CONTINUED)

Debt Service Cash Cover:
The amount represents URT Government funds deposited with the Bank equivalent to the foreign
URT Government obligations and other services awaiting externalisation. As at 30 June 2019 the
balance stood at TZS 2,286.2 million (2018: TZS 16,695.4 million)

Debt Conversion Scheme:

These are balances of debt conversion funds that are blocked in the account pending submission of
progress reports by beneficiaries in respect of utilisation of previous disbursements, so as to justify
further disbursements. The balance has remained at the same level for the two years since no report
has been received to facilitate disbursements.

Mwalimu Julius K Nyerere Memorial Scholarship Fund:

Included in Deposit Others is the Mwalimu Julius K. Nyerere Memorial Scholarship Fund. The Fund
was established by the Bank of Tanzania on 12 October 2009 in honour of the life of the Father
of the Nation, Mwalimu Julius Kambarage Nyerere. The objective of the Fund is to sponsor best
performing students pursuing mathematics, science, accounting, finance and information technology
degrees at the University level in Tanzania. As at 30 June 2019, a total of TZS 4,201.6 million (2018:
TZS 3,469.9 million) in respect of the Fund’s resources had been invested in Government treasury
bills and treasury bonds. As a result, the Fund had a net balance of TZS 62.1 million (2018: TZS 140.4
million).

35. FOREIGN CURRENCY FINANCIAL LIABILITIES

Foreign Currency Financial Liabilities consist of the following: 30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

Special Projects 841,851,324 1,121,846,372

Other Foreign Currency Deposits 46,004,323 28,070,951
Multilateral Debt Relief Initiative Fund 18,219,112 18,037,154
Non-Paris Club Liabilities Escrow 11,196,862 11,044,388
Central Banks Deposits 1,962,050 1,000,773
Multilateral Agencies 23,281 140,674

919,256,952 1,180,140,312

Special Projects Funds:

These are United Republic of Tanzania Government funds received from donors for financing various
Government projects. The projects are managed and monitored by the Ministry of Finance and
Planning or other appointed project implementation agency. As at 30 June 2019, the total balance
in respect of Special Project accounts aggregated to TZS 841,851.3million (2018: TZS 1,121,846.4
million).

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

35. FOREIGN CURRENCY FINANCIAL LIABILITIES (CONTINUED)

Other Foreign Currency Deposits:
This mainly consists of balance in respect of Vnesheconombank Moscow Russia TZS 25,053.82
million (2018: TZS 21,703.2 million) Spread Reduction Account TZS 16,733.9 million (2018: TZS
3,596.8 million). As at 30 June 2019, the balance was TZS 46,004.3 million (2018: TZS 28,071.0
million).

Non Paris Club Liabilities Escrow:

This account represents funds deposited by the United Republic of Tanzania Government under
memorandum of economic and financial policies arrangement pending agreement with the relevant
group of non-Paris creditors. As at 30 June 2019, the account had a balance of TZS 11,196.8 million
(2018: TZS 11,044.4 million).

Multilateral Debt Relief Initiative Funds:

Multilateral debt initiative funds relate to debt relief relating to cancellation of Government of the
United Republic of Tanzania indebtedness to the IMF under the IMF-Multilateral Debt Relief Initiative
(MDRI). As at 30 June 2019, the fund had a balance amounting to TZS 18,218.2 million (2018: TZS
18,037.2 million).

Central Banks Deposits:

These are funds deposited by the Bank of Uganda, Central Bank of Kenya and Reserve Bank of
Rwanda to accommodate clearing of transactions in their respective currencies i.e. UGX, KSHS and
RWF. As at 30 June 2019, the accounts had a balance of TZS 1,962.1 million (2018: TZS 1,000.8
million)

Multilateral Agencies:
These consists mainly of funds disbursed by the International Development Agency (IDA) to finance
various economic operations. As at 30 June 2019, such balances amounted to TZS 23.3 million
(2018: TZS 140.7 million).

36. POVERTY REDUCTION AND GROWTH FACILITY (PRGF)

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

IMF Drawings 130,856,840 323,441,203

This relates to funds disbursed by International Monetary Fund (IMF) to the Bank on behalf of the
Government to support balance of payments. Repayment of these funds to IMF is effected in line
with IMF repayment schedule. The funds attract charges, which are paid on quarterly basis and borne
by the Bank.
The Government of United Republic of Tanzania (URT) has entered into an Exogenous Shocks Facility
- (ESF) arrangement with the IMF for SDR 218.79 million (USD 318.17 million) on 29 May 2009.
Following approval, the Bank had on 12 June 2009 received a total of SDR 159.1 million (USD 245.
8 million) equivalent to TZS 318,195.1 million being the first tranche. The Bank further received SDR
39.8 million (USD 63.4 million) equivalent to TZS 83,288.1 million and SDR 19.9 million (USD 29.0
million) equivalent to TZS 40,200.3 million on 10 December 2009 and 14 June 2010 respectively.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

36. POVERTY REDUCTION AND GROWTH FACILITY (PRGF) (CONTINUED)

The first tranche is repayable in ten years, including five and half year’s grace period, payable semi-
annually in ten equal instalments on 14 December and 14 June beginning 14 December 2014. The
loan carry an interest of 0.5 percent per annum payable semi-annually beginning on 14 December
2009. On 20 February 2013, the Government received a loan facility of SDR 74.6 million equivalent to
TZS 181,472.8 million

As at 30 June 2019, the balance of PRGF account was TZS 130,856.8 million (2018: TZS 323,441.2
million).

37. BOT LIQUIDITY PAPERS

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000
BOT liquidity papers 327,026,553 572,808,177
Accrued interest 3,727,279 7,890,459

330,753,832 580,698,636

As at 30 June 2019 the maturities profile of BOT Liquidity Papers held to maturity were as follows:

35-Day Treasury Bills 37,990,119 -

91-Day Treasury Bills 9,060,572 6,212,878
182-Day Treasury Bills 252,297,422 523,296,887
364-Day Treasury Bills 27,678,440 43,298,412
327,026,553 572,808,177

These are financial instruments issued by the Bank under the open market operations to manage
liquidity levels in the economy. Interest incurred on these instruments is accrued and recognised in
profit and loss account as interest expenses.

38. PROVISIONS
30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

Provision for leave pay 6,062,277 5,963,678

Relates to the estimated monetary liability for employees’ earned but not taken leave entitlement at
the end of the reporting period. The maximum allowance for number of leaves days accumulated
is 56 days. Only leave falling under this period are accumulated. The movements between the two
periods are recognised in the profit and loss accounts.

Movement in provisions 30.06.2019 30.06.2018

TZS ‘000 TZS ‘000
Leave pay
Carrying amount at the beginning of the year 5,963,678 5,999,009
Increase/(decrease) in provision 98,599 (35,331)

Carrying amount at the end of the year 6,062,277 5,963,678

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

39. OTHER LIABILITIES

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000
Accounts payable 70,010,333 50,436,978
Stale draft payables 108,330 108,330
Other employee cost payable 599,930 881,098
Sundry payables 2,271,459 2,302,439

72,990,052 53,728,845

40. AUTHORIZED AND PAID UP SHARE CAPITAL

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

Authorised and paid up share capital 100,000,000 100,000,000

The Authorised and paid up capital of the Bank is determined in accordance with Section 17(i) of the
Bank of Tanzania Act, 2006.

41. RESERVES
30.06.2019 30.06.2018
TZS ‘000 TZS ‘000
(a) General Reserve 457,166,248 444,907,153
(b) Capital Reserve 99,262,908 99,262,908
(c) Equalisation Reserve 413,567,609 360,888,713
(d) Reserve for Projects 210,000,000 210,000,000
(e) Staff Housing Fund 131,893,926 126,710,166
(f) Assets Revaluation Reserve 260,246,145 260,246,145
(g) Foreign Exchange Revaluation Reserve 3,077,265 212,970,682
(h) Securities Revaluation Reserve 61,777,173 2,383,761
(i) Financial Sector Development Fund 38,699,076 38,700,082
(j) Reserve for Dividends 250,000,000 350,000,000
(k) Defined Benefit Reserves (11,348,162) (20,929,310)

1,914,342,1888 2,085,140,300

(a) General Reserve

In accordance with Section 18(1) of the Bank of Tanzania Act, 2006, the Bank is required to maintain
a General Reserve Fund. The amount maintained in this account relates to annual appropriation of
distributable profits determined by virtue of Section 18(2) of the aforesaid Act. The Act requires the
Bank to transfer to the General Reserve Fund twenty five percent of the net profits until such time
that the total capital of the Bank reach a sum equivalent to at least ten per centum of the total assets
of the Bank less its assets in gold and foreign currencies. Thereafter, the Bank transfers not less than
ten percent of profits to the General Reserve Fund. As at 30 June 2019 the reserve had a balance of
TZS 457,166.2 million (2018: TZS 444,907.2 million).

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

41. RESERVES (Continued)

(b) Capital Reserve
The Capital Reserve was established on 30 June 2002. On an annual basis the amount spent to
finance capital projects from the Reserve for Projects account is transferred to this reserve. The
reserve is permanent in nature and can only be available for enhancement of share capital when
need arises. As at 30 June 2019, the reserve had the same balance as it was on 30 June 2018 of TZS
99,262.9 million.

(c) Equalisation Reserve

The reserve was established on 30 June 2006 as foreign exchange equalisation reserve and amended
on 30 June 2015 to include cushion for future losses on fair value movements on securities. The reserve
acts as a cushion against any significant future losses, which may arise from significant appreciation
of Tanzanian Shilling compared to other international currencies, and unfavourable movement in
market prices of financial instruments measured at fair value. The reserve is also available to absorb
unrealised losses that cannot be absorbed by the opening balances in that account.

The justification for the establishment of the aforesaid reserve as part of the equity of the Bank centres
on the requirement of the Bank, among other business entities requiring management to ensure
preservation of capital, in terms of mitigating risks that can cause capital impairment or impairment
of the entity’s assets. As at 30 June 2019, the reserve had a balance of TZS 413,567.6 million (2018:
TZS 360,888.7million).

(d) Reserve for Projects

This reserve was established by a resolution of the Bank’s Board of Directors on 30 June 1992. The
purpose of the reserve is to provide funds for financing major capital projects of the Bank. On an
annual basis, the Board determines the amount to be appropriated from the distributable profit to
the reserve. The Board considered the balance available in this account as at 30 June 2016 to be
adequate to meet current and future projects. As at 30 June 2019 the reserve had a balance of TZS
210,000.0 million (2018: TZS 210,000.0 million).

(e) Staff Housing Fund

The Staff Housing Fund was established by a resolution of the Board of Directors on 30 June 1990.
The purpose of this Fund is to finance housing loans to Bank’s employees. On an annual basis, the
Board determines the amount to be appropriated from the distributable profit to the reserve. As at
30 June 2019, the Fund had a balance of TZS 131,893.9 million (2018: TZS 126,710.2 million). The
increase during the year was on account of interest earned from Fund’s investments.

(f) Assets Revaluation Reserve

The Bank maintains Assets Revaluation Reserve to account for revaluation surpluses or deficits.
To ensure compliance with requirement of International Accounting Standard (IAS 16), Property,
Plant and Equipment if an asset-carrying amount increases as a result of revaluation, the increase is
credited directly to other comprehensive income. However, this amount is not available for distribution.
Accordingly, it is retained in the asset revaluation reserve. If an asset’s carrying amount decreases
on account of revaluation, the decrease is recognised in profit or loss to the extent that it exceeds
credit balance existing in the asset revaluation reserve in respect of that asset. As at 30 June 2019,
the reserve had a balance of TZS 260,246.1 million (2018: TZS 260,246.1 million).

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

41 RESERVES (Continued)
(g) Foreign Exchange Revaluation Reserve
In accordance with Section 18(4) of the Bank of Tanzania Act, 2006, unrealised gains or losses on
foreign exchange are transferred to this reserve account. In accounting for unrealised gains or losses
the Bank complies with the requirements of both IFRS and the Bank of Tanzania Act (2006). Pursuant
to the requirements of the International Accounting Standard (IAS – 21) the Effects of Changes in
Foreign Exchange Rates, all realised and unrealised foreign exchange valuations should be taken to
the profit or loss. As at 30 June 2019, the reserve had a total balance of TZS 3,077.3 million (2018:
TZS 212,970.7 million).

Both realised and unrealised foreign exchange gains or losses are taken to profit or loss for the
purposes of computation of profit or loss for the year. Until such gains or losses are realised, they
are not available for distribution; in the interim, the unrealised amounts are reflected in the Foreign
Exchange Revaluation Reserve. The separation of realised from unrealised exchange gains and
losses is done by use of an “inventory accounting for foreign exchange assets and liabilities”.

(h) Securities Revaluation Reserve

The Bank maintains Securities Revaluation Reserve to account for unrealised gains and losses arising
from changes in fair value of financial instruments measured at fair value. As at 30 June 2019, the
reserve had a total balance of TZS 61,777.2 million (2018: TZS 2,383.8 million).

(i) Financial Sector Development Fund.

This is a Fund established by the Board on 30 June 2016 pursuant to Section 18(1) (d) of the Bank of
Tanzania Act, 2006 to foster execution of the Bank’s mandate on financial sector development. The
fund complements donor funds directed towards financial sector reforms. As at 30 June 2019, the
fund had TZS 38,699.1 million (2018: TZS 38,700.1 million). The increase is on account of interest
income earned from the Fund’s investments.

(j) Reserve for Dividend

This reserve accommodates the amount declared as dividend payable to the Governments after end
of the accounting period. During the year ended 30 June 2019, the Bank declared dividend of TZS
250,000.0 million. As at 30 June 2019, the dividend reserve had a balance of TZS 250,000.0 million
(2018: TZS 350,000 million).

(k) Defined Benefit Reserve

This reserve was established in June 2013 in order to accommodate re-measurements arising from
change in actuarial assumptions to ensure compliance with International Accounting Standard (IAS
19 as revised in 2011)- Employee Benefits. During the year ended 30 June 2019 an actuarial gain of
TZS 9,581.0 million was recorded following revision of actuarial assumptions. As at 30 June 2019, the
reserve had a balance of TZS 11,348.2 million (2018: TZS 20,929.3 million).

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

42. CASH GENERATED FROM/USED IN OPERATING ACTIVITIES

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

Profit before tax 122,590,953 176,427,561

Adjustment for:
Depreciation and impairment of property and equipment 23,847,390 21,275,418
Amortisation of intangible assets 1,541,829 2,087,464
Net loss on disposal of property and equipment 8,840 16,720
Reversal for Impairment loss (490,833) -
Provision for retirement benefit 1,353,491 3,976,000
Employer’s contribution in retirement benefit (Note 45) (18,985,000) (16,046,813)

129,866,670 187,736,350
Changes in working capital
Increase in escrow assets (173,629) (188,207)
Increase in items in course of settlement 25,203,697 52,375,160
(Increase)/decrease in items in advances to Government 705,374,883 (397,268,785)
Increase in loans and receivables (7,428,486) (44,042,317)
Increase in inventories (1,857,755) (152,083)
Increase /(decrease) in deferred currency costs 46,456,978 (13,659,806)
Increase in other assets (389,680,145) (23,673,274)
Increase/(decrease) in deposits (2,260,945,119) 1,474,495,627
Increase/(decrease) in other liabilities and provisions 19,359,806 (38,480,306)

Net changes in working capital (1,863,689,770) 1,009,406,009

Cash generated from operations (1,733,823,100) 1,197,142,359

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT

43.1 Introduction
Risk management process in the Bank is based on the Corporate Risk Framework (CRM), policy and
guidelines that call for an integrated approach to ensure that all risks inherent in the operations are
effectively managed; so that the Bank can in turn attain its strategic goals and objectives.

While fulfilling its legal obligations, such as implementing monetary and exchange rate policies,
managing foreign exchange reserves and rendering banking services to the banking sector and the
Government of the United Republic of Tanzania, the Bank is exposed to a myriad of financial risks
namely market, credit and liquidity

Bank’s activities necessitate the use of financial instruments which include both assets and liabilities.
The instruments related to assets comprise of; foreign exchange deposits, foreign currency marketable
securities, holding of special drawing rights (SDR), equity investments and Government securities.
The Bank holds foreign exchange reserves for the purposes of servicing foreign debts and other
Government obligations as a fiscal agent of the Government of the United Republic of Tanzania, and
for servicing its own foreign exchange obligations. The Bank also holds foreign exchange reserves
for implementation of monetary and exchange rate policies and providing confidence to the financial
markets. In view of the Bank’s priorities of safety, liquidity and return, as stipulated by the Bank of
Tanzania Act, 2006, the Bank with a prudent approach, subjects its foreign exchange reserves to
investments in international markets.

The liabilities instruments include; currency in circulation, deposits from financial institutions,
Governments and its entities and IMF related liabilities. It also accepts or places short-term funds/
securities through open market operations in order to achieve the reserve target and influence the
short-term interest rates; the primary tool of monetary policy tools to establish price stability.

The financial risk management focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the financial performance of the Bank.

The Bank’s risks are measured to reflect both the expected loss likely to arise in normal circumstances
and unexpected losses, which are an estimate of the ultimate actual loss based on quantitative
factors. The quantitative factors use models which make use of probabilities derived from historical
experience, adjusted to reflect the economic environment. The Bank also runs worst-case scenarios
that would arise in the event that extreme events which are unlikely to occur do, in fact, occur.

The financial risk is analysed and reported on timely basis. This information is presented to the
investment management committee, management risk committee the Board on periodic basis.
As part of its financial risk management, the Bank uses various limits specified in the policy and
guidelines to manage exposures to various risks.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.2 Risk management structure
Risk management is integral to all aspects of the Bank’s activities and is generally the responsibility
of all employees. Heads of business units have a particular responsibility to evaluate their risk
environment, put in place appropriate controls and monitor the effectiveness of these controls. The
Bank identifies, assesses and manages risk at both Corporate (‘top-down’) and business (‘bottom-up’)
level. Controls put in place to manage the Bank’s risk environment are carefully assessed to ensure
they are well developed and implemented effectively. The role of each stakeholder is summarised
below:

(a) Board of Directors

The Board of Directors is responsible for:
• Overseeing corporate risk management in the Bank;
• Approving the Corporate Risk Management framework, policy, guide, benchmarks, tolerance
limits, risk appetite and key risk indicators; and
• Providing sufficient resources to support risk management function.

(b) Finance and Investment Committee of the Board

The Finance and Investment Committee of the Board is responsible for:
• Reviewing and recommending approval of the Corporate Risk Profile, associated mitigation
strategies and other reports on Risk Management;
• Assisting the Board in reviewing implementation reports of risk management initiatives in the
Bank;
• Advising the Board on all Risk Management undertakings in the Bank; and
• Issuing directives to Management on issues related to Risk management.

(c) Management
The Management is responsible for:
• Establishing, implementing and maintaining risk management system in accordance with the
Corporate Risk Management and Investment Management Policy;
• Formulating the framework, policy and recommending the risk limits and tolerance; and
• Reporting to the Finance and Investment Committee of the Board on implementation status of
the policy.

(d) Management risk committee (MRC)

The committee is responsible for:
• Guiding Management on issues related to risk management;
• Recommending approval of corporate risk profile to the Management;
• Reviewing risk mitigation plans and recommend for approval to Management; and
• Recommending periodic risk management reports to the Management.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.2 Risk management structure (Continued)
(e) Risk Management Function
Risk Management is responsible for:

Coordinating the implementation of CRM Policy and related framework;

Facilitating and coordinating periodic assessment of risks programmes;
Maintaining corporate risk register and Coordinating corporate risk profile reviews;
Promoting risk management culture to employees;
Providing Management with risk related reports;
Maintaining incident register and disseminate information to relevant risk owners;
Communicating changes to all stakeholders;
Administering and Custodian of the policy; and
Consolidating proposals of benchmarks, risk appetite, tolerance limits, and submit to MRC for review
and subsequently to the Board for approval.

(f) Internal audit function

The Internal Audit function is responsible for providing an independent evaluation of risk management,
implementation and reviewing corporate risk profile.

43.3 Financial risks

The Bank has adopted IFRS 9 Financial Instruments (“IFRS 9”) as issued by the International
Accounting Standards Board (“IASB”) in July 2014 effective for annual financial statements starting
on or after 1 January 2018, which resulted in changes in accounting policies and adjustments to the
amounts previously recognised in the financial statements.

The Bank had early adopted the first release of IFRS 9 that dealt with classification and measurement
in July 2012. Under this release, the business model classified financial assets under two categories
namely: Fair Value through Profit or Loss and Amortized cost. There was no change in classification
of financial liabilities except for the subsequent amendments relating to treatment of own credit risk.
The Bank reclassified its marketable securities as subsequently measured at fair value through profit
or loss. Other financial assets were classified as measured at amortized cost.

As permitted by the transitional provisions of IFRS 9, the Bank elected not to restate comparative
figures on adoption of the 2014 vision of the standard. Any adjustments to the carrying amounts
of financial assets and liabilities at the date of transition were recognised in the opening retained
earnings of the current period.

The consequential amendments to IFRS 7 – Financial Instruments: Disclosures have also only been
applied to the current period. The comparative period notes disclosures repeat those disclosures
made in the prior year.

The adoption of IFRS 9 has resulted in changes in the accounting policies for recognition, classification
and measurement of financial assets and financial liabilities, and impairment of financial assets.

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43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
Set out below are disclosures relating to the impact of the adoption of IFRS 9 on the Bank. Further
details of the specific IFRS 9 accounting policies applied in the current period (as well as the previous
IAS 39 accounting policies applied in the comparative period)

Financial Instruments
(a) Classification and measurement of financial instruments
The Bank performed a detailed analysis of its business models for managing financial assets and
analysis of their cash flow characteristics. As a result, the Bank implemented a change in classification
and measurement of foreign currency denominated securities. The Bank reclassified the unhedged
foreign currency denominated securities, equivalent to TZS 5,900.3 billion, from fair value through
profit or loss (FVTPL) to fair value through other comprehensive income and designation to FVTPL
of hedged portfolio of foreign currency denominated securities equivalent to TZS 611.8 billion.
In reclassification to FVOCI the Bank has opted for the use of fair value of assets at the date of
reclassification as the new cost for the purpose of recording gains or losses and amortisation. Please
refer to the Note above for detailed information regarding the new classification requirements of IFRS
9.

141
 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
The following explains how applying the new classification requirements of IFRS 9 led to changes in classification of certain financial instruments
as shown by the tables below:
IFRS 9 (2009 version) IFRS 9 (2014 version)
Measurement Measurement
category Carrying Amount category Carrying Amount
Financial Assets
Cash and balances with central banks & other banks Amortised cost 5,773,514,102 Amortised cost 5,773,453,865
Holdings of Special Drawing Rights (SDRs) Amortised cost 3,232,160 Amortised cost 3,232,160
Quota in International Monetary Fund (IMF) Amortised cost 1,268,292,685 Amortised cost 1,268,292,685
Foreign currency marketable securities(FVTPL) FVTPL 6,512,415,415 FVTPL 686,795,246
Foreign currency marketable securities(FVOCI) n/a FVOCI 5,825,620,169
Equity investments FVOCI 32,203,745 FVOCI 32,203,745

142
Government securities Amortised cost 1,361,728,291 Amortised cost 1,361,728,291
Advances to the Government Amortised cost 1,943,822,268 Amortised cost 1,943,822,268
Loans and receivables Amortised cost 418,119,142 Amortised cost 414,452,465
Other assets Amortised cost 132,334,677 Amortised cost 132,334,677
Financial Liabilities
Currency in circulation Amortised cost 4,646,962,897 Amortised cost 4,646,962,897
Bank of Tanzania Annual Report 2018/19

Deposits - banks and non-bank financial institutions Amortised cost 3,188,338,440 Amortised cost 3,188,338,440
Deposits - Governments Amortised cost 2,544,064,269 Amortised cost 2,544,064,269
Deposits - Others Amortised cost 2,133,912,345 Amortised cost 2,133,912,345
Foreign currency financial liabilities Amortised cost 1,180,140,312 Amortised cost 1,180,140,312
Poverty reduction and growth facility Amortised cost 323,441,203 Amortised cost 323,441,203
BoT liquidity papers Amortised cost 580,698,636 Amortised cost 580,698,636
Other liabilities Amortised cost 53,728,845 Amortised cost 53,728,845
IMF related liabilities Amortised cost 1,077,873,263 Amortised cost 1,077,873,263
Allocation of Special Drawing Rights (SDRs) Amortised cost 607,401,286 Amortised cost 607,401,286
 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
Reconciliation of statement of financial position balances from previous IFRS 9 vision to new IFRS 9.

The following table reconciles the carrying amounts of financial assets, from their previous measurement category their new measurement
categories upon transition to IFRS 9 on 1 July 2018.
Carrying Amount 30 Reclassifications Re-measurements Carrying Amount
June 2018 (allowance to ex- 1 July 2018
pected credit loss)
TZS 000 TZS 000 TZS 000 TZS 000
Amortised Cost
Cash and balances with central banks & other banks 5,773,514,102 - (60,237) 5,773,453,865
Holdings of Special Drawing Rights (SDRs) 3,232,160 - - 3,232,160
Quota in International Monetary Fund (IMF) 1,268,292,685 - - 1,268,292,685
Equity investments 32,203,745 - - 32,203,745

143
Government securities 1,361,728,291 - - 1,361,728,291
Advances to the Government 1,943,822,268 - - 1,943,822,268
Loans and receivables 418,119,142 - (3,666,677) 414,452,465
Other assets 132,334,677 - - 132,334,677

10,933,247,070 - (3,726,914) 10,929,520,156

Bank of Tanzania Annual Report 2018/19

Fair value through profit or loss

Foreign currency marketable securities(FVTPL) 6,512,415,415 (5,825,620,169) - 686,795,246

Fair value through other comprehensive income

Foreign currency marketable securities(FVOCI) - 5,825,620,169 - 5,825,620,169

17,445,662,485 - (3,726,914) 17,441,935,571

The total re-measurement loss of TZS 3.7 billion in respect of expected credit loss was recognised in opening retained earnings as at 1 July 2018.
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(C) Reconciliation of loss allowance balance from IAS 39 to IFRS 9
The following table reconciles the prior period’s closing impairment allowance measured in accordance
with the IAS 39 incurred loss model to the new impairment allowance measured in accordance with
the IFRS 9 expected loss model at 1 July 2018.

Loan loss
Loss allowance Additional allowance
under IAS 39 Impairment under IFRS 9
TZS 000 TZS 000 TZS 000
Cash and balances with central banks &
other banks - (60,237) (60,237)
Holdings of Special Drawing Rights (SDRs) - - -
Quota in International Monetary Fund (IMF) - - -
Foreign currency marketable securities
(FVTPL) - - -
Foreign currency marketable securities
(FVOCI) - - -
Equity investments - - -
Government securities - - -
Advances to the Government - - -
Loans and receivables (12,193,689) (3,666,677) (15,860,366)
Other assets - - -

(12,193,689) (3,726,914) (15,920,603)

A financial instrument is defined as any contract that gives rise to both a financial asset of one
entity and a financial liability or equity instrument of another entity. The Bank recognises all financial
instruments on its statement of financial position when it becomes a party to the contractual provision
of the instrument.

Initial recognition of financial assets and liabilities

Financial assets and financial liabilities are recognised when the entity becomes a party to the
contractual provisions of the instrument. Regular way purchases and sales of financial assets are
recognised on trade-date, the date on which the Bank commits to purchase or sell the asset.

At initial recognition, the Bank measures a financial asset or financial liability at its fair value plus
or minus, in the case of a financial asset or financial liability not at fair value through profit or loss,
transaction costs that are incremental and directly attributable to the acquisition or issue of the
financial asset or financial liability, such as fees and commissions. Transaction costs of financial
assets and financial liabilities carried at fair value through profit or loss are expensed in profit or loss.

144
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(ii) Classification and subsequent measurement of financial assets
From 1 June 2018, the Bank applied IFRS 9 and classifies its financial assets in the following measurement
categories:
at amortised cost;
at fair value through profit or loss (“FVTPL”); or
at fair value through other comprehensive income (“FVOCI”)
The classification requirements for debt and equity instruments are described below:
Debt instruments
Debt instruments are those instruments that meet the definition of a financial liability from the issuer’s
perspective, such as loans and government bonds. Classification and subsequent measurement of debt
instruments depend on:
the Bank’s business model for managing the asset; and
the cash flow characteristics of the asset.
(ii) Classification and subsequent measurement of financial assets (continued)

Business model
The business model reflects how the Bank manages its assets in order to generate cash flows. That is, whether
the Bank’s objective is solely to collect the contractual cash flows from the assets or is to collect both the
contractual cash flows and cash flows arising from the sale of assets. If neither of these is applicable (e.g.
financial assets are held for trading purposes), then the financial assets are classified as part of ‘other’ business
model and measured at FVTPL. Factors considered by the Bank in determining the business model for a group
of assets include past experience on how the cash flows for these assets were collected, how the asset’s
performance is evaluated and how risks are assessed and managed.

Solely Payments of Principal and Interest (“SPPI”) test

Where the business model is to hold assets to collect contractual cash flows or to collect contractual cash
flows and sell, the Bank assesses whether the financial instruments’ cash flows represent solely payments of
principal and interest (the SPPI test). In making this assessment, the Bank considers whether the contractual
cash flows are consistent with a basic lending arrangement i.e. interest includes only consideration for the time
value of money, credit risk, other basic lending risks and a profit margin that is consistent with a basic lending
arrangement. Where the contractual terms introduce exposure to risk or volatility that are inconsistent with a
basic lending arrangement, the related financial asset is classified and measured at FVTPL.
The Bank reclassifies debt instruments when and only when its business model for managing those assets
changes. The reclassification takes place from the start of the first reporting period following the change. Such
changes are expected to be very infrequent and none occurred during the period.

Based on these factors, the Bank classifies its debt instruments into one of the following measurement
categories

Amortised cost:
Assets that are held for collection of contractual cash flows where those cash flows represent SPPI, and that
are not designated at FVTPL, are measured at amortised cost. The carrying amount of these assets is

145
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
adjusted by any expected credit loss (“ECL”) allowance. Interest income from these financial assets is
included in interest income using the effective interest method.

The amortised cost is the amount at which the financial asset or financial liability is measured at initial
recognition minus the principal repayments, plus or minus the cumulative amortisation using the effective
interest method of any difference between that initial amount and the maturity amount and, for financial
assets, adjusted for any loss allowance.

(ii) Classification and subsequent measurement of financial assets (continued)

The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts
through the expected life of the financial asset or financial liability to the gross carrying amount of a
financial asset (i.e. its amortised cost before any impairment allowance) or to the amortised cost of a
financial liability. The calculation does not consider expected credit losses and includes transaction costs,
premiums or discounts and fees and points paid or received that are integral to the effective interest rate,
such as origination fees.

When the Bank revises the estimates of future cash flows, the carrying amount of the respective financial
assets or financial liability is adjusted to reflect the new estimate discounted using the original effective
interest rate. Any changes are recognised in profit or loss.

Fair value through other comprehensive income:

Financial assets that are held for collection or contractual cash flows and for selling the assets where
the assets’ cash flows represent solely payment of principal and interest, and that are not designated at
FVPL, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying
amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue
and foreign exchange gains and losses on the instrument’s amortised cost which are recognised in profit
or loss. The amount included in ‘interest income’ is obtained using the effective interest rate method.

Fair value through profit or loss:

Financial assets that do not meet the criteria for amortised cost or fair value through other comprehensive
income (“FVOCI”) are measured at FVTPL. A gain or loss on a debt instrument that is subsequently
measured at FVTPL is recognised in profit or loss and presented in profit or loss within gains arising from
fair valuation of financial assets at fair value through profit or loss in the period in which it arises.

Equity instruments
Equity instruments are instruments that meet the definition of equity from the issuer’s perspective; that
is, instruments that do not contain a contractual obligation to pay and that evidence a residual interest
in the issuer’s net assets. The Bank subsequently measures all equity instruments at FVOCI. Dividends,
when representing a return on such investments, continue to be recognised in profit or loss under ‘Other
income’ when the Bank’s right to receive payments is established. Gains or losses on equity investments
are included in Other Comprehensive Income.

146
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(a) Credit risk
In its financial operations, the Bank is exposed to credit risk, defined as the probability of a complete
or partial failure of a counterpart to fulfil its obligations arising from a financial transaction. Credit
risk basically originates from the open market operations carried out in order to provide short term
liquidity to banks within the framework of monetary policy implementation and from the investments
made during foreign exchange reserve management.

Credit risk faced by the Bank during the implementation of monetary policy is an inevitable risk, such
risks are managed by securing the entire transaction amount, also including a certain margin by
assets that have high credit quality and are tradable in the secondary markets.

The management of the credit risk that the Bank is exposed to in the foreign exchange reserve
management is based on the principal of minimizing default probabilities of the counter-parties and
the financial loss in case of default. The Bank confines its investment to leading international financial
institutions and debtors that meet the minimum rating criteria specified in the Investment Policy.
The Bank uses credit ratings assigned by the International Credit Rating Agencies. The specified
minimum rating criteria depends on whether the investment is short or long term in nature.

Accordingly, for short term investments, the Bank takes on exposure to issuers/issues having at least
F2, A-2 and P-2 according to Fitch Ratings, Standard and Poor’s (S&P) Financial Services LLC and
Moody’s respectively. The Bank can also invest in securities issued or directly guaranteed by foreign
governments and Supranational which have a long-term rating of at least ‘A’ according to the above
stated credit rating agencies. By settling this overall credit risk limit within the scope of Investment
Guidelines, the Bank aims to prevent credit risk from exceeding its risk tolerance.

The institutions eligible for transactions are chosen among those institutions meeting the minimum
credit rating limitation set in the guidelines. In all transactions executed with these institutions, credit
risk exposure amounts that are calculated on the basis of transactions type are immediately reflected
on their limits, and the use of these limits are regularly monitored and reported. Overall, the credit risk
assumed during financial year 2018/19 operations remained at quite low levels as a great portion of
reserves are invested in assets issued or directly guaranteed by the respective governments as well
as by supranational institutions such as the World Bank, the European Investment Bank and Bank for
International Settlements.

147
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(a) Credit risk (Continued)
Total assets of the Bank exposed to credit risk as of 30 June 2019 and 30 June 2018 are presented
in the table below according to the classification of assets (classification according to external credit
rating is done based on credit ratings published by Standard and Poor’s).

Description 30.06.2019 30.06.2018

TZS ‘000 Share (%) TZS ‘000 Share (%)

Central Banks
AAA to A 560,766,547 4% 785,691,252 4.5%
B+ to B 1,422,381.5 0.01% 2,904,951 0.02%

Foreign Commercial Banks

AAA to A 4,174,310,678 30% 4,970,868,572 28.48%
B+ to B 1,634,454 0.01% 697,766.5

Escrow accounts
A+ 11,218,286 0.08% 10,856,450 0.06%

Items in course of settlement: - - 0.00%

N

Loans, receivables & advances to the government

NR 1,660,968,106 12% 2,361,941,410 13.49%

Investment in securities

Marketable securities 5,065,705,728 36% 6,512,415,415 37.32%

AAA 1,167,382,355 5,342,134,364

AA+ 2,966,056,847 145,226,864
AA 673,006,575 659,707,682
AA- 28,417,868 86,615,125
A+ 230,527,130 278,731,380

Equity investments
NR 37,073,235 0.3% 32,203,745 0.18%
Government securities
NR 1,257,650,150 8% 1,361,728,291 7.80%
Other assets (excluding
prepayments)
NR 467,682,113 3% 126,518,145 0.73%
Holdings of Special Drawing
Rights (SDRs)
NR 67,392,346 0.5% 3,232,160 0.02%
Quota in International Monetary
Fund (IMF)
NR 1,266,185,402 9% 1,268,292,685 7.27%

14,572,009,427 100.00% 17,437,350,843 100.00%

148
 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(a) Credit risk (Continued)
The sectoral classification of the Bank’s credit exposure as at 30 June 2019 is as follows:

Foreign Domestic Foreign Government

Details Country Supranational Financial Financial Guaranteed Tanzania
Treasury Institutions Institutions Institutions Agencies Treasury Total
2019 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Central Banks, Foreign Commercial

Banks and Escrow accounts

Central Banks 561,519,866 1,422,382 - - - - 562,942,247

Commercial Banks 0 0 - 4,253,757,966 - - 4,253,757,967

149
Escrow accounts - - - 11,218,286 - - 11,218,286

Investment in securities

Foreign Currency Marketable securities 4,036,795,712 252,403,877 - 688,036,746 88,469,394 - 5,065,705,728

Equity investments - - - 37,073,235 - - 37,073,235
Government securities - - - - - 1,257,650,150 1,257,650,150
Bank of Tanzania Annual Report 2018/19

Others

Items in course of settlement - - - - - - -

- - 422,520,721 - - 1,238,447,385
Loans, receivables and advances
1,660,968,106
Other assets (excluding prepayments) - - - - - 467,682,113 467,682,113
Holdings of Special Drawing Rights (SDRs) - 67,392,346 - - - - 67,392,346
Quota in International Monetary Fund (IMF) - 1,266,185,402 - - - - 1,266,185,402

4,598,315,578 1,587,404,007 422,520,721 4,990,086,233 88,469,394 2,963,779,648 14,650,575,581

 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(a) Credit risk (Continued)
The sectoral classification of the Bank’s credit exposure as at 30 June 2018 is as follows:

Foreign Domestic Foreign Government

Details Country Supranational Financial Financial Guaranteed Tanzania
Treasury Institutions Institutions Institutions Agencies Treasury Total
2019 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Central Banks, Foreign Commercial

Banks and Escrow accounts

Central Banks 561,519,866 1,422,382 - - - - 562,942,247

Commercial Banks 0 0 - 4,253,757,966 - - 4,253,757,967
Escrow accounts - - - 11,218,286 - - 11,218,286

150
Investment in securities

Foreign Currency Marketable securities 4,036,795,712 252,403,877 - 688,036,746 88,469,394 - 5,065,705,728

Equity investments - - - 37,073,235 - - 37,073,235
Government securities - - - - - 1,257,650,150 1,257,650,150
Bank of Tanzania Annual Report 2018/19

Others

Items in course of settlement - - - - - - -

- - 422,520,721 - - 1,238,447,385
Loans, receivables and advances
1,660,968,106
Other assets (excluding prepayments) - - - - - 467,682,113 467,682,113
Holdings of Special Drawing Rights (SDRs) - 67,392,346 - - - - 67,392,346
Quota in International Monetary Fund (IMF) - 1,266,185,402 - - - - 1,266,185,402

4,598,315,578 1,587,404,007 422,520,721 4,990,086,233 88,469,394 2,963,779,648 14,650,575,581

 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(a) Credit risk (Continued)
Geographical analysis of concentrations of assets and liability of the Bank as at 30 June 2019 is as follows:
Foreign Domestic Foreign Government
Details Country Supranational Financial Financial Guaranteed Tanzania
Treasury Institutions Institutions Institutions Agencies Treasury Total
2018 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Central Banks, Foreign Commercial Banks

and Escrow accounts

Central Banks 2,351,046,194 1,567,060,170 - - - 4,817,704 3,922,924,068

Commercial Banks - - - 1,850,590,032 - 1 1,850,590,033
Escrow accounts - - - 11,044,657 - - 11,044,657

151
Investment in securities

Foreign Currency Marketable securities 5,986,936,433 210,480,930 - 89,704,319 225,293,733 - 6,512,415,415

Equity investments - - - 32,203,745 - - 32,203,745
Government securities - - - - - 1,361,728,291 1,361,728,291
Bank of Tanzania Annual Report 2018/19

Others

Items in course of settlement - - - - - - -

Loans, receivables and advances - - 418,119,142 - - 1,943,822,268 2,361,941,410
Other assets (excluding prepayments) - - - - - 126,518,145 126,518,145
Holdings of Special Drawing Rights (SDRs) - 3,232,160 - - - - 3,232,160
Quota in International Monetary Fund (IMF) - 1,268,292,685 - - - - 1,268,292,685

8,337,982,627 3,049,065,945 418,119,142 1,983,542,753 225,293,733 3,436,886,409 17,450,890,609

 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(a) Credit risk (Continued)
Geographical analysis of concentrations of assets and liability of the Bank as at 30 June 2018 is as follows:
Other
Details European Other
Tanzania USA UK Countries Countries Total
2019 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Assets
Cash and balances with central banks & other banks 70,376,711 1,148,271,851 387,067,480 2,643,776,782 567,207,390 4,816,700,214
Escrow accounts - - 11,218,286 - - 11,218,286
Items in course of settlement - - - - - -
Holdings of Special Drawing Rights (SDRs) - 67,392,346 - - - 67,392,346
Quota in International Monetary Fund (IMF) - 1,266,185,402 - - - 1,266,185,402
Foreign currency marketable securities - 3,599,022,038 645,317,555 100,621,902 720,744,233 5,065,705,728
Equity investment - - - 1,142,781 35,930,454 37,073,235

152
Government securities 1,257,650,150 - - - - 1,257,650,150
Advances to the Government 1,238,447,385 - - - - 1,238,447,385
Loans and receivables 422,520,721 - - - - 422,520,721
Other assets (excluding prepayments) 467,682,113 - - - - 467,682,113

Total assets 3,456,677,080 6,080,871,637 1,043,603,321 2,745,541,465 1,323,882,077 14,650,575,580

Liabilities
Bank of Tanzania Annual Report 2018/19

Currency in circulation 4,965,202,559 - - - - 4,965,202,559

Deposits - banks and non-banks financial institutions 3,457,134,887 - - - - 3,457,134,887
Deposits - Government - - - - - -
Deposits - others 2,148,235,048 - - - - 2,148,235,048
Foreign currency financial liabilities 919,256,948 - - - - 919,256,948
Poverty deduction and growth facility - 130,856,840 - - - 130,856,840
BoT liquidity papers 330,753,832 - - - - 330,753,832
Other liabilities 72,990,052 - - - - 72,990,052
IMF related liabilities 1,076,082,365 - - - - 1,076,082,365
Allocation of Special Drawing Rights (SDRs) - 606,392,081 - - - 606,392,081

Total liabilities 12,969,655,691 737,248,921 -- - - 13,706,904,612

 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(a) Credit risk (Continued)
Geographical analysis of concentrations of assets and liability of the Bank as at 30 June 2018 is as follows:
Other
Details European Other
Tanzania USA UK Countries Countries Total
2018 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000
Assets
Cash and balances with central banks & other banks 5,318,080 1,006,405,216 430,951,617 2,200,818,430 2,130,020,759 5,773,514,102
Escrow accounts - - 11,044,657 - - 11,044,657
Items in course of settlement - - - - - -
Holdings of Special Drawing Rights (SDRs) - 3,232,160 - - - 3,232,160
Quota in International Monetary Fund (IMF) - 1,268,292,685 - - - 1,268,292,685
Foreign currency marketable securities - 4,306,739,369 386,637,795 876,020,250 943,018,001 6,512,415,415
Equity investment - - - 1,157,813 31,045,932 32,203,745

153
Government securities 1,361,728,291 - - - - 1,361,728,291
Advances to the Government 1,943,822,268 - - - - 1,943,822,268
Loans and receivables 418,119,142 - - - - 418,119,142
Other assets (excluding prepayments) 126,518,145 - - - - 126,518,145
Total assets 3,855,505,926 6,584,669,430 828,634,069 3,077,996,493 3,104,084,692 17,450,890,610

Liabilities

Currency in circulation 4,646,962,897 - - - - 4,646,962,897

Bank of Tanzania Annual Report 2018/19

Deposits - banks and non-banks financial institutions 3,188,338,440 - - - - 3,188,338,440

Deposits - Government 2,544,064,269 - - - - 2,544,064,269
Deposits - others 2,133,912,345 - - - - 2,133,912,345
Foreign currency financial liabilities 1,180,140,312 - - - - 1,180,140,312
Poverty deduction and growth facility - 323,441,203 - - - 323,441,203
BoT liquidity papers 580,698,636 - - - - 580,698,636
Other liabilities 53,728,845 - - - - 53,728,845
IMF related liabilities 1,077,873,263 - - - - 1,077,873,263
Allocation of Special Drawing Rights (SDRs) - 607,401,286 - - - 607,401,286

Total liabilities 15,405,719,007 930,842,489 -- - - 16,336,561,496

 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

3. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(a) Credit risk (Continued)
Credit quality per class of financial assets
The credit quality per class of financial assets is managed by the Bank using internal ratings system.
The table below shows the quality by class of asset for all financial assets exposed to credit risk,
based on the Bank’s credit rating system. The amount presented is gross of impairment allowances.

Neither past due Past due but Individually

Details
nor impaired not impaired impaired Total
TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000
30.06.2019

Cash and cash equivalents 4,816,700,214 - 276,784 4,816,976,998

Escrow accounts 11,218,286 - - 11,218,286
Items in course of settlement - - - -
Foreign currency marketable securities 5,065,705,728 - - 5,065,705,728
Equity investments 37,073,235 - - 37,073,235
Government securities 1,257,650,150 - - 1,257,650,150
Loans, receivables and advances 1,648,580,688 12,387,418 15,220,596 1,676,188,702
Other assets (excluding prepayments) 467,682,113 - - 467,682,113
Holdings of Special Drawing Rights
(SDRs) 67,392,346 - - 67,392,346
Quota in International Monetary Fund 1,266,185,402 - - 1,266,185,402

14,638,188,162 12,387,418 15,497,380 14,666,072,960

30.06.2018

Cash and cash equivalents 5,773,514,102 - - 5,773,514,102

Escrow accounts 11,044,657 - - 11,044,657
Items in course of settlement - - - -
Foreign currency marketable securities 6,512,415,415 - - 6,512,415,415
Equity investments 32,203,745 - - 32,203,745
Government securities 1,361,728,291 - - 1,361,728,291
Loans, receivables and advances 2,348,219,475 1,528,246 12,193,689 2,361,941,410
Other assets (excluding prepayments) 126,518,145 - - 126,518,145
Holdings of Special Drawing Rights
(SDRs) 3,232,160 - - 3,232,160
Quota in International Monetary Fund 1,268,292,685 - - 1,268,292,685

17,437,168,675 1,528,246 12,193,689 17,450,890,610

Details on provision for impairment losses on loans and receivables have been provided under Note
24. The Bank does not hold collateral for financial liabilities pledged as security.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

3. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(a) Credit risk (Continued)
Credit quality per class of financial assets (Continued)
Individually assessed allowances:
The Bank determines the allowances appropriate for each individually significant loan or advance on
an individual basis. Items considered when determining allowance amounts include the sustainability
of the counterparty’s business plan, its ability to improve performance once a financial difficult has
arisen, projected receipts and the expected pay-out should bankruptcy ensure, the availability of
other Financial support, the realisable value of collateral and timing of the expected cash flows.
Impairment allowances are evaluated at each reporting date, unless unforeseen circumstances
require more careful attention.
30.06.2019 30.06.2018
Gross Maximum Gross Maximum
Exposure Exposure
TZS ‘000 TZS ‘000

Cash and cash equivalents 4,816,700,214 5,773,514,102

Escrow accounts 11,218,286 11,044,657
Items in the course of settlements - -
Foreign currency marketable securities 5,065,705,728 6,512,415,415
Equity investments 37,073,235 32,203,745
Government securities 1,257,650,150 1,361,728,291
Loans, receivables and advances 1,660,968,106 2,361,941,410
Other assets (Excluding prepayments) 467,682,113 126,518,145
Holdings of Special Drawing Rights (SDRs) 67,392,346 3,232,160
Quota in International Monetary Fund 1,266,185,402 1,268,292,685

The Bank’s maximum exposure to credit risk for each class of recognised financial assets, other than
derivatives, is the carrying amount of those assets as indicated in the balance sheet. The maximum
exposure to credit risk for derivatives at the reporting date is detailed below. Futures are settled and
recorded on net terms while swaps are settled on gross terms but recorded on net basis. The net
values of derivatives are as follows:

Asset
TZS ‘000
2019
Futures 595,475
Swaps 214,692
2018
Futures 332,589
Swaps 12,253,650

Impairment
Immediately after initial recognition, an ECL allowance is recognised for financial assets measured
at amortised cost and investments in debt instruments measured at FVOCI, which results in an
accounting loss being recognised in profit or loss when an asset is newly originated.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(a) Credit risk (Continued)
Credit quality per class of financial assets (Continued)
As from 1 July 2018, the Bank assesses on a forward-looking basis the ECL associated with its
debt instrument assets carried at amortised cost, FVOCI and with the exposure arising from loan
commitments. The Bank recognises a loss allowance for such losses at the end of each reporting
period. The measurement of ECL reflects:
• an unbiased and probability-weighted amount that is determined by evaluating a range of
possible outcomes;
• the time value of money; and
• Reasonable and supportable information that is available without undue cost or effort at the
reporting date about past events, current conditions and forecasts of future economic conditions.

Measurement of the ECL allowance

A number of significant judgements are also required in applying the accounting requirements for
measuring ECL, such as:
• Determining criteria for significant increase in credit risk;
• Choosing appropriate models and assumptions for the measurement of ECL;
• Establishing the number and relative weightings of forward-looking scenarios for each type of
product and the associated ECL; and
• Establishing groups of similar financial assets for the purposes of measuring ECL.

(i) Credit risk measurement

The estimation of credit exposure for risk management purposes requires the use of models, as the
exposure varies with changes in market conditions, expected cash flows and the passage of time.
The assessment of credit risk of a portfolio of assets entails further estimations as to the likelihood of
defaults occurring, of the associated loss ratios and of default correlations between counterparties.
The Bank measures credit risk using Probability of Default (“PD”), Exposure at Default (“EAD”) and
Loss Given Default (“LGD”).

Government securities and Advances to the Government

The Banks has classified Government securities and advances to the Government of the United
Republic of Tanzania as low credit risk financial assets. These assets carry Sovereign risk and
therefore has a zero or close to zero 12-month PD, in which case expected credit losses is negligible.

Financial assets with credit rating

The Bank uses external credit risk ratings that reflect its assessment of the probability of default for
Cash and balances with central banks and other banks, Holdings of Special Drawing Rights (SDRs),
Quota in International Monetary Fund (IMF) and Foreign currency marketable securities.

The Bank determines whether there is a significant increase in credit risk (SICR) by comparing the
movement in credit rating at origination date and credit rating at the reporting date. Notch movements
give an indicator of the number of downgrades required in order for the asset to be considered to
have a significant increase in credit risk. Therefore, highly rated assets for example those in the AAA
category would need to move down six notches to A- (or below) for it to be

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(a) Credit risk (Continued)
considered a significant increase in credit risk whereas an asset rated B- would only need to move
down one notch.

Financial assets without credit rating

The Bank uses a different approach for staff loans to determine whether there is significant increase
in credit risk. The Bank only determine SICR for employees who are no longer employee of the Bank
and whose instalments are more than 30 days past due.

The default event is determined for the Bank ex-employees with instalment overdue for more than 90
days.

Expected credit loss measurement

IFRS 9 outlines a ‘three-stage’ model for impairment based on changes in credit quality since initial
recognition as summarised below:
• A financial instrument that is not credit-impaired on initial recognition is classified in ‘Stage 1’
and has its credit risk continuously monitored by the Bank.
• If a significant increase in credit risk (“SICR”) since initial recognition is identified, the financial
instrument is moved to ‘Stage 2’ but is not yet deemed to be credit impaired.
• If the financial instrument is credit-impaired, the financial instrument is then moved to ‘Stage 3’.

(a) Financial instruments in Stage 1 have their ECL measured at an amount equal to the portion
of lifetime expected credit losses that result from default events possible within the next 12
months. Instruments in Stages 2 or 3 have their ECL measured based on expected credit losses
on a lifetime basis.
• A pervasive concept in measuring ECL in accordance with IFRS 9 is that it should consider
forward looking information.

The key judgements and assumptions adopted by the Bank in addressing the requirements of the
standard are discussed below:

Significant increase in credit risk (SICR)

The Bank considers a financial instrument to have experienced a significant increase in credit risk
when one or more of the following quantitative, qualitative or backstop criteria have been met:

Quantitative criteria
The remaining lifetime PD at the reporting date has increased, compared to the residual lifetime PD
expected at the reporting date when the exposure was first recognised.

Balances with other banks and financial institutions, including other central banks: This is determined
by a change/downgrade in external rating and depending on the original rating more than one may be
needed to trigger a SICR transfer. Due to the short-term characteristics of this assets ratings changes
required to trigger SICR and be applied in risk assessment have to happen in a very short-timeframe.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(a) Credit risk (Continued)
Investment Securities will follow a similar approach to other counterparty exposures above. This is a
longer-term exposure and the effect to moving to a lifetime ECL would be significant.

The assessment of SICR incorporates forward-looking information in so far as the external ratings are
constructed to reflect macro-economic outlook and impact.

Backstop
A backstop is applied, and the financial instrument considered to have experienced a significant
increase in credit risk if the borrower is more than 30 days past due on its contractual payments.

The Bank has used the low credit risk exemption for Government securities and advances to the
Government of United Republic of Tanzania.

Definition of default and credit-impaired assets

The Bank defines a financial instrument as in default, which is fully aligned with the definition of
credit-impaired, when it meets one or more of the following criteria:

Quantitative criteria
The borrower has failed to meet contractual obligations on repayment being either 90 days in arrears
or in the case of staff lending has left the Bank and failed to meet contractual requirement on settling
outstanding loan.

Qualitative criteria
The borrower meets unlikeliness to pay criteria, which indicates the borrower is in significant financial
difficulty. These are instances where:
• The borrower is in long-term forbearance
• The borrower is insolvent
• The borrower is in breach of financial covenant(s)
• An active market for that financial asset has disappeared because of financial difficulties
• Concessions have been made by the lender relating to the borrower’s financial difficulty
• It is becoming probable that the borrower will enter bankruptcy

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(a) Credit risk (Continued)
The criteria above have been applied to all financial instruments held by the Bank and are consistent
with the definition of default used for internal credit risk management purposes. The default definition
has been applied consistently to model the Probability of Default (PD), Exposure at Default (EAD) and
Loss given Default (LGD) throughout the Bank’s expected loss calculations.

An instrument is considered to no longer be in default (i.e. to have cured) when it no longer meets any
of the default criteria for a consecutive period of six months.

Measuring ECL — Explanation of inputs, assumptions and estimation techniques

The ECL is measured on either a 12-month (12M) or Lifetime basis depending on whether a significant
increase in credit risk has occurred since initial recognition or whether an asset is considered to be
credit-impaired. Expected credit losses are the discounted product of the Probability of Default (PD),
Exposure at Default (EAD), and Loss Given Default (LGD), defined as follows:

• The PD represents the likelihood of a borrower defaulting on its financial obligation (as per
“Definition of default and credit-impaired” above), either over the next 12 months (12M PD), or
over the remaining lifetime (Lifetime PD) of the obligation.

• EAD is based on the amounts the Bank expects to be owed at the time of default, over the
next 12 months (12M EAD) or over the remaining lifetime (Lifetime EAD). For example, for a
revolving commitment, the Bank includes the current drawn balance plus any further amount
that is expected to be drawn up to the current contractual limit by the time of default, should it
occur.

• Loss Given Default (LGD) represents the Bank’s expectation of the extent of loss on a defaulted
exposure. LGD varies by type of counterparty, type and seniority of claim and availability of
collateral or other credit support. LGD is expressed as a percentage loss per unit of exposure
at the time of default (EAD). LGD is calculated on a 12-month or lifetime basis, where 12-month
LGD is the percentage of loss expected to be made if the default occurs in the next 12 months
and Lifetime LGD is the percentage of loss expected to be made if the default occurs over the
remaining expected lifetime of the loan.

The ECL is determined by projecting the PD, LGD and EAD for each future month and for each
individual exposure or collective segment. These three components are multiplied together and
adjusted for the likelihood of survival (i.e. the exposure has not prepaid or defaulted in an earlier
month). This effectively calculates an ECL for each future month, which is then discounted back to
the reporting date and summed. The discount rate used in the ECL calculation is the original effective
interest rate or an approximation thereof.

The Lifetime PD is developed by applying a maturity profile to the current 12M PD. The maturity
profile looks at how defaults develop on a portfolio from the point of initial recognition throughout the
lifetime of the loans. The maturity profile is based on historical observed data and is assumed to be
the same across all assets within a portfolio and credit grade band. This is supported by historical
analysis.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(a) Credit risk (Continued)
The 12-month and lifetime EADs are determined based on the expected payment profile, which
varies by product type.

• For amortising facilities and bullet repayment loans, this is based on the contractual repayments
owed by the borrower over a 12month or lifetime basis.

• For revolving facilities, the exposure at default is predicted by taking current drawn balance and
adding a “credit conversion factor” which allows for the expected drawdown of the remaining
limit by the time of default. These assumptions vary by product type and current limit utilisation
band, based on analysis of the Bank’s recent default data.

The 12-month and lifetime LGDs are determined based on the factors, which impact the recoveries
made post default. These vary by product type. LGDs are typically set at product level due to the
limited differentiation in recoveries achieved across different borrowers. These LGDs are influenced
by collection strategies, including contracted debt sales and price.

Forward-looking economic information is also included in determining the 12-month and lifetime
PDs, EADs and LGDs. These assumptions vary by asset type. Refer to the note overleaf for an
explanation of forward-looking information and its inclusion in ECL calculations.

The assumptions underlying the ECL calculation are monitored and reviewed on a quarterly basis or
upon new parameters being released by the ratings agencies.

There have been no significant changes in estimation techniques or significant assumptions made
during the reporting period.

Forward-looking information incorporated in the ECL models

The assessment of SICR and the calculation of ECL both incorporate forward-looking information on
the corporate and sovereign exposures derived through the external rating and outlook.

On staff lending the data is very sparse and does not practically lend itself to macroeconomic
modelling without undue cost and effort.

As with any economic forecasts, the projections and likelihoods of occurrence are subject to a high
degree of inherent uncertainty and therefore the actual outcomes may be significantly different to
those projected. The Bank considers these forecasts to represent its best estimate of the possible
outcomes and has analysed the non-linearities and asymmetries within the Bank’s different portfolios
to establish that the chosen scenarios are appropriately representative of the range of possible
scenarios.

Management overlays can also be applied should they seen to be justified, as approved by the
Board.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(a) Credit risk (Continued)
Loss allowance
The loss allowance recognised in the period is impacted by a variety of factors, as described below:

• Transfers between Stage 1 and Stages 2 or 3 due to financial instruments experiencing

significant increases (or decreases) of credit risk or becoming credit-impaired in the period, and
the consequent “step up” (or “step down”) between 12-month and Lifetime ECL;

• Additional allowances for new financial instruments recognised during the period, as well as
releases for financial instruments de-recognised in the period;

• Impact on the measurement of ECL due to changes in PDs, EADs and LGDs in the period,
arising from regular refreshing of inputs to models;

• Impacts on the measurement of ECL due to changes made to models and assumptions;

• Discount unwind within ECL due to the passage of time, as ECL is measured on a present value
basis;

• Foreign exchange retranslations for assets denominated in foreign currencies and other
movements; and

• Financial assets derecognised during the period and write-offs of allowances related to assets
that were written off during the period.

The following tables explain the changes in the loss allowance between the beginning and the end of
the year due to these factors:

Stage 1 Stage 2 Stage 3

Loss allowance-Cash and 12-month ECL Lifetime ECL Lifetime ECL Total
balances with central banks and
other banks TZS 000s TZS 000s TZS 000s TZS 000s

Loss allowance as at 30 June

- - - -
2018
Restatement of the prior year 60,237 - - 60,237
Loss allowance as at 01 July
60,237 - - 60,237
2019
Movements with impact in the
Statement of Profit or Loss
New financial assets originated or
216,547 - - 216,547
purchased
Loss allowance as at 30 June
2019 276,784 - - 276,784

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(a) Credit risk (Continued)

Stage 1 Stage 2 Stage 3

12-month Lifetime
ECL ECL Lifetime ECL Total
Loss allowance – Loans and
receivables TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Loss allowance as at 30 June

2018 - - 12,193,689 12,193,689

Restatement of the prior year - - - -

Loss allowance as at 01 July
2018 2,873,407 - 12,986,959 15,860,366

Changes in the loss allowance - - - -

– Transfer to stage 1 1,596,628 - (1,596,628) -

– Transfer to stage 2 - - - -

– Transfer to stage 3 (5,704) - 5,704 -

Other movements (1,590,924) - 1,590,924 -

Movements with Impact in the
Statement of Profit or loss

– Write-offs - - - -
New financial assets originated or
purchased 1,284,558 6,359 1,808 1,292,725
Financial assets that have been
derecognised -240,265 - -10,485 -250,750
Changes in models/risk
parameters -125,849 4,302 -1,560,198 -1,681,745
Total loss movement 918,444 10,661 -1,568,875 -639,770
Loss allowance as at 30 June
2019 3,791,851 10,661 11,418,084 15,220,596

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(a) Credit risk (Continued)

Write-off policy
• The Bank writes off financial assets, in whole or in part, when it has exhausted all practical
recovery efforts and has concluded there is no reasonable expectation of recovery. Indicators
that there is no reasonable expectation of recovery include (a) ceasing enforcement activity and
(b) where the Bank’s recovery method is foreclosing on collateral and the value of the collateral
is such that there is no reasonable expectation of recovering in full.

• The Bank may write-off financial assets that are still subject to enforcement activity. The
outstanding contractual amounts of such assets written off during the year ended 30 Jun 2019-
Nil (30 June 2018 – Not applicable). The Bank will seek to recover amounts it is legally owed in
full, but which have been partially written off due to no reasonable expectation of full recovery

• Exposure to Credit Risk

Maximum exposure to credit risk — Financial instruments subject to impairment
The following table contains an analysis of the credit risk exposure of financial instruments for which
an ECL allowance is recognised. The gross carrying amounts of financial asset below also represent
the Bank’s maximum exposure to credit risk on these assets.

30 Jun 2019 30 Jun 2018

Stage 1 Stage 2 Stage 3

12-month Lifetime Lifetime
ECL ECL ECL Total Total

TZS ‘000 TZS‘000 TZS ‘000 TZS ‘000 TZS ‘000

Investment grade 13,548,310,920 - - 13,548,310,920 17,194,002,861

Standard monitoring 415,248,364 97,133 12,802,607 428,148,104 76,172,590

Default - - 10,602,164 10,602,164 23,142,301

Gross carrying amount 13,963,559,284 97,133 23,404,771 13,987,061,188 17,293,317,752

Loss allowance (4,068,635) (10,661) (11,418,084) (15,497,380) (12,193,689)

Net Carrying amount 13,959,490,649 86,472 11,986,687 13,971,563,808 17,281,124,063

Collateral and other credit enhancements

The Bank obtains collateral where appropriate, from Staff to manage their credit risk exposure to the
Bank staff. The collateral is in the form of staff properties and staff internal terminal benefits.

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 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(b) Liquidity risk
This arises from inability of the Bank to meet its own foreign exchange and government obligations
without incurring huge price concession.

Due to its nature of business (externalisation of the government obligations), a huge amount of
expected foreign cash flows is not reflected in the Statement of Financial Position. As a result,
assets-liabilities management may not be effective. Thus, to manage this risk, the Bank categorizes
its foreign exchange reserves into Liquidity, Investment, Stable tranches and special purposes
investment tranche. The liquidity tranche is intended to meet both anticipated and unanticipated
monthly cash requirements thus matching both on and off Statement of Financial Position foreign
assets and liabilities. The tranche is monitored on a daily basis. It is comprised of highly liquid short-
term financial instruments

The table below analyses the assets and liabilities of the Bank into relevant maturity based on the
remaining period at Statement of Financial Position date to contractual maturity date.

164
 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(b) Liquidity risk (Continued)
By contractual maturity analysis of financial instruments
Up to 1 From 1 to 3 From 3 to 12 From 1 to 5
Details
Month Months Months Years Over 5 Years Total
2019 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Assets
Cash and balances with central banks & other banks 2,319,388,230 2,497,311,984 - - - 4,816,700,214
Escrow accounts - - - - 11,218,286 11,218,286
Items in course of settlement - - - - - -
Holdings of Special Drawing Rights (SDRs) 67,392,346 - - - - 67,392,346
Quota in International Monetary Fund (IMF) - - - - 1,266,185,402 1,266,185,402
Foreign currency marketable securities 20,283,698 221,090,519 1,080,981,008 3,739,813,161 3,537,341 5,065,705,728
Equity investment - - - - 37,073,235 37,073,235
Government securities - 27,252,492 474,333,308 620,319,280 135,745,070 1,257,650,150

165
Advance to the Government - - 1,238,447,385 - - 1,238,447,385
Loans and receivables 20,175,814 1,785,010 320,782,332 17,645,681 62,131,885 422,520,721
Other assets (excluding prepayments) 439,452,360 - 133,500 - 28,096,253 467,682,113

Total assets 2,866,692,448 2,747,440,005 3,114,677,533 4,377,778,122 1,543,987,472 14,650,575,580

Liabilities
Currency in circulation 4,965,202,559 - - - - 4,965,202,559
Deposit - banks and non-banks financial institutions 3,457,134,887 - - - - 3,457,134,887
Bank of Tanzania Annual Report 2018/19

Deposits - Governments - - - - - -
Deposit others 2,148,235,048 - - - - 2,148,235,048
Foreign currency financial liabilities 919,256,948 - - - - 919,256,948
Items in course of settlement 25,755,244 - - - - 25,755,244
Poverty Reduction and Growth Facility - 27,508,490 55,066,670 72,960,318 45,984,597 201,520,076
BOT liquidity papers 37,990 960,572 329,755,270 - - 330,753,832
Other liabilities 72,990,052 - - - - 72,990,052
IMF Related Liabilities - - - - 1,076,082,365 1,076,082,365
Allocation of Special Drawing Rights (SDRs) - - - - 606,392,081 606,392,081

Total liabilities 11,588,612,728 28,469,062 384,821,940 72,960,318 1,728,459,043 13,803,323,092

Net liquidity gap (8,721,820,280) 2,718,970,943 2,729,855,593 4,304,817,804 (-184,471,571) 847,252,488

 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(b) Liquidity risk (Continued)
By contractual maturity analysis of financial instruments
Up to From 1 to 3 From 3 to 12 From 1 to 5
Details
1 Month Months Months Years Over 5 Years Total
2018 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Assets
Cash and balances with central banks & other banks 3,099,464,398 2,674,049,704 - - - 5,773,514,102
Escrow accounts - - - - 11,044,657 11,044,657
Items in course of settlement - - - - - -
Holdings of Special Drawing Rights (SDRs) 3,232,160 - - - - 3,232,160
Quota in International Monetary Fund (IMF) - - - - 1,268,292,685 1,268,292,685
Foreign currency marketable securities 91,516,963 310,945,769 1,705,121,254 4,404,831,429 - 6,512,415,415
Equity investment - - - - 32,203,745 32,203,745
Government securities 16,772,594 5,779,140 58,778,732 1,079,006,536 201,391,289 1,361,728,291

166
Advance to the Government - - 1,943,822,268 - - 1,943,822,268
Loans and receivables 28,032,628 87,286 318,884,652 21,927,500 49,187,076 418,119,142
Other assets (excluding prepayments) 100,493,681 - 1,024,468 - 24,999,996 126,518,145

Total assets 3,339,512,424 2,990,861,899 4,027,631,374 5,505,765,465 1,587,119,448 17,450,890,610

Liabilities
Currency in circulation 4,646,962,897 - - - - 4,646,962,897
Deposit - banks and non-banks financial institutions 3,188,338,440 - - - - 3,188,338,440
Bank of Tanzania Annual Report 2018/19

Deposits - Governments 2,544,064,269 - - - - 2,544,064,269

Deposit others 2,133,912,345 - - - - 2,133,912,345
Foreign currency financial liabilities 1,180,140,312 - - - - 1,180,140,312
Items in course of settlement 551,547 - - - - 551,547
Poverty Reduction and Growth Facility - 26,396,151 165,744,474 78,282,107 52,792,299 323,215,031
BOT liquidity papers 83,664,080 261,083,120 241,041,030 - - 585,788,230
Other liabilities 53,728,845 - - - - 53,728,845
IMF Related Liabilities - - - - 1,077,873,263 1,077,873,263
Allocation of Special Drawing Rights (SDRs) - - - - 607,401,286 607,401,286

Total liabilities 13,831,362,735 287,479,271 406,785,504 78,282,107 1,738,066,848 16,341,976,645

Net liquidity gap (10,491,850,311) 2,703,382,628 3,620,845,870 5,427,483,358 (150,947,400) 1,108,914,145

 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(b) Liquidity risk (Continued)
The following tables detail the Bank’s maturity profiles of both financial assets and liabilities.

Less than Over

2019
12 months 12 months Total
Assets TZS ‘000 TZS ‘000 TZS ‘000

Cash and balances with central banks & other

4,816,700,214 - 4,816,700,214
banks
Escrow accounts - 11,218,286 11,218,286
Items in course of settlement - - -
Holdings of Special Drawing Rights (SDRs) 67,392,346 - 67,392,346
Quota in International Monetary Fund - 1,266,185,402 1,266,185,402
Foreign Currency Marketable securities 1,322,355,226 3,743,350,502 5,065,705,728
Equity investment - 37,073,235 37,073,235
Government securities 501,585,800 756,064,350 1,257,650,150
Advance to the Government 1,238,447,385 - 1,238,447,385
Loans and receivables 342,743,155 79,777,566 422,520,721
Other assets (excluding prepayments) 439,585,860 28,096,253 467,682,113

8,728,809,986 5,921,765,594 14,650,575,580

Liabilities

Currency in circulation 4,965,202,559 - 4,965,202,559

Deposit - banks and non-banks financial insti-
tutions 3,457,134,887 - 3,457,134,887
Deposit – Others 2,148,235,048 - 2,148,235,048
Deposit – Government - - -
Foreign currency financial liabilities 919,256,948 - 919,256,948
Items in course of settlement 25,755,244 - 25,755,244
Poverty reduction and growth facility 82,575,160 118,944,915 201,520,076
BOT liquidity papers 330,753,832 - 330,753,832
Other liabilities 72,990,052 - 72,990,052
IMF related liabilities - 1,076,082,365 1,076,082,365
Allocation of Special Drawing Rights (SDRs) - 606,392,081 606,392,081
Total liabilities
12,001,903,730 1,801,419,361 13,803,323,092

Net Liquidity gap -3,273,093,744 4,120,346,233 847,252,488

167
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(b) Liquidity risk (Continued)

Less than 12 Over 12

2018
months months Total
Assets TZS ‘000 TZS ‘000 TZS ‘000

Cash and balances with central banks &

5,773,514,102 - 5,773,514,102
other banks
Escrow accounts - 11,044,657 11,044,657
Items in course of settlement - - -
Holdings of Special Drawing Rights (SDRs) 3,232,160 - 3,232,160
Quota in International Monetary Fund - 1,268,292,685 1,268,292,685
Foreign Currency Marketable securities 2,107,583,986 4,404,831,429 6,512,415,415
Equity investment - 32,203,745 32,203,745
Government securities 81,330,466 1,280,397,825 1,361,728,291
Advance to the Government 1,943,822,268 - 1,943,822,268
Loans and receivables 347,004,566 71,114,576 418,119,142
Other assets (excluding prepayments) 101,518,149 24,999,996 126,518,145
10,358,005,697 7,092,884,913 17,450,890,610

Liabilities

Currency in circulation 4,646,962,897 - 4,646,962,897

Deposit - banks and non-banks financial
institutions 3,188,338,440 - 3,188,338,440
Deposit – Others 2,133,912,345 - 2,133,912,345
Deposit – Government 2,544,064,269 - 2,544,064,269
Foreign currency financial liabilities 1,180,140,312 - 1,180,140,312
Items in course of settlement 551,547 - 551,547
Poverty reduction and growth facility 197,941,961 125,499,242 323,441,203
BOT liquidity papers 580,698,636 - 580,698,636
Other liabilities 53,728,845 - 53,728,845
IMF related liabilities - 1,077,873,263 1,077,873,263
Allocation of Special Drawing Rights (SDRs) - 607,401,286 607,401,286
Total liabilities 14,526,339,252 1,810,773,791 16,337,113,043

168
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(c) Interest rate risk
Interest rate risk is the risk that the fair value or cash flows of financial instruments will fluctuate
because of movements in market interest rates. The price of marketable securities rises when market
interest rates decline, and it falls if market rates rise. Interest rate risk increases with the maturity of
a security. Interest rate risk on foreign assets is controlled through limits on the duration of these
portfolios. Interest rate risk on Bank’s assets is relatively lower as most of the portfolio is held in
short-term. As of 30 June 2019, portfolio duration stood at 1.57 years while that of 30 June 2018 was
1.28 years. The tables below show duration for currencies;

Sensitivity to interest rate risk

For measuring the sensitivity of the Bank’s foreign exchange reserves to interest rate risk, the
portfolios are shocked with +/–1% parallel change in the respective government yield curves. The
figures below show the effect on the Bank’s profit and equity of a movement of +/–1 percentage point
in interest rates, given the level, composition and modified duration of the Bank’s foreign reserve as
at 30 June 2019.

30.06.2019 30.06.2018
TZS’000 TZS’000
USD (22,776,665) (52,148,523) (27,293,374) (62,489,793)
GBP (1,847,970) (5,374,689) (991,827) (2,884,657)
CNH (2,866,316) (955,359) (3,589,327) (1,196,342)
AUD (5,295,045) (8,497,240) (5,772,028) (9,262,679)

169
 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(c) Interest rate risk (Continued)
Portfolio Characteristics
USD
30.06.2019 30.06.2018
Asset Type Number of Duration USD TZS ‘000 Number of Duration USD TZS ‘000
Securities (Years) Securities (Years)

Market value of Marketable 165 1.39 1,717,747,036 3,932,883,459 209 1.32 2,178,149,201 4,937,395,974
Securities
Money Markets placements 57 0.13 1,276,261,190 2,922,075,496 79 0.11 1,743,999,984 3,953,112,418

EUR

170
30.06.2019 30.06.2018
Number of Duration Position of Duration
Base currency Securities (Years) EUR TZS ‘000 Securties (Years) EUR TZS ‘000
Market value of Marketable
- - - - 33 2.42 186,096,777 491,256,937
Securities

GBP
Bank of Tanzania Annual Report 2018/19

30.06.2019 30.06.2018

Number of Duration Number of Duration

Asset Type USD TZS ‘000 USD TZS ‘000
Securities (Years) Securities (Years)
Market value of Marketable
14 2.04 281,864,553 645,345,568 14 2.16 128,632,623 383,240,764
Securities
Money Markets placements 4 0.23 49,583,007 113,523,228 13 0.08 125,499,999 373,907,597
 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(c) Interest rate risk (Continued)
Portfolio Characteristics
AUD
30.06.2019 30.06.2018
Asset Type Number of Duration USD TZS ‘000 Number of Duration USD TZS ‘000
Securities (Years) Securities (Years)
Market value of Marketable Securities 11 2.76 140,609,128 321,932,918 15 2 246,337,954 412,302,533
Money Markets placements 4 0.06 26,666,495 61,054,519 6 0 63,000,000 105,444,812

CNY
30.06.2019 30.06.2018
Number of Duration Number of Duration
Asset Type USD TZS ‘000 USD TZS ‘000
Securities (Years) Securities (Years)

171
Market value of Marketable Securities 17 1.64 86,801,239.68 198,736,573 19 1.65 741,890,305 254,090,233
Money Markets placements 12 0.11 132,919,977 304,328,150 10 0.14 685,999,944 234,948,346

Portfolio Value-at-Risk
The Bank also uses Value-at-Risk(VaR) to measure and monitor interest rate risk. VaR is a probabilistic measure of risk, which provides an
estimate of the maximum potential loss in the value of the Bank’s positions due to adverse interest rate movements over a defined time horizon
with a specified confidence level. The Bank applies a one-month time horizon and a 95 percent confidence level to calculate VaR reported below.
Bank of Tanzania Annual Report 2018/19

This means that there is a 5 percent chance that the monthly income would fall below the expected monthly income by an amount at least as
large as reported VaR. VaR for major currencies;

Details 30.06.2019 30.06.2018

TZS ‘000 TZS ‘000
USD 7,349,012 16,825,998 5,059,782 11,468,972
EUR 0 0 664,230 1,7563,430
GBP 939,592 2,732,736 591,231 1,761,480
AUD 1,285,880 2,063,520 1,232,725 2,063,245
CNY 1,588,996 529,621 11,214,427 3,840,832
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(c) Interest rate risk (Continued)

Stress Testing
The Bank’s foreign reserves portfolios are stressed to mimic various extreme market conditions.
To that end, the Bank considered three main scenarios i.e. spread widening, curve steeping and
flattening by 0.5 percentage points. The result of stress testing scenarios is as shown on the table
below.

(Amounts in USD equivalent)

30.06.2019
TOTAL TZS’
BPS USD EUR GBP AUD CNH 000
Spread widening
(8,129,679) - (1,842,425) (2,646,435) (294,750) (28,317,061)
by 50
Curve Steepening
(8,224,208) - (1,905,349) (2,391,138) (1,182,092) (28,602,567)
by 50
Curve flattening by
8,247,468 - 2,022,537 2,239,373 1,182,092 28,753,110
50

30.06.2018
Spread widening
(1,540,170) 3,982 (11,134) (73,214) (89,691) (3,667,010)
by 50
Curve Steepening
(9,475,077) (1,512,659) (1,220,502) (2,496,601) (4,659,351) (34,880,903)
by 50
Curve flattening by
9,577,405 1,542,732 1,238,378 2,537,010 4,714,460 35,332,002
50

172
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(d) Currency risk
The exchange rate risk (or currency risk) refers to the loss of the portfolio value or purchasing power
of the portfolio occasioned by adverse foreign exchange rate movements. The Bank foreign reserves
portfolio is denominated in a number of currencies whose exchange rates are subject to fluctuation
on international foreign exchange market.

Based on the sensitivity of the ten per cent deviation of the exchange rate against major currencies
the impact on the Banks profit and equity was TZS 882,46.1 million (2018: TZS 1,056.8 million).

The Bank is exposed to this risk in the context of its holding of foreign exchange reserves, intervention
in the local inter-bank foreign exchange market (IFEM) and foreign exchange transactions in the
international foreign exchange market. Often, currency exposures are not out rightly hedged, but the
currency risk is controlled through a target currency composition whose criteria are specified in the
Investment Policy and stated in the Investment Guidelines. The target currency composition attempts
to match the composition of on and off balance sheet foreign denominated obligations, thereby
managing adverse currency movement at the national level. The currency positions of the Bank as of
30 June 2019 and 2018 which provides the Bank’s assets, liabilities and equity at carrying amounts,
categorised by currency is summarised below.

173
 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(d) Currency risk
Details GBP USD EUR SDR TZS Others Total
TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000
2019
Assets
Cash and balances with central banks & other banks 172,603,493 4,146,026,035 8,425,680 - - 489,645,005 4,816,700,214
Escrow accounts - 11,218,286 - - - - 11,218,286
Items in course of settlement - - - - - - -
Holdings of Special Drawing Rights (SDRs) - - - 67,392,307 - - 67,392,346
Quota in International Monetary Fund (IMF) - - - 1,266,184,670 - - 1,266,185,402
Foreign currency marketable securities 645,317,555 3,899,945,550 - - - 520,442,623 5,065,705,728
Equity investments - 35,930,454 1,142,781 - - - 37,073,235
Government securities - - - - 1,257,650,150 - 1,257,650,150
Advances to the Government - - - - 1,238,447,385 - 1,238,447,385
Loans and receivables - 29,356,330 - - 369,093,094 24,071,297 422,520,721
Other assets (Excluding prepayments) - - - - 467,682,113 - 467,682,113

174
Total financial assets 817,921,049 8,122,476,655 9,568,461 1,333,576,977 3,332,872,742 1,034,158,925 14,650,575,580

Liabilities
Currency in circulation - - - - 4,965,202,559 - 4,965,202,559
Deposits - banks and non-bank financial institutions - 432,187,017 - - 3,024,947,870 - 3,457,134,887
Deposits – Governments - - - - - - -
Deposits – Others 764,830 396,862,096 1,886,197 - 1,748,677,390 44,534 2,148,235,048
Items in course of settlement - 25,534,151 - - 221,093 - 25,755,244
Bank of Tanzania Annual Report 2018/19

Foreign currency financial liabilities - 890,776,395 8,890,541 - 18,836,695 753,317 919,256,948

Poverty reduction and growth facility - - - 130,856,840 - - 130,856,840
BoT liquidity papers - - - - 330,753,832 - 330,753,832
Other liabilities - 293,172 - - 72,696,880 - 72,990,052
IMF related liabilities - - - - 1,076,082,365 - 1,076,082,365
Allocation of Special Drawing Rights (SDRs) - - - 606,392,081 - - 606,392,081

764,830 1,745,652,830 10,776,738 737,248,921 11,237,418,684 797,851 13,732,659,856

Net liquidity gap 817,156,218 6,376,823,825 (1,208,277) 596,328,827 N/A 1,033,361,074 8,822,460,895

Scenario of 10% appreciation/depreciation 81,715,622 637,682,383 (120,828) 59,632,883 N/A 103,336,107 882,246,090
 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
(d) Currency risk
Details GBP USD EUR SDR TZS Others Total
TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000
2018
Assets
Cash and balances with central banks & other banks 389,765,954 4,976,765,210 43,967,988 - - 363,014,950 5,773,514,102
Escrow accounts - 11,044,657 - - - - 11,044,657
Items in course of settlement - - - - - - -
Holdings of Special Drawing Rights (SDRs) - - - 3,232,160 - - 3,232,160
Quota in International Monetary Fund (IMF) - - - 1,268,292,685 - - 1,268,292,685
Foreign currency marketable securities 386,637,795 4,959,545,489 495,436,062 - - 670,796,069 6,512,415,415
Equity investments - 31,045,932 1,157,813 - - - 32,203,745
Government securities - - - - 1,361,728,291 - 1,361,728,291
Advances to the Government - - - - 1,943,822,268 - 1,943,822,268
Loans and receivables - 20,429,602 - - 397,689,540 - 418,119,142
Other assets (Excluding prepayments)

175
- - - - 132,334,677 - 132,334,677
Total financial assets 776,403,749 9,998,830,890 540,561,863 1,271,524,845 3,835,574,776 1,033,811,019 17,456,707,142
Liabilities
Currency in circulation - - - - 4,646,962,897 - 4,646,962,897
Deposits - banks and non-bank financial institutions 1,385 714,035,293 116,205 - 2,471,859,007 2,326,550 3,188,338,440
Deposits – Governments - - - - 2,544,064,269 - 2,544,064,269
Deposits – Others 1,413,327 206,041,476 1,942,661 - 1,923,659,945 854,936 2,133,912,345
Bank of Tanzania Annual Report 2018/19

Items in course of settlement - 212,604 - - 329,193 9,750 551,547

Foreign currency financial liabilities - 1,130,149,310 45,252,834 - 4,738,168 - 1,180,140,312
Poverty reduction and growth facility - - - 323,441,203 - - 323,441,203
BoT liquidity papers - - - - 580,698,636 - 580,698,636
Other liabilities - 20,669,983 - - 33,058,862 - 53,728,845
IMF related liabilities - - - - 1,077,873,263 - 1,077,873,263
1,414,712 2,071,108,666 47,311,700 930,842,489 13,283,244,240 3,191,236 16,337,113,043

Net liquidity gap 774,989,037 7,927,722,224 493,250,163 340,682,356 N/A 1,030,619,783 10,567,263,563

Scenario of 10% appreciation/depreciation 77,498,904 792,772,222 49,325,016 34,068,236 N/A 103,061,978 1,056,726,356
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
Non-financial risks
Operational risk
This risk stems from inadequate or failed internal processes, people and systems, or from external
events. The risk can potentially disrupt continuity of critical business operations and processes and
thereby impede attainment of strategic goals and objectives.

The Bank addresses this risk inter alia through ensuring existence of Business Continuity Management
(BCM) and sound internal control system which includes: operational and procedural manuals, ICT
security policies, back up facilities, contingency planning, and independent internal audit function.
Managing operational risk in the Bank is an integral part of day-to-day operations by the management.
Risk management function, Risk Management Committee, Internal Audit Function, Management,
Finance and Investment Committee of the Board and the Board, closely monitor this risk.

The Bank has taken various measures such as segregation of duties, instituting codes of conduct
and ethics and setting out benchmark limits. The Bank understands the fact that the lower the human
intervention, the lower the operational risk. In view of this fact, the Bank has automated most of its
major operations.

Human resource risk

This risk relates to unavailability of skilled manpower, training and development programs,
compensation, benefits, mis-aligned HR policies, work life imbalance and policy constraints. The
Bank is prone to human resource risk due to its particular nature of the activities which, necessitates
specialised knowledge in many areas

The Bank ensures that there is an adequate knowledge base for all specialised job requirements by
investing significantly in human resource development in terms of capacity building and practical
exposure. The Bank also organises workshops, seminars, conferences and job attachments to its
staff as an effort to improve its human resource requirements. It also revises its staff retention scheme
to compete with the prevailing labour market.

Legal risk
Legal risk arise out of adverse judgment, risks associated with failure of processes, systems and
resources to support legal and regulatory requirements, or actions that can result into legal dispute
against the organisation.

In mitigating this type of the risk, the Bank ensures that all business agreements are contracted under
Standard Industry Contracts, e.g. ISDA, ISMA, etc. Where new contracts and substantive changes to
existing contracts are entered to, external lawyers are contracted. The Bank has in place procedures
for delegation of responsibilities. Also, Code of Conduct and Ethics and continuous consultations
with all relevant parties are used to minimise chances of causing legal disputes between the Bank
and its counterparts.

176
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

43. RISK MANAGEMENT (CONTINUED)

43.3 Financial risks (Continued)
Reputational risk
Reputational risk arises from the failure of an organisation to meet the expectations of its clients,
stakeholders and the general public. The risk also emanates from failure to comply with relevant laws
and contractual agreements.

The Bank has an obligation to ensure that it performs its functions and maintains its reputation as a
Central Bank in line with requirements of the provision of Section 5(1) of the Bank of Tanzania Act,
2006 and other laws and regulations.

In view of the above, the management ensures that to the best of Bank’s ability fulfils its fiduciary
responsibilities. The Bank adheres to the best practices and applies principle of sound corporate
governance. It also ensures that all relevant employees have clear understanding of the appropriate
processes in respect of the best practices and principals of good governance.

The Bank therefore sets out policies and guidelines that govern sound functional operations within
the Bank. The performance of these policies and guidelines are periodically reported to different
levels of the Bank’s management for control and compliance monitoring.

The top management of the Bank has the necessary freedom and discretion to exercise central
banking functions. However, this freedom is exercised within the context of fiduciary duties of good
governance and by ensuring a proper balance between accountability and the best interests of the
Bank and its various stakeholders.

The function of the Bank of overseeing and ensuring the integrity of the country’s banking system
exposes it to severe criticism whenever there is an incident of bank failure or systemic difficulty.
The responsibilities of the Bank regarding monetary policy, the national payment system and the
issuing of notes and coins also expose the Bank to significant reputation risk. The Bank adheres to
international best practice and, to this end, maintains close liaison with international peers. The Bank
strives towards full compliance with the principles for effective banking supervision as well as the
core principles for systemically important payment systems.

177
 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

44. CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES

Financial assets and financial liabilities are measured on an ongoing basis either at fair value or amortised cost. A summary of significant
accounting policies in Note 3 describes how classes of financial instruments are measured and how income and expenses, including fair value
gains are recognised. The following table analyses the carrying amounts of the financial assets and liabilities by category:

2019 Amortised Cost FVTPL FVOCI Total Fair values

TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000
Financial assets

Cash and balances with central banks & other banks 4,816,700,214 - - 4,816,700,214 4,816,700,214
Escrow accounts 11,218,286 - - 11,218,286 11,218,286
Items in course of settlement - - - - -
Holdings of Special Drawing Rights (SDRs) 67,392,346 - - 67,392,346 67,392,346
Quota in International Monetary Fund (IMF) 1,266,185,402 - - 1,266,185,402 1,266,185,402
Foreign currency marketable securities - 641,938,537 4,423,767,191 5,065,705,728 5,065,705,728
Equity investment - - 37,073,235 37,073,235 37,073,235

178
Government securities 1,257,650,150 - - 1,257,650,150 1,257,650,150
Advances to the Government 1,238,447,385 - - 1,238,447,385 1,238,447,385
Loans and receivables 422,520,721 - - 422,520,721 422,520,721
Other assets (Excluding prepayments) 467,682,113 - - 467,682,113 467,682,113
9,547,796,617 641,938,537 4,460,840,426 14,650,575,580 14,650,575,580

Financial liabilities
Bank of Tanzania Annual Report 2018/19

Currency in circulation 4,965,202,559 - - 4,965,202,559 4,965,202,559

Deposits - banks and non-banks financial institutions 3,457,134,887 - - 3,457,134,887 3,457,134,887
Deposits - others 2,148,235,048 - - 2,148,235,048 2,148,235,048
Deposits - Government - - - - -
Foreign currency financial liabilities 919,256,948 - - 919,256,948 919,256,948
Items in course of settlement - - -
Poverty deduction and growth facility 130,856,764 - - 130,856,764 130,856,764
BoT liquidity papers 330,753,832 - - 330,753,832 330,753,832
Other liabilities 72,990,052 - - 72,990,052 72,990,052
IMF related liabilities 1,076,082,365 - - 1,076,082,365 1,077,873,263
Allocation of Special Drawing Rights (SDRs) 606,392,081 - - 606,392,081 606,392,081
13,706,904,536 - - 13,706,904,536 13,708,695,434
 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

44. CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES (CONTINUED)

2018 Amortised Cost FVTPL FVOCI Total Fair values

TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000
Financial assets

Cash and balances with central banks & other banks 5,773,514,102 - - 5,773,522,308 5,773,522,308
Escrow accounts 11,044,657 - - 11,044,657 11,044,657
Items in course of settlement - - - - -
Holdings of Special Drawing Rights (SDRs) 3,232,160 - - 3,232,160 3,232,160
Quota in International Monetary Fund (IMF) 1,268,292,685 - - 1,268,292,685 1,268,292,685
Foreign currency marketable securities - 6,512,415,415 - 6,512,415,415 6,512,415,415
Equity investment - - 32,203,745 32,203,745 32,203,745
Government securities 1,361,728,291 - - 1,361,728,291 1,361,728,291
Advances to the Government 1,943,822,268 - - 1,943,822,268 1,943,822,268

179
Loans and receivables 418,119,142 - - 418,119,142 418,119,142
Other assets (Excluding prepayments) 126,518,145 - - 126,518,145 126,518,145
10,906,271,450 6,512,415,415 32,203,745 17,450,898,816 17,450,898,816

Financial liabilities
Currency in circulation 4,646,962,897 - - 4,646,962,897 4,646,962,897
Bank of Tanzania Annual Report 2018/19

Deposits - banks and non-banks financial institutions 3,188,338,440 - - 3,188,338,440 3,188,338,440

Deposits - others 2,133,912,345 - - 2,133,912,345 2,133,912,345
Deposits - Government 2,544,064,269 - - 2,544,064,269 2,544,064,269
Foreign currency financial liabilities 1,180,140,312 - - 1,180,140,312 1,180,140,312
Items in course of settlement 551,547 - - 551,547 551,547
Poverty deduction and growth facility 323,441,203 - - 323,441,203 323,441,203
BoT liquidity papers 580,698,636 - - 580,698,636 580,698,636
Other liabilities 53,728,845 - - 53,728,845 53,728,845
IMF related liabilities 1,077,873,263 - - 1,077,873,263 1,077,873,263
Allocation of Special Drawing Rights (SDRs) 607,401,286 - - 607,401,286 607,401,286
 Bank of Tanzania Annual Report 2018/19

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

45. DETERMINATIONS OF FAIR VALUE AND FAIR VALUE HIERACHY

Financial instruments recorded at fair value

Estimated fair value is the amount at which an instrument could be exchanged in a current transaction
between willing parties other than enforced or liquidation sale. The following is a description of how
fair values are determined for financial instruments that are recorded at fair value using valuation
techniques. These incorporate the Bank’s estimate of assumptions that a market participant would
make when valuing the instruments.
Foreign currency marketable securities
The marketable securities are quoted in actively traded markets which is the best evidence of fair
value. The valuation techniques employ only observable market data.
Fair value of derivatives
The Bank values over the counter derivative instruments like swaps using a valuation technique
with market-observable inputs. Swap models use present value calculations and include market
determined foreign exchange rates. For listed derivatives like futures, the Bank uses prices quoted in
the active markets.
Long dated derivative contracts are valued using a valuation technique with significant non–
market-observable. These derivatives are valued using models that calculate the present value and
incorporate various non–observable assumptions that include market rate volatilities.

Unquoted equities securities.

These Investments are valued using the market approach. The inputs to this methodology are
observable inputs based on recent transactions. The data used were from recently published
accounts of these entities. These were then corroborated to arrive at the fair values at the reporting
date.
Fair value of financial assets and liabilities not carried at fair value
Below are the methodologies and assumptions used to determine fair values for those financial
instruments which are not recorded at fair value in the financial statements:
Assets and liabilities for which fair value approximates carrying value
For financial assets and financial liabilities that have a short term maturity (less than three months) it
is assumed that the carrying amounts approximate their fair value. This assumption is also applied
to cash and cash equivalent, escrow accounts, items in course of settlements, deposits, repurchase
agreements and BoT liquidity papers and other liabilities without a specific maturity.
Government securities
The fair value of Government securities carried at amortised cost is estimated by using the interest
rates that discount future cash flows to zero.

Fair value of financial assets and liabilities

Financial instruments are grouped into 3 levels based on the degree to which fair value data / input
is observable.
• Level 1 fair value measurements: are those derived from quoted prices (unadjusted) in active
markets for identical assets or liabilities. This level includes listed debt instruments on exchanges
for example Foreign Currency Marketable securities.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

45 DETERMINATIONS OF FAIR VALUE AND FAIR VALUE HIERACHY (Continued)

Fair value of financial assets and liabilities (continued)
• Level 2 fair value measurements: are those derived from inputs other than quoted prices that
are observable for the asset or liability, either directly (i.e. as a price) or indirectly (i.e. derived
from prices). Input data for this category is sourced mainly from Bloomberg and the Dar es
Salaam Securities Exchange.
• Level 3 fair value measurements: are those derived from valuation techniques that include
inputs that are not based on observable market data (unobservable inputs).

Fair value hierarchy

The following table analyses within the value hierarchy the Bank are measured at fair value as at:
30.06.2019
Description Level 1 Level 2 Level 3
TZS ‘000 TZS ‘000 TZS ‘000
Foreign currency marketable securities 5,065,705,728 - -
Equity investments - 37,073,235 -
Total 5,065,705,728 37,073,235 -

30.06.2018
Description Level 1 Level 2 Level 3
TZS ‘000 TZS ‘000 TZS ‘000
Foreign currency marketable securities 6,512,415,415 - -
Equity investments - 32,203,745 -
Total 6,512,415,415 32,203,745 -

There were no transfers between levels 1, 2 and 3 in the period.If below observable inputs to valuation
model were 10 per cent higher or lower while other variables were held constant, carrying amount
of TZS 5,065,705.7 million and TZS 37,073.2 million Foreign Currency Marketable Securities and
Equity Investments would have been higher or lower by TZS 5,065,70.6 million and TZS 3,707.3
million respectively. Futures would change by 595.5 million, and Swap by 214.7 million respectively.

The following table gives information about how the fair value of these financial assets and liabilities
are determined.
Relationship of
Valuation Significant unobservable
techniques and unobservable input to fair
Fair value at Hierarchy key inputs inputs value
2019 2018
TZS ‘000 TZS ‘000
Foreign currency
Prices of listed
marketable securities 5,065,705,728 6,512,415,415 1 N/A N/A
securities
(Excluding futures)
Prices of recent
Equity investments 37,073,235 32,203,745 2 N/A N/A
transactions
Derivatives:
Discounted Cash-
flows, using market
Swap Asset 214,691 214,691 2 N/A N/A
exchange and
interest rate
Futures Asset/
595,475 332,589 1 Quoted prices N/A N/A
(Liability)

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

45 DETERMINATIONS OF FAIR VALUE AND FAIR VALUE HIERACHY (Continued)

Fair value hierarchy (Continued)
The following table analyses within the fair value hierarchy the Bank’s assets and liabilities not
measured at fair value.

2019 Level 1 Level 2 Level 3 Total

Assets TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000
Cash and balances with central
4,816,700,214 - - 4,816,700,214
banks & other banks
Escrow accounts - 11,218,286 - 11,218,286
Items in course of settlement - - - -
Holdings of Special Drawing
- 67,392,346 - 67,392,346
Rights (SDRs)
Quota in International Monetary
- 1,266,185,402 - 1,266,185,402
Fund (IMF)
Foreign currency marketable
5,065,705,728 - - 5,065,705,728
securities
Equity investment - 37,073,235 - 37,073,235
Government securities - 1,257,650,150 - 1,257,650,150
Advances to the Government - 1,238,447,385 - 1,238,447,385
Loans and receivables - 422,520,721 - 422,520,721
Other assets (Excluding pre-
- 467,682,113 - 467,682,113
payments)

9,882,405,942 4,768,169,638 - 14,650,575,580

Liabilities
Currency in circulation - 4,965,202,559 - 4,965,202,559
Deposits - banks and non-
- -
banks financial institutions 3,457,134,887 3,457,134,887
Deposits - others - 2,148,235,048 - 2,148,235,048
Deposits - Government - - - -
Foreign currency financial
- 919,256,948 - 919,256,948
liabilities
Items in course of settlement - 25,755,244 - 25,755,244
Poverty deduction and growth
- 130,856,840 - 130,856,840
facility
BoT liquidity papers - 330,753,832 - 330,753,832
Other liabilities - 72,990,052 - 72,990,052
IMF related liabilities - 1,076,082,365 - 1,076,082,365
Allocation of Special Drawing
- 606,392,081 - 606,392,081
Rights (SDRs)

- 13,732,659,856 - 13,732,659,856

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

45 DETERMINATIONS OF FAIR VALUE AND FAIR VALUE HIERACHY (Continued)

Fair value hierarchy (Continued)

2018 Level 1 Level 2 Level 3 Total

Assets TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Cash and balances with central

5,773,514,102 - - 5,773,514,102
banks & other banks
Escrow accounts - 11,044,657 - 11,044,657
Items in course of settlement - - - -
Holdings of Special Drawing
- 3,232,160 - 3,232,160
Rights (SDRs)
Quota in International Monetary
- 1,268,292,685 - 1,268,292,685
Fund (IMF)
Foreign currency marketable
6,512,415,415 - - 6,512,415,415
securities
Equity investment - 32,203,745 - 32,203,745
Government securities - 1,361,728,291 - 1,361,728,291
Advances to the Government - 1,943,822,268 - 1,943,822,268
Loans and receivables - 418,119,142 - 418,119,142
Other assets
- 126,518,145 - 126,518,145
(Excluding prepayments)

12,285,929,517 5,164,961,093 - 17,450,890,610

Liabilities

Currency in circulation - 4,646,962,897 - 4,646,962,897

Deposits - banks and non-banks
- -
financial institutions 3,188,338,440 3,188,338,440
Deposits - others - 2,133,912,345 - 2,133,912,345
Deposits - Government - 2,544,064,269 - 2,544,064,269
Foreign currency financial
- 1,180,140,310 - 1,180,140,310
liabilities
Poverty deduction and growth
- 551,547 - 551,547
facility
BoT liquidity papers - 323,441,203 - 323,441,203
Other liabilities - 580,698,636 - 580,698,636
IMF related liabilities - 53,728,845 - 53,728,845
Allocation of Special Drawing
- 1,077,873,263 - 1,077,873,263
Rights (SDRs)

- 16,335,142,424 - 16,335,142,424

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

46. RETIREMENT BENEFIT PLAN

Defined Benefit Plan
The Bank operates a funded lump sum end of service and Long Service Award Benefit Fund. The
Scheme was registered effective 13 April 2017 by Social Security Regulatory Authority. Under the plan
employees are entitled to benefits upon meeting requirements as stipulated in the Bank’s Financial
Regulations, 2011 and Staff Bylaws, 2015 and the Scheme rules.

The plan provides benefits of a defined benefit nature. Therefore, one of the main risks relating to the
benefits under the Scheme is the rates of salary growth. As most of the benefits are based on the
final salary, any changes in salary that differ from the salary escalation rate assumed will have a direct
bearing on the benefits paid and the present value of the benefit obligation under the Scheme.

Similarly, any increases to the fixed lump sum amounts that differ from the assumed escalation rates
for these amounts will also have a direct bearing on the benefits paid and the present value of the
benefit obligation under the Scheme. The plan typically exposes the Bank to actuarial risks such as:
investment risk, interest rate risk, longevity risk and salary risk.

Investment Risk The present value of the defined benefit obligations is calculated using
a discount rate determined by the yield on long term Government bond.
The higher the discount rate the higher the defined benefits obligations
payable by the Bank.

Interest Rate Risk A decrease in the long term government bond interest will increase the
plan liability.

Longevity Risk The present value of the defined benefits obligations is calculated by
reference to the best estimate of the mortality rate of plan members both
during and after their employment. An increase in the life expectancy of
the plan participants will increase the plan’s liability.

Salary Risk The present value of the defined benefits obligations is calculated by
reference to the future salaries of the members. As such an increase/
decrease in the salary of the members will increase the plan’s liability.

Actuarial valuation of the Scheme was carried out for the year ended 30 June 2019. The principle
assumptions used for the purposes of the valuation included discount rate, expected return on Scheme
assets, future salary increase, mortality rate, withdrawals, Ill-Health and compulsory retirement age
as per the below:

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

46 RETIREMENT BENEFIT PLAN (CONTINUED)

Defined benefit Plan (Continued)

Actuarial Assumptions
30.06.2019 30.06.2018
Discount rate (% p.a.) 15.7% 14.4%
Expected return on Scheme assets (% p.a.) n/a n/a
Non-Executives - Future salary increases (% p.a.) 6.0% 6.0%
Executives - Future salary increases (% p.a.) 0.0% 0.00%
Future increases in Long Service Awards (% p.a.)
Mortality (pre-retirement) A1949-1952 A1949-1952
Mortality (post-retirement) n/a n/a

At rates consistent At rates consistent

Withdrawals (voluntary) with similar with similar
arrangements arrangements
At rates consistent At rates consistent
Ill - Health with similar with similar
arrangements arrangements
Retirement Age 60 years 60 years

As per the fund operations and valuation, the movements in the present value of defined benefit
obligation in the current year were as follows:

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

Opening benefit obligation 120,058,076 109,258,076

Current service costs 4,221,867 2,476,000
Past service cost - -
Interest cost 11,289,778 16,352,000
Employee contribution 554,919 552,000
Actuarial loss/(gain) in experience (8,205,005) 2,425,000
Actuarial loss in assumptions (5,351,078) 8,661,000
Benefits paid (20,584,446) (19,666,000)

Closing benefits obligation 101,984,110 120,058,076

A summary of the distribution of the Scheme assets as at 30 June 2019, based on the Scheme
management accounts, is shown in the table below;
30.06.2019 30.06.2018
TZS “000 TZS “000

Cash 3,773,593 1,970,619

Treasury Bonds plus accrued Interest 79,440,707 64,260,573
Treasury Bills plus accrued Interest 30,011,775 36,136,929
Retirement Benefits Payable (3,014,309) (1,295,045)

Net Assets 110,211,766 101,073,076

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

46 RETIREMENT BENEFIT PLAN (CONTINUED)

Defined benefit Plan (Continued)
Being a funded Scheme, the defined obligation/(asset) is presented in net terms after consideration
of the Scheme assets as per the below;
30.06.2019 30.06.2018
TZS “000 TZS “000

Present value of funded obligations 101,984,110 120,058,076

Fair value of Scheme assets (110,211,766) (101,073,076)
Present value of net obligation/ (asset) (8,227,657) 18,985,000
Defined benefit obligation/ (asset) recognized in the
balance sheet (8,227,657) 18,985,000

Included in the computation are benefit plan expenses which are recognized in the Statement of
Profit or Loss statement. Below are the components:

Service cost 30.06.2019

TZS ‘000
Current service cost net of employees’ contributions 4,221,867
Past service cost -
Total Service Cost 4,221,867
Interest Income
Interest cost on defined benefit obligation 11,289,778
Interest income on plan assets (14,158,153)
Net Interest income on Balance Sheet Asset (2,868,375)
Total included in profit or loss in respect of Scheme 1,353,491

Re-measurement on defined benefit are measured through other comprehensive Income and it is
composed of the below;
Re-measurements (OCI) 30 06 2019
TZS ‘000
Actuarial gain- obligation (13,556,083)
Return on plan assets (excluding amount in interest cost) 3,974,935
Amount recognised in OCI statement for the financial year (9,581,148)

Development of net obligation

30.06.2019 30.06.2018
TZS “000 TZS “000
Net (obligation)/asset at the beginning of the year 18,985,000 16,046,813
Net expenses recognized in the income statement 1,353,491 3,976,000
Employer’s contribution - -
Amount recognized in OCI (9,581,148) 15,009,000
Settlement/Employer’s contribution (18,985,000) (16,046,813)
Net (asset)/ liability at end of period (8,227,657) 18,985,000

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

46 RETIREMENT BENEFIT PLAN (CONTINUED)

Defined benefit Plan (Continued)
Sensitivity analysis
The results of the actuarial valuation are more sensitive to changes in the financial assumptions than
changes in the demographic assumptions. In preparing the sensitivity analysis of the results to the discount
used, we have relied on the duration of the liability. Based on this methodology, the one percent reduction
in the discount rate will result into an increase in the defined benefits obligations to TZS 106.4 billion (2018:
TZS 110.0 billion).

Since the bulk of benefits payable under the arrangement are salary related, the sensitivity of a liability to a
change in the salary escalation assumption is not expected to be materially different. However, the impact
of a change in salary escalation is expected to be less than the impact of a change in the discount rate as
a portion of the liability. In this case long service awards would not be affected by a change in the salary
escalation rate. Weighted average duration of the liability as at 30 June 2019 is 4.8 years (2017: 4.5 years).

Effect on Bank’s cash flow

The benefits arrangement is funded, and the Bank pays benefits from the defined benefit obligation as and
when they arise. The timing of the benefit payments from the arrangement will be influenced by the age at
which employees leave the Bank.

47. CAPITAL
Section 17 of the Bank of Tanzania Act, 2006 states that “the authorised capital of the Bank shall be one
hundred billion shillings, provided that it may be increased by such amount as may be determined by the
Board, and authorised by the Minister, by Notice published in the Government Gazette.”

The capital of the Bank is subscribed and held only by the Government of the United Republic of Tanzania.
The equity of the Bank includes share capital and reserves. During the year, movement of equity is as
shown below and further details are provided in the statement of changes in owners’ equity on page 78.

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

Capital 100,000,000 100,000,000

Reserves 1,914,342,188 2,085,140,300
Total 2,014,342,188 2,185,140,300

The Bank is not subject to any capital adequacy regulatory requirements concerning the level of capital in
relation to assets it holds, although the Bank of Tanzania Act, 2006 sets out how the statutory annual net
profit for the year shall be allocated. The principal source of capital increase is through appropriations of
annual profits to various reserves.

The Bank is not for profit organisation, nor does it seek profit maximisation. Instead it seeks to make profit
commensurate with normal market returns in areas where it conducts normal commercial operations.

Capital is not actively managed and the relative low risk nature of most of the Bank’s activities means
that it is not capital intensive. Its purpose is to cover unexpected losses. The most significant unexpected
losses are likely to rise out of the support operations and the Bank’s role as the lender of last resort, or
from losses on price movements and changes in exchange rates on the Bank’s foreign investments.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

48. CONTINGENT LIABILITIES

Contingent liabilities arise in the normal course of the Bank’s business activities. In order to meet the
financial needs of the government, the Bank enters into various irrevocable commitments and contingent
liabilities. Even though these obligations may not be recognised on the statement of financial position, they
do contain credit risk and are therefore part of the overall risk of the Bank.

(a) External payment arrears deposit account

In the ordinary course of business, the Bank is subject to threatened or ac-tual legal proceedings. All such
material cases are periodically reassessed to determine the likelihood of the Bank incurring a liability. In
those instances, where it is concluded that it is more likely that a payment will be made, a provision is
established to management’s best estimate of the amount required to settle the obligation at the relevant
statement of financial position date. In some cases, it will not be possible to form a view, either because
the facts are unclear or because further time is needed to properly assess the merits of the case and no
provisions are held against such cases. However, the Bank does not currently expect the final outcome of
any such case to have a material adverse effect on its financial position.

During the 1970s and 1980s there was a shortage of foreign currencies in the country, which required the
Government to control and prioritise foreign payments (forex). Tanzania importers were required to remit
equivalent amount of TZS with the then National Bank of Commerce (NBC) for the required amount of
forex and subject to availability of forex and priority, the forex amount would be remitted to the intended
overseas suppliers.

However due to the forex shortage not all funds deposited with the then NBC by private and public
importers were remitted to the overseas suppliers’ accounts.

In 1985, the Government of the United Republic of Tanzania formally assumed the responsibility of handling
liabilities arising from External Payment Arrears deposit account (EPA) from the then NBC. The Bank was
given the responsibility to manage EPA liabilities on behalf of the Government of the United Republic of
Tanzania. As at 30 June 2018 the balance in this liability account has remained at the same level as it was
in the previous year of TZS 2,288.4 million since the Bank has suspended all transactions relating to EPA
pending reconciliation and resolution of the remaining external payment arrears. In order to undertake the
reconciliation and resolution of the remaining balance, on 14 April 2009 the Bank engaged a consultant,
M/S Lazard Freres’s & CIE to assist in the process.

The objectives of the exercise were:

(i) To ascertain how the remaining debt as at 2004 has been handled.
(ii) To compile and establish the current stock of the remaining EPA debts.
(iii) To develop, jointly with the Ministry of Finance and Planning and Bank of Tanzania, a strategy and
action plan to handle the unsettled claims.

The consultant submitted an inception report in August 2009 which was not accepted by the Bank.
Further, the original contract expired on 14 January 2010 while the consultant was yet to provide the
expected contract deliverables. Subsequent follow ups on the matter with the consultant’s assignment
proved futile. Due to non-responsiveness of the consultant to the Bank’s subsequent follow ups, on 25
July 2011, the Bank wrote to the World Bank to seek for their advice on the way forward, which was not
provided.
On 25 August 2011, the consultant wrote to the Bank demanding renewal of the expired contract; to
include:
• Upward revision of the price of the contract to USD 843,700 from the original amount of USD
663,950;

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

48 CONTINGENT LIABILITIES (CONTINUED)

(a) External payment arrears deposit account (Continued)
• Implicitly complaining for not being paid initial fee amounting to USD 175,000 after submitting
inception report; and
• Revising some items on the original contract.

Based on the original contract, the consultant would have been paid initial fee after submitting an
inception report that is acceptable to the client. However, the earlier submitted report fell short of the
required standard and the consultant was notified.

On 14 April 2012, the Bank officially informed the consultant about the expired contract and that the
Bank had no intention to renew the same.

The consultant was further informed that since the inception report that was submitted in August
2009 was not accepted by the client, there is no any accrued liability to the Bank.

The Bank’s further efforts to solicit detailed information from the World Bank on work that was done
by M/S Lazard Freres during the Debt Buyback Scheme that ended in year 2004 have proved futile.
The efforts were aimed at obtaining information that would have paved way for another consultant to
be engaged to perform the assignment. The Bank later sought legal advice on how to bring EPA to a
close. On the basis of legal advice that was obtained, and following a Board of Directors Resolution,
on 20th November 2012 the Bank officially wrote to the Minister for Finance to transfer operations
and management of the External Payment Arrears Account and public debt back to the Ministry of
Finance and Planning. The transfer was in line with the Bank’s program for shedding-off non-core
activities

(b) Export credit guarantee scheme (ECGS)

The Bank is an agent of the Government on the operationalisation of the Export Credit Guarantee
Scheme. The scheme is charged with the responsibility of considering guarantee applications from
financial institutions, and on behalf of the Principal, issue guarantees to financial institutions covering
short and long term finance to exporters as long as the capital funds in the ECGS accounts are not
leveraged more than 1:5. As a result there is a contingent liability under this scheme in respect of
guarantees, limited to five times the balance of the Fund in accordance with the agency agreement
in force.

(c) Small and medium enterprises - credit guarantee schemes

The Bank operates this scheme by issuing guarantees on behalf of the Government to financial
institutions covering medium and long-term finance to SMEs on a pilot as long as the capital funds
in the CGS-SME accounts are not leveraged more that 1:3. There is a contingent liability under this
scheme in respect of guarantees, limited to three times the balance of the Fund in accordance with
the Agency agreement in force. As at 30 June 2019, there was no outstanding guarantees as it was
for the period ended June 2018. The balance of the fund as at 30 June 2019 was TZS 521.2million
(2018: TZS 403.2million).

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

49 OUTSTANDING COMMITMENTS

Capital commitments
As at 30 June 2019, the Bank’s capital commitments in respect of, Property and Equipment, Intangible
Assets and major capital projects aggregated to TZS 72,227.5 million (2018: 82,355.5 million).

The major capital expenditure commitments item is as reflected herewith below:

30.06.2019 30.06.2018
Particulars TZS ‘000 TZS ‘000

Office buildings 3,923,830 2,506,816

Residential buildings 4,793,602 7,360,768
Machinery and equipment 19,816,988 19,170,790
Information, communication and technology (ICT) 6,967,481 4,416,115
Motor vehicles 10,192,500 4,034,500
Furniture and fittings 700,194 849,897
Intangible assets 5,822,031 2,094,759
Club premises 792,700 -
On-going projects 19,218,180 41,921,895

Total 72,227,506 82,355,540

The above commitments have been included and approved for payment in accordance with the
2019/2020 Approved Budget Estimates.

Post employment benefits

Effective July 2008, the Bank has a medical insurance arrangement, which covers retired employees
and their spouses. At the reporting date the Bank had insurance commitment amounting to TZS
286.2 million (2018: TZS 242.5million) involving retired staff with their spouses who retired since
financial year 2009/10.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

50 RELATED PARTY DISCLOSURES

In the course of its operations, the Bank enters into transactions with related parties, which include
the Government of the United Republic of Tanzania, the ultimate shareholder of the Bank, the Deposit
Insurance Fund and key management personnel. The related party transactions during the year are
as follows:

(a) Loans and emoluments to key management personnel

Key management personnel are those persons having authority and responsibility for planning,
directing and controlling the activities of the Bank. The Bank’s key management personnel are the
Governor, Deputy Governors’, Non-Executive Directors and Directors.

The Bank extends loans facilities to the Governor, the Deputy Governors and its members of staff.
Loans and receivables (Note 24) included advances to employees that as at 30 June 2019 amounted
to TZS 75,781.1 million (2018: TZS 77,946.2 million). The advances are granted at preferential rates
of interest determined by the Bank presently at 5 percent fixed over the period of the loan.

The following is the breakdown of loans and emoluments granted to key management personnel
except Non-Executive Directors.
30.06.2019 30.06.2018
TZS ‘000 TZS ‘000
i) Loans to Senior Management
(i.e. Governor, Deputy Governors and Directors)
At start of the year 2,544,089 1,739,100
Loans granted during the year 732,286 1,889,371
Loans repaid during the year (1,240,885) (1,084,382)

Balance end of the year 2,035,490 2,544,089

ii) Emoluments to Senior Management Personnel

(Governor, Deputy Governors and Directors)

Salaries, allowances and benefits 4,730,759 4,435,308

Post-employment benefits 3,381,666 1,606,468

Total 8,112,425 6,041,776

In accordance with Section 15 of the Bank of Tanzania Act, 2006, remuneration of the Governor and
Deputy Governors is determined by the President of the United Republic of Tanzania. The Board
determines remuneration of Directors including Secretary to the Bank. As at 30 June 2019, the
number of key management personnel was 22 (2018: 25).

(b) Directors’ remunerations

During the year ending 30 June 2019, emoluments paid to the members of the Board amounted to
TZS 273.9. Million (2018: TZS 337.5 million). These emoluments include benefits of Non - Executive
Directors. Non-Executive Directors are not entitled to loans and advances.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED)

50 RELATED PARTY DISCLOSURES (CONTINUED)

(c) Government of the United Republic of Tanzania

Transactions entered into with the Government include:

(a) No interest and no Bank charges on Government deposits accounts;
(b) Cost sharing of liquidity management cost arising from issue and redemption of liquidity papers
and Repurchase Agreements in accordance with the memorandum of understanding in force.
(c) Settlement of foreign currency denominated obligations;
(d) Financial accommodation on temporary short falls in Government revenue;
(e) Other duties including agency of the Government as provided under the Bank of Tanzania Act,
2006.

As at the close of business on 30 June 2019, the following balances, which are included in the
statement of financial position in various categories, were outstanding:

30.06.2019 30.06.2018
TZS ‘000 TZS ‘000

Due from Governments of Tanzania (Note 22,23 and 33) 1,491,251,650 1,943,822,268
IMF funds on-lent to the Government (Note 19) 1,266,185,402 1,268,292,685
Deposits - Revolutionary Government of Zanzibar (Note 33) 3,215,378 36,823,776
Investments in Government Securities (Note 22) 1,257,650,150 1,361,728,291
Structured Financing Facility (Note 34) 85,411,151 85,559,712
Export Credit Guarantee Fund (Note 34) 192,442 1,191,803
Small and Medium Enterprises Guarantee Fund (Note 34) 271,173 403,159

The above Schemes are administered by the Bank on behalf of the Government of the United Republic
of Tanzania. Funds are deposited with the Bank and no interest is paid on these balances.

The Governments of Republic of Tanzania (URT) and Revolutionary Government of Zanzibar (RGZ)
deposits are governments funds held by the Bank as Governments’ bank.

Deposit Insurance Fund Board

The Bank has a close working relationship with the Deposit Insurance Board, an entity incorporated
under the Banking and Financial Institution Act, 1991 (as amended 2006). The Bank provides it with
staff, subvention and office accommodation.

During the year, the Bank contribution to the Deposit Insurance Board amounting to TZS 305.4 million
(2018: TZS 238.4 million). The balance outstanding from the Fund included under Deposit Others as
at 30 June 2019 was TZS 4,219.0 million (2018: TZS 6,105.4 million).

51 EVENT AFTER THE REPORTING DATE

There was no event after reporting period that had material impact to the financial statements.

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PART V

CALENDAR OF IMPORTANT MONETARY AND

FINANCIAL EVENTS

JUNE 2011 TO JUNE 2019

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June 2019: The Foreign Exchange (Bureau de August 2018: Pursuant to section 56(1)(g)(iii) of the
Change) Regulations, 2019 were published in the Banking and Financial Institutions Act, 2006, the
Government Notice No. 450 and become effective Bank of Tanzania took over the administration of
on 7th June 2019. For that reason, the Foreign Bank M Tanzania Plc (Bank M) effective from 2nd
exchange (Bureau de Change) Regulations, 2015 August 2018, following determination that Bank
were revoked. M has critical liquidity problems and is unable to
meet its maturing obligations. Accordingly, the
March 2019: The Bank introduced the interbank Bank of Tanzania appointed a Statutory Manager
cash market electronic trading platform, which to manage the affairs of Bank M and suspended
went live on 1st March 2019. its Board of Directors and Management.

January 2019: The Bank of Tanzania officially May 2018: Pursuant to the provision of Section
revoked the license of Bank M Tanzania Plc (Bank 30(1) (a) of the Banking and Financial Institutions
M) and transferred its assets and liabilities to Act, 2006, the Bank of Tanzania authorized the
Azania Bank Limited effective from 15th January merger of Twiga Bancorp Limited and TPB Bank
2019. Plc effective from 17th May 2018. The merger
resulted into one bank, under the name “TPB
November 2018: The Bank of Tanzania issued Bank Plc”.
a banking business licence to China Dasheng
March 2018: To improve functioning of the
Bank Limited, which allows the bank to carry out
financial market, the Bank extend eligible collateral
banking business in Tanzania as a commercial
to accommodate government securities across all
bank. China Dasheng Bank Limited commenced
maturity spectrum.
operations on 26th November 2018.
January 2018: A banking license was issued to
November 2018: On 16th November 2018, Guaranty Trust Bank (Tanzania) Limited to carry
the National Assembly of Tanzania enacted a out banking business in Tanzania as a commercial
Microfinance Act 2018, in order to operationalize bank.
the National Microfinance Policy 2017.
January 2018: The Bank of Tanzania revoked
September 2018: On 21st September 2018, the licenses of Covenant Bank for Women (T) Limited,
Bank of Tanzania and Bank of Zambia signed Efatha Bank Limited, Njombe Community Bank
a Memorandum of Understanding (MOU) on Limited, Kagera Farmers’ Cooperative Bank
currency convertibility and repatriation to help with Limited and Meru Community Bank Limited due
the smooth flow of currency and trade between to undercapitalization, effective from 4th January,
the two countries. 2018.

December 2017: On 21st December 2017, Hon.

August 2018: The Bank of Tanzania revised
Kassim Majaliwa Majaliwa, Prime Minister of the
downwards the discount rate to 7.0 percent from
United Republic of Tanzania, launched the second
the prevailing rate of 9.0 percent effective from
National Financial Inclusion Framework (NFIF
27th August 2018
2018- 2022).

August 2018: Pursuant to the provision of section

October 2017: H.E. Dr. John Pombe Magufuli,
30(1)(a) of the Banking and Financial Institutions
President of the United Republic of Tanzania
Act, 2006, the Bank of Tanzania authorized the
appointed Prof. Florens D.A.M. Luoga as
merger of Tanzania Women’s Bank Plc (TWB) and
Governor of the Bank of Tanzania effective from
TPB effective from 3rd August 2018. The new bank
8th January 2018 replacing Prof. Benno J. Ndulu
will retain the name “TPB Bank Plc”.
after completion of term of office.

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October 2017: The National Microfinance March 2017: The Bank reduced the discount rate
Policy 2017 was launched to create an enabling from 16.0 percent to 12.0 percent effective from
environment that promotes development of March 6, 2017 in order to increase liquidity to
appropriate and innovative microfinance products banks.
and services to meet the real need of the low
income population. January 2017: The Bank adopted reserve
averaging framework, which allow banks to use
August 2017: The Bank reduced the discount part of the SMR balances during the maintenance
rate from 12.0 percent to 9.0 percent effective period to meet liquidity needs.
from August 7, 2017 in order to increase liquidity
October 2016: On 28th October 2016, the Bank of
to banks to stimulate growth of credit to private
Tanzania put Twiga Bancorp Ltd. in receivership
sector.
for lack of adequate capital.
July 2017: Central Depository Systems of Bank
June 2016: The Bank marked its 50th Anniversary,
of Tanzania and Dar es Salaam Stock Exchange
during which a charity walk to raise fund for
were interlinked in to improve functioning of the
purchasing desks for primary and secondary
financial market.
schools was organized. Other events included
launching of books and a symposium on “Beyond
June 2017: The Foreign Exchange (Bureau de
Aid and Non-Concessional Loans: New Ways of
Change) (Amendment) Regulations, 2017 were
Financing Development in Africa”.
gazette and became effective on 2nd June, 2017.
January 2016: H.E. Dr. John Pombe Magufuli,
May 2017: H.E. Dr. John Pombe Magufuli,
President of the United Republic of Tanzania
President of the United Republic of Tanzania
appointed Mr. Julian B. Raphael as Deputy
appointed Dr. Yamungu Kayandabila as Deputy
Governor effective from 26th January, 2016. He
Governor, Economic and Financial Policies,
replaced Mr. Juma Reli after completion of his
and Dr. Bernard Kibesse as Deputy Governor,
term in office.
Financial Stability and Deepening, with effect from
31st May, 2017. They replaced Dr. Natu El-Maamry January 2016: The National Bureau of Statistics
Mwamba and Mr. Lila H. Mkila, respectively, after released rebased National Consumer Price
completion of terms of office. Indices based on December 2015 prices in which,
the weight of food and non-alcoholic beverages
May 2017: On 10th May 2017 the Bank of Tanzania decreased to 38.5 percent from 47.8 percent
revoked license of Mbinga Community Bank due of the total consumer basket. This was the 6th
to undercapitalization and insolvency. revision after that of 1966, 1976, 1992, 2001, and
2010.
May 2017: On 5th May 2017, the Bank of Tanzania
revoked the business license of FBME bank and
June 2015: The Bank of Tanzania broadened
placed it under liquidation following a court ruling
maturity profile of eligible government securities
in the US that suspend the bank from accessing
that can be pledged by banks as collateral in
the US financial system due to money laundering
accessing standby loan facilities to include
charges.
securities that mature within 91 days to 180 days
from the date of acquisition.
April 2017: The Bank lowered the statutory
minimum reserve requirement on private sector
May 2015, The Bank of Tanzania introduced a
deposits to 8.0 percent from 10.0 percent, in order
Bureau de Change System to monitor transactions
to increase liquidity to banks and thereby facilitate
in real time as well as accommodate money
provision of credit to the private sector.
remittance line of business.

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May 2015: The Bank of Tanzania revised the May 2014: Further liberalization of Capital Account
statutory minimum reserve rate charged on private within the EAC region, 2nd May, 2014.
deposit liabilities with banks and borrowings from
the general public from 8 percent to 10 percent. March 2014: The launch of the East African
Community Payment and Settlement Systems
May 2015: Banks’ prudential limit on foreign Integration Project (EAC-PSSIP), 12th March, 2014
exchange net open position was reduced from 7.5 (Arusha).
percent to 5.5 percent of core capital.
November 2013: The signing of the East African
April 2015: Complaints Resolution Desk was Monetary Union Protocol by the EAC Heads of
established at the Bank of Tanzania to handle State, 30th November, 2013.
unresolved disputes between banking institutions
and their clients. March 2013: The Deputy Minister for Finance,
Janet Mbene (MP) launched the Tanzania Financial
April 2015: The National Payment System Bill was Stability Forum (TFSF) on 11th March, 2013.
assented to an Act by the President of the United
Republic of Tanzania. January 2013: The Bank of Tanzania issued
guidelines on Agency Banking. The guidelines
April 2015: Tanzania Automated Clearing House became effective on 1st February, 2013.
became operational.
November 2012: H.E. Dr. Jakaya Mrisho Kikwete,
March 2015: Capital adequacy ratios of banks President of the United Republic of Tanzania, re-
were increased from 10 percent to 12.5 percent of appointed Prof. Benno J. Ndulu to serve in the
core capital and from 12 percent to 14.5 percent office for the second term as the Governor of the
of total capital. Bank of Tanzania effective from 8th January, 2013.

February 2015: Connectivity between Tanzania November 2012: The President of the United
Inter-Bank Settlement System (TISS) and Dar Republic of Tanzania, His Excellency, Dr. Jakaya
es Salaam Stock Exchange (DSE) became Mrisho Kikwete, launched the Mwalimu Nyerere
operational. Memorial Scholarship Fund.
September 2012: The Bank launched the Credit
December 2014: Statutory minimum reserve ratio Reference Databank.
on private sector deposits was reduced from 10
percent to 8 percent August 2012: The Bank introduced an online
June 2014: Ratification of the East African bidding system for Government securities
Community (EAC) Monetary Union Protocol, 25th auctions (GSS).
June, 2014.
June 2011: H.E. Dr. Jakaya Mrisho Kikwete,
June 2014: Ratification of SADC Finance and President of the United Republic of Tanzania,
Investment Protocol, 6th June, 2014. appointed Dr. Natu El-Maamry Mwamba as
Deputy Governor with effect from 13th June, 2011
May 2014: Signing of the Memorandum of to replaced Dr. Enos Bukuku, who was appointed
Understanding amongst EAC Central Banks on as Deputy Secretary General of the East African
currency convertibility and repatriation, 16th May, Community.
2014.

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PART VI

STATISTICAL TABLES

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A1.0 OUTPUT AND PRICES STATISTICS, TANZANIA MAINLAND

A1.1 Gross Domestic Product (GDP) by Activity at Current Prices

A1.2 Gross Domestic Product (GDP), by Activity, Percentage Share in Total GDP at Current Prices
A1.3 Gross Domestic Product (GDP), by Activity at Constant 2015 Prices
A1.4 Gross Domestic Product (GDP), by Activity, Percentage Growth Rates at Constant 2015 Prices
A1.5 Production of Major Agricultural Crops
A1.6 Agricultural Production Indices
A1.7 Production of Selected Industrial Products
A1.8 Industrial Production Indices
A1.9 Mineral Recoveries
A1.10 (i) National Consumer Prices Index (Urban and Rural) – Main Groups
A1.10 (ii) National Consumer Prices Index (Urban and Rural) – Other Selected Groups
A1.10 (iii) National Consumer Price Index (Urban and Rural), Twelve Months Percentage Change – Main
Groups
A1.10 (iv) National Consumer Price Index (Urban and Rural), Twelve Months Percentage
Change – Other Selected Groups

A2.0 UNITED REPUBLIC OF TANZANIA GOVERNMENT FINANCE STATISTICS

A2.1 Central Government Operations

A2.2 Treasury Bills Holding by Investor Category
A2.3 Central Government Stocks, Bonds and Notes by Holders

A3.0 MONETARY STATISTICS

A3.1 Depository Corporations Survey

A3.2 Bank of Tanzania Assets
A3.3 Bank of Tanzania Liabilities
A3.4 Tanzania Notes in Circulation
A3.5 Tanzania Coins in Circulation
A3.6 Commercial Banks Assets
A3.7 Commercial Banks Liabilities
A3.8 Commercial Banks Domestic Assets
A3.9 Commercial Banks Lending and Holding of Securities
A3.10 Commercial Banks Domestic Lending by Economic Activity
A3.11 Commercial Banks Deposits
A3.12 Interest Rate Structure

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A4.0 BALANCE OF PAYMENTS AND FOREIGN TRADE STATISTICS

A4.1 Balance of Payments in USD

A4.2 Balance of Payments in TZS
A4.3 Exports by Type of Commodity in USD
A4.4 Exports by Type of Commodity in TZS
A4.5 Imports (f.o.b) by Major Commodity Groups in USD
A4.6 Imports (f.o.b) by Major Commodity Groups in TZS
A4.7 Imports (c.i.f) by Major Commodity Groups
A4.8 Exports by Country of Destination
A4.9 Imports (c.i.f) by Country of Origin
A4.10 Tanzania Exports to COMESA Countries
A4.11 Tanzania Imports from COMESA Countries
A4.12 Trade with SADC Member States
A4.13 Tanzania’s Shares of Trade with SADC Member States
A4.14 Services, Income and Transfers

A5.0 NATIONAL DEBT STATISTICS

A5.1 Debt Developments

A6.0 OUTPUT, PRICES AND GOVERNMENT FINANCE STATISTICS, ZANZIBAR

A6.1 Gross Domestic Product by Activity at Current Prices

A6.2 Gross Domestic Product by Activity at Current Prices, Percentage Share in Total GDP
A6.3 Gross Domestic Product by Activity at 2015 Constant Prices
A6.4 Gross Domestic Product by Activity at 2015 Constant Prices, Percentage Annual Growth Rates
A6.5 Production of Major Export Crops
A6.6 Production of Selected Commodities
A6.7 Consumer Price Index
A6.8 Consumer Price Index, Twelve Months Percentage Change
A6.9 Government Operations

A7.0 INTERNATIONAL ECONOMICS AND FINANCIAL STATISTICS

A7.1 Economic Performance in G7 Countries and the Euro Area

A7.2 World Market Prices of Selected Commodities

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A1.0 Output and Prices Statistics, Tanzania Mainland

Table A1.1: Gross Domestic Product by Activity at Current Prices
Millions of TZS

2012 2013 2014 2015 2016 2017 2018P

Agriculture, hunting and forestry 16,546,181.4 19,551,225.2 21,313,803.1 25,234,560.2 29,739,110.8 34,154,593.8 36,539,300.3

Crops 8,797,362.1 10,500,527.6 11,562,090.0 13,279,392.3 16,474,729.4 19,703,004.0 20,969,477.3

Livestock 4,633,266.0 5,579,311.9 5,585,210.6 7,158,456.5 8,205,006.7 8,857,939.0 9,850,934.2

Forestry and hunting 1,736,757.2 2,069,113.2 2,477,897.1 2,920,424.8 3,094,767.2 3,310,076.0 3,459,581.4

Fishing 1,353,297.1 1,375,789.5 1,658,604.9 1,843,401.0 1,929,746.8 2,245,558.1 2,218,730.9

Agriculture support services 25,498.9 26,483.1 30,000.5 32,885.5 34,860.7 38,016.7 40,576.5

Industry and construction 15,828,627.0 18,570,322.0 20,767,733.6 23,103,647.3 26,937,139.3 29,735,584.4 34,732,006.8

Mining and quarrying 3,071,557.9 3,125,480.4 3,097,933.4 4,055,619.4 5,299,362.4 5,206,217.1 6,573,058.9

Manufacturing 5,881,780.4 6,648,876.2 7,533,519.0 7,411,671.8 8,467,126.3 9,102,281.7 10,418,294.7

Electricity supply 522,828.8 550,300.1 818,692.8 798,801.2 472,868.3 413,350.5 348,526.7

Water supply, sewerage, waste management 279,325.8 324,028.0 371,581.1 390,758.1 433,132.0 519,909.3 566,562.2

Construction 6,073,134.1 7,921,637.3 8,946,007.4 10,446,796.8 12,264,650.4 14,493,825.8 16,825,564.4

Services 25,308,527.7 29,384,671.4 34,111,643.5 38,146,528.9 42,747,407.4 45,066,596.0 47,923,307.8

Wholesale and retail trade; and repairs 6,448,378.3 7,063,672.7 8,045,701.6 8,747,862.1 9,861,677.8 10,843,498.6 11,792,071.8

Transport and storage 3,747,784.5 5,246,332.6 6,167,365.6 6,929,894.9 7,549,483.6 7,897,993.1 8,381,276.3

Hotels and restaurants 1,253,970.0 1,317,190.7 1,330,370.9 1,421,916.1 1,523,035.2 1,602,543.2 1,653,791.9

Information and communication 1,282,255.1 1,433,178.7 1,598,596.9 1,681,098.0 1,739,555.8 1,829,360.1 1,948,115.7

Financial and insurance activities 2,561,996.6 2,541,197.7 3,614,990.5 4,189,021.5 5,268,866.1 4,789,631.8 4,823,649.5

Real estate 2,308,220.7 2,551,028.9 2,721,060.8 2,949,597.6 3,162,290.5 3,334,170.7 3,553,629.7

Professional, scientific and technical activities 282,743.8 353,037.8 433,939.2 518,122.7 617,914.3 726,706.5 817,441.6

Administrative and support service activities 1,243,364.7 1,522,883.6 1,914,455.6 2,183,917.0 2,661,977.9 3,027,383.8 3,306,553.6

Public administration and defence 2,882,065.4 3,615,291.7 3,973,787.5 4,548,604.4 4,846,491.0 4,986,287.4 5,124,667.4

Education 1,498,867.7 1,728,375.7 2,027,224.7 2,413,305.9 2,673,289.1 2,864,290.0 3,081,718.3

Human health and social work activities 1,011,197.2 1,113,563.3 1,233,076.8 1,419,089.9 1,540,484.1 1,681,353.3 1,812,292.4

Arts, entertainment and recreation 174,357.7 194,938.3 223,468.1 248,510.1 285,625.6 322,352.9 374,923.9

Other service activities 474,340.1 555,957.4 661,939.3 717,898.1 831,215.7 959,152.4 1,037,611.8

Activities of households as employers 138,986.0 148,022.3 165,666.0 177,690.7 185,500.8 201,872.3 215,563.8

All economic activities 57,683,336.0 67,506,218.6 76,193,180.2 86,484,736.3 99,423,657.5 108,956,774.2 119,194,614.9

Taxes on products 4,635,323.0 5,470,981.2 6,410,207.6 7,864,579.4 8,938,666.8 9,787,724.2 10,169,738.4

GDP at market prices 62,318,659.0 72,977,199.8 82,603,387.7 94,349,315.7 108,362,324.3 118,744,498.4 129,364,353.3

Population 43.7 45.0 46.4 47.9 49.5 51.0 52.6

Per capita nominal GDP 1,427,551.7 1,621,445.2 1,778,839.6 1,968,965.2 2,191,190.2 2,327,395.4 2,458,495.6

Source: National Bureau of Statistics

Note: p denotes provisional data

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A1.0 Output and Prices Statistics, Tanzania Mainland

Table A1.2: Gross Domestic Product (GDP) by Activity, Percentage Share in Total GDP at Current
Prices
Percent
2012 2013 2014 2015 2016 2017 2018P
Agriculture, Hunting and Forestry 26.6 26.8 25.8 26.7 27.4 28.8 28.2
Crops 14.1 14.4 14.0 14.1 15.2 16.6 16.2
Livestock 7.4 7.6 6.8 7.6 7.6 7.5 7.6
Forestry and hunting 2.8 2.8 3.0 3.1 2.9 2.8 2.7
Fishing 2.2 1.9 2.0 2.0 1.8 1.9 1.7
Agriculture support services 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Industry and construction 25.4 25.4 25.1 24.5 24.9 25.0 26.8
Mining and quarrying 4.9 4.3 3.8 4.3 4.9 4.4 5.1
Manufacturing 9.4 9.1 9.1 7.9 7.8 7.7 8.1
Electricity supply 0.8 0.8 1.0 0.8 0.4 0.3 0.3
Water supply, sewerage, waste management 0.4 0.4 0.4 0.4 0.4 0.4 0.4
Construction 9.7 10.9 10.8 11.1 11.3 12.2 13.0
Services 40.6 40.3 41.3 40.4 39.4 38.0 37.0
Wholesale and retail trade; repairs 10.3 9.7 9.7 9.3 9.1 9.1 9.1
Transport and storage 6.0 7.2 7.5 7.3 7.0 6.7 6.5
Hotels and restaurants 2.0 1.8 1.6 1.5 1.4 1.3 1.3
Information and communication 2.1 2.0 1.9 1.8 1.6 1.5 1.5
Financial and insurance activities 4.1 3.5 4.4 4.4 4.9 4.0 3.7
Real estate 3.7 3.5 3.3 3.1 2.9 2.8 2.7
Professional, scientific and technical activities 0.5 0.5 0.5 0.5 0.6 0.6 0.6
Administrative and support service activities 2.0 2.1 2.3 2.3 2.5 2.5 2.6
Public administration and defence 4.6 5.0 4.8 4.8 4.5 4.2 4.0
Education 2.4 2.4 2.5 2.6 2.5 2.4 2.4
Human health and social work activities 1.6 1.5 1.5 1.5 1.4 1.4 1.4
Arts, entertainment and recreation 0.3 0.3 0.3 0.3 0.3 0.3 0.3
Other service activities 0.8 0.8 0.8 0.8 0.8 0.8 0.8
Activities of households as employers 0.2 0.2 0.2 0.2 0.2 0.2 0.2
All economic activities 92.6 92.5 92.2 91.7 91.8 91.8 92.1
Add Taxes on products 7.4 7.5 7.8 8.3 8.2 8.2 7.9
Total GDP at market prices 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: National Bureau of Statistics

Note: p denotes provisional data

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A1.0 Output and Prices Statistics, Tanzania Mainland

Table A1.3: Gross Domestic Product by Activity at Constant 2015 Prices
Millions of TZS
r P
Activity 2012 2013 2014 2015 2016 2017 2018

Agriculture, hunting and forestry 21,807,029.9 22,408,191.6 23,952,076.8 25,234,560.2 26,436,338.3 28,008,976.2 29,482,834.3

Crops 10,806,677.6 11,283,264.3 12,344,014.1 13,279,392.3 13,996,347.7 14,895,621.8 15,638,612.4

Livestock 6,204,979.5 6,503,187.3 6,820,846.0 7,158,456.5 7,506,592.6 7,876,591.6 8,266,048.5

Forestry and hunting 2,578,778.8 2,695,824.7 2,825,341.2 2,920,424.8 3,034,569.4 3,180,379.3 3,334,791.2

Fishing 2,187,669.1 1,896,254.0 1,930,393.7 1,843,401.0 1,864,627.3 2,020,292.5 2,205,459.4

Agriculture support services 28,924.9 29,661.2 31,481.7 32,885.5 34,201.3 36,091.0 37,922.8

Industry and construction 17,987,423.5 19,872,086.0 21,057,206.0 23,103,647.1 25,817,954.9 28,565,774.0 31,235,045.0

Mining and quarrying 3,314,742.2 3,464,720.7 3,687,273.0 4,055,619.4 4,356,708.6 4,588,623.9 4,659,195.2

Manufacturing 6,066,988.8 6,292,514.3 6,919,794.2 7,411,671.6 8,213,364.3 8,889,818.0 9,623,500.7

Electricity supply 669,068.6 723,608.1 815,296.8 798,801.2 869,262.5 877,666.6 928,174.5

Water supply, sewerage, waste management 358,360.7 367,890.2 381,759.7 390,758.1 417,899.1 444,660.1 477,510.2

Construction 7,578,263.1 9,023,352.8 9,253,082.3 10,446,796.8 11,960,720.5 13,765,005.5 15,546,664.4

Services 31,223,623.1 32,808,710.4 35,863,738.7 38,146,528.9 40,549,564.0 42,689,010.6 45,358,029.0

Wholesale and retail trade; and repairs 7,371,411.1 7,682,285.7 8,444,242.9 8,747,862.1 9,260,703.3 9,821,247.6 10,395,782.5

Transport and storage 5,710,465.9 6,050,976.3 6,577,705.7 6,929,894.9 7,324,856.3 7,815,844.6 8,736,560.6

Hotels and restaurants 1,343,923.7 1,356,204.2 1,397,782.4 1,421,916.1 1,480,052.1 1,525,618.5 1,604,390.7

Information and communication 1,266,746.6 1,414,116.3 1,560,063.7 1,681,098.0 1,718,547.6 1,824,470.9 1,989,828.8

Financial and insurance activities 3,444,161.0 3,405,939.9 3,764,112.5 4,189,021.5 4,235,515.3 4,115,392.9 4,094,972.3

Real estate 2,606,439.0 2,714,775.0 2,828,969.9 2,949,597.6 3,077,086.1 3,211,894.9 3,354,517.7

Professional, scientific and technical activities 322,260.1 385,090.4 447,920.8 518,122.7 606,206.7 694,290.6 763,332.1

Administrative and support service activities 1,417,467.5 1,660,994.2 1,976,259.6 2,183,917.0 2,611,497.7 2,892,462.9 3,054,288.2

Public administration and defence 3,623,123.3 3,974,205.6 4,242,164.3 4,548,604.4 4,793,820.0 4,907,113.3 5,058,291.8

Education 1,922,643.0 1,927,632.7 2,186,259.6 2,413,305.9 2,665,336.4 2,859,170.7 3,046,789.4

Human health and social work activities 1,284,593.7 1,245,029.6 1,349,940.7 1,419,089.9 1,497,896.4 1,611,999.2 1,742,444.2

Arts, entertainment and recreation 198,470.0 212,501.8 230,651.7 248,510.1 280,130.6 307,906.8 350,027.3

Other service activities 550,177.0 612,079.0 685,475.1 717,898.1 814,528.8 912,404.3 971,690.0

Activities of households as employers 161,741.2 166,879.6 172,189.8 177,690.7 183,386.7 189,193.2 195,113.5

All economic activities 71,018,076.5 75,088,988.1 80,873,021.5 86,484,736.1 92,803,857.2 99,263,760.8 106,075,908.3

Taxes on products 6,961,770.7 8,179,129.2 8,001,090.0 7,864,579.4 8,024,535.5 8,393,644.1 9,064,285.8

Total GDP at market prices 77,979,847.1 83,268,117.2 88,874,111.5 94,349,315.6 100,828,392.7 107,657,404.9 115,140,194.2

Population 43.7 45.0 46.4 47.9 49.5 51.0 52.6

Per capita real GDP (TZS) 1,786,307.1 1,850,094.1 1,913,877.8 1,968,965.2 2,038,846.9 2,110,088.1 2,188,173.6

Source: National Bureau of Statistics

Note: p denotes provisional data

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Table A1.4: Gross Domestic Product by Activity, Percentage Growth Rates at Constant 2015
Prices
Percent
P
Economic Activity 2013 2014 2015 2016 2017 2018

Agriculture, hunting and forestry 2.8 6.9 5.4 4.8 5.9 5.3
Crops 4.4 9.4 7.6 5.4 6.4 5.0
Livestock 4.8 4.9 4.9 4.9 4.9 4.9
Forestry and hunting 4.5 4.8 3.4 3.9 4.8 4.9
Fishing -13.3 1.8 -4.5 1.2 8.3 9.2
Agriculture support services 2.5 6.1 4.5 4.0 5.5 5.1
Industry and construction 10.5 6.0 9.7 11.7 10.6 9.3
Mining and quarrying 4.5 6.4 10.0 7.4 5.3 1.5
Manufacturing 3.7 10.0 7.1 10.8 8.2 8.3
Electricity supply 8.2 12.7 -2.0 8.8 1.0 5.8
Water supply, sewerage, waste management 2.7 3.8 2.4 6.9 6.4 7.4
Construction 19.1 2.5 12.9 14.5 15.1 12.9
Services 5.1 9.3 6.4 6.3 5.3 6.3
Wholesale and retail trade; and repairs 4.2 9.9 3.6 5.9 6.1 5.8
Transport and storage 6.0 8.7 5.4 5.7 6.7 11.8
Hotels and restaurants 0.9 3.1 1.7 4.1 3.1 5.2
Information and communication 11.6 10.3 7.8 2.2 6.2 9.1
Financial and insurance activities -1.1 10.5 11.3 1.1 -2.8 -0.5
Real estate 4.2 4.2 4.3 4.3 4.4 4.4
Professional, scientific and technical activities 19.5 16.3 15.7 17.0 14.5 9.9
Administrative and support service activities 17.2 19.0 10.5 19.6 10.8 5.6
Public administration and defence 9.7 6.7 7.2 5.4 2.4 3.1
Education 0.3 13.4 10.4 10.4 7.3 6.6
Human health and social work activities -3.1 8.4 5.1 5.6 7.6 8.1
Arts, entertainment and recreation 7.1 8.5 7.7 12.7 9.9 13.7
Other service activities 11.3 12.0 4.7 13.5 12.0 6.5
Activities of households as employers 3.2 3.2 3.2 3.2 3.2 3.1
All economic activities 5.7 7.7 6.9 7.3 7.0 6.9
Taxes on products 17.5 -2.2 -1.7 2.0 4.6 8.0
Total GDP at market prices 6.8 6.7 6.2 6.9 6.8 7.0
Source: National Bureau of Statistics
Note: p denotes provisional data

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Table A1.5: Production of Major Agricultural Crops
'000' Tonnes
r P
2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
Food crops:
Maize 5,288.4 6,734.5 5,902.8 6,148.7 6,680.0 6,273.2 5,817.5
Rice 1,342.1 1,678.1 1,936.9 2,229.1 1,593.0 2,219.6 2,009.2
Wheat 102.5 167.0 72.5 76.4 50.0 56.7 62.4
Pulses 1,871.2 1,697.2 1,745.9 1,958.6 2,317.0 1,823.5 1,407.8
Cash crops:
Coffee 71.2 48.8 42.0 59.6 48.3 48.3 66.6
Seed cotton 357.1 246.0 203.3 149.9 122.4 132.9 222.7
Tea 34.9 34.7 35.7 32.6 27.0 34.0 37.2
Cashewnuts 127.9 130.1 197.9 155.2 264.9 313.8 225.1
Tobacco 74.2 86.3 105.9 87.0 60.7 85.7 55.0
Sisal 34.9 37.8 40.3 41.0 35.6 43.5 32.1
Pyrethrum 6.1 6.6 1.8 1.8 2.4 n.a n.a
Source: Ministry of Agriculture
Note: p denotes provisional data; r, revised data; and n.a, not available

Table A1.6: Agricultural Production Indices

2013/14=100
r P
2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
Food crops:
Maize 78.5 100.0 87.6 91.3 99.2 93.1 86.4
Paddy 80.0 100.0 115.4 132.8 94.9 132.3 119.7
Wheat 61.4 100.0 43.4 45.7 29.9 33.9 37.3
Pulses 110.2 100.0 102.9 115.4 136.5 107.4 82.9
Cash crops:
Coffee 146.0 100.0 86.1 122.3 99.1 99.0 136.6
Cotton 145.2 100.0 82.2 60.9 49.8 54.0 90.5
Tea 100.6 100.0 103.0 94.0 77.7 98.0 107.2
Cashewnuts 98.3 100.0 152.1 119.3 203.6 241.2 173.0
Tobacco 86.0 100.0 122.6 100.8 70.3 99.3 63.7
Sisal 92.2 100.0 106.4 108.3 94.3 115.0 84.9
Pyrethrum 92.4 100.0 27.0 27.0 36.0 na na
Source: Ministry of Agriculture
Note: r denotes revised data; p, provisional data; and n.a, not available

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Table A1.7: Production of Selected Industrial Products

Commodity Unit 2012 2013 2014 2015 2016 2017 2018

P

Biscuits and pasta Tonnes 16,119.0 17,440.0 15,964.0 15,274.0 15,551.0 16,451.0 16,911.0
Wheat flour Tonnes 443,731.0 516,778.0 529,797.0 534,637.0 512,068.0 606,432.0 712,967.0
Sugar, refined '000' Tonnes 271.1 241.3 270.1 252.9 286.7 320.3 315.9
Konyagi '000' Lts 16,774.0 20,680.0 31,474.0 29,489.0 28,754.0 22,823.0 26,744.0
Beer '000' Lts 338,650.0 374,238.0 379,913.0 391,742.0 393,560.0 396,864.0 477,578.0
Chibuku '000' Lts 22,028.0 19,935.0 18,501.0 23,028.0 26,513.0 22,162.0 20,819.0
Cigarattes Mill Pcs 7,558.0 7,710.0 8,028.0 7,837.0 8,091.0 7,412.0 7,921.0
Textiles '000' Sq. Mt. 92,585.0 105,525.0 141,358.0 98,642.0 95,924.0 52,052.0 85,982.0
Sisal ropes and twines Tonnes 7,754.0 6,908.0 7,871.0 8,851.0 9,131.0 8,188.0 8,116.0
Fishnet and products Tonnes 295.0 297.0 279.0 311.0 256.0 196.0 228.0
Plywood Cubic Mt. 776.0 1,043.0 1,038.0 1,021.0 788.0 993.0 1,023.0
Pyrethrum extract Tonnes 73.0 113.0 199.0 118.0 126.0 134.0 139.0
Paints '000' Lts 35,344.0 36,623.0 38,308.0 35,930.0 36,343.0 40,146.0 48,025.0
Cement '000' Tonnes 2,581.4 2,345.6 2,809.1 3,134.9 4,071.4 4,199.9 4,509.1
Rolled steel Tonnes 133,229.0 121,362.0 129,555.0 142,963.0 154,079.0 183,337.0 224,402.0
Iron sheets Tonnes 81,427.0 70,831.0 69,825.0 91,385.0 91,109.0 84,541.0 81,390.0
Aluminium sheets/circles Tonnes 37.0 54.0 27.0 32.0 0.0 0.0 0.0
Dry cells '000' Pcs 146,100.0 75,000.0 93,000.0 87,000.0 69,000.0 122,000.0 255,000.0
Source: National Bureau of Statistics
Note: p denotes provisional data

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Table A1.8: Industrial Production Indices

1985=100
r P
Commodity 2012 2013 2014 2015 2016 2017 2018

Biscuits and pasta 1,629.8 1,763.4 1,614.2 1,544.4 1,572.4 1,663.4 1,709.9
Wheat flour 1,140.4 1,328.1 1,361.6 1,374.0 1,316.0 1,558.6 1,832.3
Sugar, refined 242.0 215.5 241.1 225.8 256.0 286.0 282.1
Konyagi 1,743.7 2,149.7 3,271.7 3,065.4 2,989.0 2,372.5 2,780.0
Beer 447.0 494.0 501.5 517.1 519.5 523.8 630.4
Chibuku 201.5 182.4 169.3 210.7 242.6 202.8 190.5
Cigarattes 283.5 289.2 301.1 294.0 303.5 278.0 297.1
Textiles 159.4 181.7 243.4 169.9 165.2 89.6 148.1
Sisal ropes and twines 53.5 47.6 54.3 61.0 63.0 56.5 56.0
Fishnet and products 307.3 309.4 290.6 324.0 266.7 204.2 237.5
Plywood 48.8 65.6 65.3 64.3 49.6 62.5 64.4
Pyrethrum extract 187.2 289.7 510.3 302.6 323.1 343.6 356.4
Paints 2,591.2 2,685.0 2,808.5 2,634.2 2,664.4 2,943.3 3,520.9
Cement 686.5 623.8 747.1 833.8 1,082.8 1,168.9 1,199.2
Rolled steel 1,179.0 1,074.0 1,146.5 1,265.2 1,363.5 1,491.4 1,985.9
Iron Sheets 375.8 326.9 322.2 421.7 420.4 390.1 375.6
Aluminium sheets/circles 1.5 2.2 1.1 1.3 0.0 0.0 0.0
Dry cells 331.3 170.1 210.9 197.3 156.5 276.6 578.2
Source: National Bureau of Statistics and the Bank of Tanzania computations
Notes: p denotes provisional data; and r, revised data

Table A1.9: Mineral Recoveries

r P
Item Unit 2012 2013 2014 2015 2016 2017 2018

Diamond '000' Carats 127.2 179.6 252.9 216.5 239.9 304.5 381.3
Gold Kilograms 39,012.0 43,389.7 40,481.2 46,008.3 45,155.4 43,489.9 39,304.0
Gemstone Tonnes 1,702.2 2,649.5 3,069.2 1,878.4 2,541.0 1,138.0 284.3
Salt '000' Tonnes 34.0 34.0 54.8 168.9 178.2 124.5 36.6
Gypsum '000' Tonnes 91.6 220.5 200.2 254.8 213.7 123.6 241.3
Limestone '000' Tonnes 1,346.0 2,759.1 1,116.8 4,443.6 4,170.1 3,300.9 2,944.0
Pozzolana Tonnes 91,221.0 61,004.0 68,924.7 342,627.6 230,045.5 104,085.1 91,645.0
Coal '000' Tonnes 78,672.0 84,772.0 246,127.7 257,321.0 276,030.2 558,553.1 627,652.0
Tanzanite Kilograms 32,212.0 24,804.8 18,463.7 6,370.4 30,875.2 21,581.5 n.a
Phosphate Tonnes 19,984.1 1,023,020.0 738,000.0 222,800.0 23,658.0 1,351.0 n.a
Copper '000' Pounds 12,426.0 12,654.0 14,027.0 14,252.3 16,247.2 6,058.4 n.a
Source: Ministry of Minerals
Note: p denotes provisional data; r, revised data; and n.a, not available

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 A1.0 Output and Prices Statistics, Tanzania Mainland

Table A1.10(i): National Consumer Price Index (Urban and Rural ) - Main Groups
B a s e: S ep 2010 = 100

F ood and non-alcoholic F urnis hing, hous ing

beverages (exclude Hous ing, water, C lothing equipment and routine Mis cellaneous Alcohol and
food cons umed at electricity, gas and maintanance of the R es taurants goods and tobacco and R ecreation
P eriod T otal index res taurants ) T rans port and other fuel footwear hous e and hotels s ervices narcotics C ommunication E ducation and culture Health

O ld weights (%) 100 47.8 9.5 9.2 6.7 6.7 6.4 4.5 3.3 2.1 1.7 1.3 0.9

2013 140.8 153.0 121.9 152.6 129.0 127.2 133.7 120.9 136.4 96.4 113.2 112.6 108.1

2014 149.5 164.4 126.6 168.9 132.9 129.6 137.3 128.2 144.4 97.0 119.1 113.4 112.0

2015 157.8 178.7 125.8 171.6 138.4 131.6 143.6 132.0 149.6 97.3 122.7 115.3 115.4

Base: Dec 2015 = 100

New weights (%) 100.0 38.5 12.5 11.6 8.3 6.3 4.2 3.1 3.7 5.6 1.5 1.6 2.9

2015 97.9 96.6 98.6 100.6 98.1 98.0 98.8 98.2 99.0 99.6 99.5 98.2 97.6

2016 102.9 103.8 99.5 107.3 102.2 101.7 103.1 101.7 103.2 99.1 102.3 101.1 103.4

2017 108.4 113.3 99.9 115.4 105.8 104.7 104.4 105.0 106.6 98.2 103.2 102.3 106.0

2018 112.2 116.6 102.5 129.2 108.9 107.4 105.7 106.7 108.4 96.6 105.8 102.8 107.4

2018-Jan 110.1 115.5 100.6 119.1 107.1 105.7 105.0 105.7 107.9 98.1 105.3 103.1 107.0

207
F eb 111.3 117.2 101.4 122.3 107.8 105.9 105.3 105.7 107.9 98.2 105.5 103.1 107.0

Mar 112.7 119.6 101.5 125.3 107.9 106.6 105.3 105.7 107.9 98.2 105.5 103.1 107.1

Apr 113.2 119.9 102.4 127.3 108.0 106.9 105.3 106.4 108.0 98.2 105.5 103.2 107.1

May 113.2 119.1 102.0 130.4 108.2 107.2 105.4 106.8 107.9 98.2 105.5 102.8 107.3

Jun 112.8 119.1 101.3 128.5 108.7 107.3 105.2 107.0 107.0 95.5 105.8 102.5 107.5

Jul 112.4 117.6 102.0 129.1 109.1 107.6 105.4 107.0 107.6 95.5 106.0 102.5 107.1

Aug 112.0 115.3 102.7 131.2 109.3 107.9 105.5 106.9 108.4 95.5 106.0 102.7 108.0
Bank of Tanzania Annual Report 2018/19

S ep 112.1 114.6 102.4 133.9 109.7 107.9 106.3 107.0 109.2 95.6 106.0 102.9 107.5

O ct 111.8 113.5 102.9 134.8 110.0 107.9 106.3 107.0 109.3 95.5 106.0 102.3 107.6

Nov 112.2 113.4 105.2 135.1 110.0 108.1 106.5 107.2 109.3 95.5 106.0 102.6 107.6

Dec 112.8 114.7 105.5 133.4 110.6 109.5 107.3 108.1 110.2 95.6 106.0 102.9 107.9

2019-Jan 113.4 116.3 104.6 133.0 111.2 109.8 107.7 108.3 110.3 95.7 107.4 103.2 108.1

F eb 114.6 117.8 104.7 137.4 111.4 110.2 109.0 108.5 110.7 96.2 107.5 103.3 108.6

Mar 116.2 119.8 105.7 141.6 111.6 111.1 110.4 109.0 111.4 97.1 107.5 103.4 109.0

Apr 116.8 121.0 105.9 141.8 111.9 111.3 110.5 109.3 111.5 97.1 107.7 103.8 109.5

May 117.2 121.7 106.2 141.9 112.2 111.8 110.5 109.6 111.5 97.1 107.7 106.0 109.5

Jun 117.0 121.9 106.2 140.0 112.0 111.7 110.3 109.5 111.5 96.5 107.7 106.0 109.5

Source: National Bureau of Statistics

 Bank of Tanzania Annual Report 2018/19

A1.0 Output and Prices Statistics, Tanzania Mainland

Table A1.10 (ii): National Consumer Price Index (Urban and Rural ) - Other Selected Groups
Base: Sep 2010 = 100
Non - food
Food and non alcoholic
beverages (Combining food Total non-food Energy ang fuels (Combining electricity
consumed at home and food (All items less All items less and other fuels for use at home with
Period consumed in restaurants) food) food and energy petrol and diesel)
Old weights (%) 51.0 49.0 43.3 5.7

2013 152.8 128.9 123.0 170.1

2014 163.1 135.2 127.6 190.7
2015 177.2 137.6 130.5 189.0
Base: Dec 2015 = 100

New weights (%) 37.1 62.9 54.3 8.7

2015 96.9 99.2 98.9 101.2
2016 104.2 102.3 101.5 107.6
2017 114.2 105.6 103.5 118.9
2018 118.4 110.1 105.4 139.3

2018-Jan 116.6 107.0 104.1 124.8

F eb 118.3 108.0 104.6 129.4
Mar 120.9 108.7 104.7 133.6
Apr 121.2 109.3 104.9 136.7
May 120.6 110.1 105.2 140.8
Jun 120.5 109.7 105.1 138.1
Jul 118.9 110.1 105.4 139.6
Aug 117.5 110.8 105.7 142.5
S ep 116.8 111.4 105.9 145.4
Oct 115.9 111.6 106.1 146.6
Nov 116.3 112.2 106.5 148.2
Dec 117.6 112.5 107.1 146.4

2019-Jan 119.4 112.5 107.4 144.4

F eb 121.0 113.5 107.8 149.3
Mar 123.3 114.8 108.5 154.4
Apr 124.5 115.1 108.7 154.9
May 125.3 115.3 108.9 155.5
Jun 125.7 114.9 108.7 153.3
Source: National Bureau of Statistics

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 A1.0 Output and Prices Statistics, Tanzania Mainland

Table A1.10 (iii): National Consumer Price Index (Urban and Rural ), Twelve Months Percentage Change - Main Groups
Base: Sep 2010 = 100
Food and non-alcoholic Housing, Furnishing, housing
beverages (Exclude water, Clothing equipment and Miscellaneous Alcohol
food consumed at electricity, gas and routine maintanance Restaurants goods and and Recreation
Period Total index restaurants) Transport and other fuel footwear of the house and hotels services tobacco Communication Education and culture Health

Old weights (%) 100.0 47.8 9.5 9.2 6.7 6.7 6.4 4.5 3.3 2.1 1.7 1.3 0.9

2013 7.9 15.9 10.2 25.1 8.3 6.4 8.2 11.8 20.1 0.4 7.7 2.9 6.4

2014 6.1 7.4 3.9 10.7 3.0 1.9 2.7 6.1 5.9 0.7 5.2 0.7 3.6

2015 5.6 8.7 -0.6 1.6 4.1 1.6 4.6 2.9 3.6 0.3 2.9 1.6 3.0

Base: Dec 2015 = 100

New weights (%) 100.0 38.5 12.5 11.6 8.3 6.3 4.2 3.1 3.7 5.6 1.5 1.6 2.9

2016 5.2 7.5 0.9 6.6 4.2 3.9 4.4 3.6 4.3 -0.5 2.9 2.9 5.9

2017 5.3 9.1 0.5 7.6 3.5 2.9 1.2 3.2 3.3 -0.9 0.9 1.3 2.6

2018 3.5 3.0 2.5 12.0 2.9 2.5 1.3 1.6 1.6 -1.6 2.4 0.5 1.3

2018-Ja n 4.0 6.3 0.3 7.1 2.7 1.8 0.8 2.6 2.6 -1.0 2.5 2.0 1.6
F eb 4.1 5.4 1.6 8.6 3.3 1.6 0.9 2.7 2.3 -0.2 2.5 1.5 1.6

209
Ma r 3.9 4.7 1.4 10.4 3.2 1.9 0.8 1.2 2.0 -0.2 2.4 1.1 1.6
Apr 3.8 3.6 1.8 13.1 2.6 2.0 0.8 0.9 1.7 0.1 2.4 1.2 1.6
Ma y 3.6 2.6 1.9 15.0 2.4 2.3 1.0 1.2 1.3 0.1 2.3 0.7 1.2
Jun 3.4 3.4 1.6 12.0 2.2 2.4 0.7 1.4 0.3 -2.6 2.6 0.5 1.4
Jul 3.3 2.8 2.5 12.3 2.4 2.6 0.8 1.2 0.8 -2.7 2.5 0.4 0.7
Aug 3.3 2.2 3.4 12.3 2.7 3.1 1.1 1.2 1.2 -2.6 2.5 -0.2 1.7

S ep 3.4 2.0 2.8 13.1 3.2 3.0 1.9 1.3 1.9 -2.6 2.5 -0.2 1.3
Bank of Tanzania Annual Report 2018/19

O ct 3.2 1.2 3.0 14.1 3.4 2.8 1.9 1.6 1.9 -2.7 2.4 -1.0 0.8

Nov 3.0 0.4 5.1 13.4 3.3 2.9 1.9 1.7 1.6 -2.7 2.4 -0.7 0.8

Dec 3.3 1.0 5.1 12.1 3.6 4.0 2.7 2.6 2.2 -2.6 2.4 0.1 1.0

2019-Ja n 3.0 0.7 4.0 11.7 3.7 3.9 2.6 2.5 2.2 -2.4 2.0 0.2 1.0

F eb 3.0 0.5 3.3 12.3 3.3 4.1 3.6 2.6 2.5 -2.1 1.8 0.2 1.5
Ma r 3.1 0.1 4.1 13.0 3.4 4.3 4.8 3.1 3.2 -1.2 1.9 0.3 1.8

Apr 3.2 0.9 3.4 11.4 3.6 4.2 4.9 2.7 3.2 -1.1 2.1 0.6 2.2

Ma y 3.5 2.2 4.1 8.8 3.7 4.3 4.9 2.5 3.4 -1.1 2.1 3.2 2.0

Jun 3.7 2.3 4.8 8.9 3.1 4.1 4.8 2.4 4.2 1.0 1.8 3.4 1.8
Source: National Bureau of Statistics
 Bank of Tanzania Annual Report 2018/19

A1.0 Output and Prices Statistics, Tanzania Mainland

Table A1.10 (iv): National Consumer Price Index (Urban and Rural ), Twelve Months Percentage
Change - Other Selected Groups
Base: Sep 2010 = 100

Non-food
Food and non-alcoholic
beverages (Combining food Energy ang fuels (Combining
consumed at home and food Total non-food (All All items less electricity and other fuels for use at
Period consumed in restaurants) items less food) food and energy home with petrol and diesel)
Old weights (%) 51.0 49.0 43.3 5.7

2013 16.3 12.4 9.9 27.7

2014 7.7 4.8 3.7 12.2
2015 8.6 1.8 2.3 -0.9
Base: Dec 2015 = 100

New weights (%) 37.1 62.9 54.3 8.7

2016 7.6 3.1 2.6 6.3
2017 9.6 3.2 2.0 10.5
2018 3.7 4.3 1.9 17.2
2018-Jan 6.7 2.8 1.4 10.4
F eb 5.8 3.3 1.7 12.1
Mar 5.0 3.5 1.6 14.1
Apr 4.0 3.9 1.4 18.4
May 3.2 4.5 1.6 21.2
Jun 3.8 4.0 1.6 16.8
Jul 3.0 4.2 1.6 18.5
Aug 3.2 4.6 2.0 18.7
S ep 3.1 4.8 2.2 18.9
Oct 2.5 5.0 2.3 19.5
Nov 2.0 5.3 2.6 19.2
Dec 2.6 5.4 3.1 17.7

2019-Jan 2.3 5.1 3.1 15.7

F eb 2.3 5.1 3.1 15.4
Mar 2.0 5.7 3.7 15.5
Apr 2.7 5.3 3.6 13.3
May 3.9 4.7 3.5 10.5
Jun 4.3 4.7 3.4 11.0
Source: National Bureau of Statistics

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 Bank of Tanzania Annual Report 2018/19

2.0 United Republic of Tanzania Government Finance Statistics

Table A2.1: Central Government Operations

Millions of TZS
r p
Item 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Total revenue (including LGAs) 7,221,408.6 8,442,611.2 10,182,454.7 10,957,765.3 13,906,993.4 16,639,831.5 17,944,887.0 18,527,293.2
Total revenue - central government 7,025,884.1 8,221,776.3 9,867,226.8 10,597,681.0 13,481,141.2 16,128,113.5 17,403,387.9 17,868,195.0
Tax revenue 6,480,477.8 7,729,985.9 9,294,417.0 9,891,680.3 12,410,950.8 14,055,172.6 15,091,791.4 15,387,287.9
Taxes on imports 2,555,535.8 2,915,214.6 3,535,758.5 3,928,466.7 4,898,987.8 5,092,870.6 5,488,877.4 5,668,220.5
Taxes on local goods 1,336,916.4 1,466,562.2 1,607,135.6 1,744,740.3 1,994,807.5 3,037,847.3 3,430,883.1 3,709,774.4
Income taxes 2,246,783.7 3,019,555.7 3,778,545.7 3,719,916.8 4,599,828.6 4,829,602.6 5,157,105.9 5,072,401.5
Other taxes 341,241.8 328,653.3 372,977.3 498,556.6 917,326.9 1,094,852.1 1,014,925.0 936,891.5
Non- tax revenue 545,406.4 491,790.4 572,809.8 706,000.7 1,070,190.4 2,072,940.9 2,311,596.5 2,480,907.1
LGA own sources 195,524.5 220,835.0 315,227.9 360,084.3 425,852.2 511,718.0 541,499.1 659,098.2
1
Total expenditure 10,764,528.4 12,714,236.4 13,958,161.9 14,603,714.4 17,759,598.0 18,889,969.1 20,468,072.3 22,265,372.0
Recurrent expenditure 6,989,806.6 9,043,323.0 10,032,119.7 10,893,486.1 13,420,045.1 11,617,144.8 12,852,304.0 13,811,190.4
Wages and salaries 2,722,084.2 3,868,713.7 4,537,816.2 5,255,358.8 6,553,257.2 6,367,146.8 6,327,676.8 6,658,458.2
Interest payments 436,317.1 766,747.8 977,082.0 1,261,002.4 1,486,275.7 1,715,429.2 1,990,293.1 2,408,680.1
3
Domestic 345,125.7 589,595.0 742,728.4 917,032.8 1,009,506.3 1,215,582.1 1,317,546.0 1,622,507.9
Foreign 91,191.4 177,152.8 234,353.6 343,969.6 476,769.4 499,847.1 672,747.1 786,172.2
Other goods, services and transfers 3,831,405.4 4,407,861.4 4,517,221.5 4,377,125.0 5,380,512.2 3,534,568.8 4,534,334.2 4,744,052.1
Development expenditure and net lending 3,774,721.7 3,670,913.5 3,926,042.2 3,710,228.2 4,339,552.9 7,272,824.3 7,615,768.3 8,454,181.5
Local 1,872,311.7 2,314,717.9 2,121,211.5 2,264,506.0 2,904,529.7 5,141,450.7 5,397,033.5 6,496,222.3
Foreign 1,902,410.0 1,356,195.6 1,804,830.7 1,445,722.2 1,435,023.2 2,131,373.6 2,218,734.8 1,957,959.3

Overall balance before grants -3,543,119.7 -4,271,625.2 -3,775,707.2 -3,645,949.0 -3,852,604.6 -2,250,137.6 -2,523,185.3 -3,738,078.8

Grants 1,855,096.6 1,378,718.2 1,587,648.6 1,024,132.7 495,356.6 1,092,495.4 930,648.4 461,201.3

Program 720,312.8 537,473.7 514,501.6 382,311.8 0.0 190,303.2 247,285.4 0.0
Project 612,030.8 345,214.7 670,911.5 514,184.4 409,157.2 733,208.3 566,197.5 285,340.0
Basket funds 301,152.2 276,039.0 188,623.3 127,636.6 86,199.3 168,983.8 117,165.4 175,861.3
HIPC relief 0.0 0.0 213,612.2 0.0 0.0 0.0 0.0 0.0
MDRI/MCA (T) 221,601.0 219,990.7 0.0 0.0 0.0 0.0 0.0 0.0
Overall balance after grants -1,688,023.1 -2,892,907.0 -2,188,058.6 -2,621,816.3 -3,357,248.0 -1,157,642.2 -1,592,537.0 -3,276,877.4
Expenditure float -198,538.6 -351,395.3 -610,630.4 -247,661.3 -69,418.3 -59,647.1 -71,767.9 -10,242.6

Adjustments to cash and other items (net) -198,538.6 439,983.1 300,809.8 62,959.4 -1,337.5 -376,841.2 -636,424.9 -941,880.6
Overall balance (cheques cleared) -2,070,124.1 -2,804,319.3 -2,497,879.2 -2,806,518.2 -3,428,003.8 -1,594,130.5 -2,300,729.7 -4,229,000.6

Financing: 2,070,124.1 2,804,319.3 2,497,879.2 2,806,518.2 3,428,003.8 1,594,130.5 2,300,729.7 4,229,000.6

Foreign financing (net) 1,735,260.4 1,734,998.0 2,271,136.6 2,006,741.8 1,128,852.4 1,704,992.6 1,702,082.3 1,191,823.2
Loans 1,815,757.6 1,861,661.1 2,452,356.9 2,233,408.7 1,684,552.0 2,608,423.3 3,009,653.4 2,766,976.2
Program loans 246,849.8 357,480.9 526,157.3 374,704.3 291,381.3 152,482.1 0.0 125,396.0
Development project loans 1,396,695.9 1,317,844.4 1,718,534.5 1,695,527.6 1,231,328.7 2,350,950.1 2,938,575.6 2,597,299.3
o/w: Non- concessional borrowing 801,281.6 1,063,006.0 1,194,515.9 1,054,803.2 453,504.0 1,226,759.8 1,474,281.6 1,144,822.3
Basket support 172,211.8 186,335.8 207,665.0 163,176.8 161,841.9 104,991.1 71,077.8 44,280.9
Amortization -80,497.1 -126,663.1 -181,220.3 -226,666.9 -555,699.6 -903,430.8 -1,307,571.1 -1,575,153.1
3
Domestic (net) 334,863.7 1,069,321.3 226,742.6 799,776.3 2,299,151.4 -110,862.0 598,647.5 3,037,177.5
Bank and non bank financing 334,863.7 1,069,321.3 976,711.8 799,776.3 2,299,151.4 -110,862.0 598,647.5 3,037,177.5
Bank borrowing 71,249.5 667,929.9 955,495.3 487,807.9 1,522,206.6 -1,100,145.0 -343,325.5 2,383,403.3
Non-bank (net of amortization) 263,614.1 401,391.4 21,216.5 311,968.4 776,944.9 989,283.0 941,973.0 653,774.1
Domestic and contingent debt amortization -1,326,851.5 -1,734,534.6 -1,528,152.7 -2,064,756.4 -3,005,788.8 4,615,670.4 4,835,199.3 3,713,606.8
Borrowing/Roll over 1,326,851.5 1,734,534.6 1,528,152.7 2,064,756.4 3,005,788.8 -4,615,670.4 -4,835,199.3 -3,713,606.8
Privatization proceeds 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
On lending to TPDC (Gas pipeline) 0.0 0.0 -749,969.2 0.0 0.0 0.0 0.0 0.0
Source: Ministry of Finance and Planning
1
Notes: Exclude amortization and Expenditure Float, includes Road fund and Retention expenditures
2
Domestic Interest payments and amortization include Cash and Non cash
3
Positive value means financing and a negative value means repayment

r denotes revised data; and p, provisional data

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 Bank of Tanzania Annual Report 2018/19

2.0 United Republic of Tanzania Government Finance Statistics

Table A2.2. Outstanding Treasury Bills by Investor Category

Millions of TZS
of which
Commercial Other banking Other financial Other official
Period Total Bank of Tanzania Banks banks institutions institutions entities Private sector

2013 2,975,906.4 144,455.0 2,163,812.4 2,149,002.4 14,810.0 362,406.1 97,801.4 207,431.6

2014 2,906,466.8 18,000.0 2,296,936.9 2,291,303.3 5,633.7 378,657.2 154,313.3 58,559.4
2015 2,727,771.0 111,487.0 2,022,373.0 1,982,152.6 40,220.4 373,565.0 149,789.5 70,556.5
2016 3,685,581.3 157,183.5 2,286,264.2 2,276,287.9 9,976.3 859,442.2 303,043.6 79,647.8
2017 4,158,959.0 44,904.7 3,124,187.8 3,047,446.4 76,741.4 651,029.9 200,820.7 138,015.9
2018 2,877,070.8 428,611.8 1,600,819.4 1,572,398.3 28,421.1 466,010.4 126,063.3 255,565.9

2018-Jan 4,180,658.2 2,550.0 3,186,047.3 2,711,328.7 474,718.6 630,458.6 197,020.7 164,581.6

Feb 3,579,557.3 3,850.0 2,670,007.2 2,597,523.1 72,484.2 558,199.1 185,246.9 162,254.1
Mar 3,427,195.6 0.0 2,555,176.4 2,480,792.3 74,384.2 568,087.8 159,096.9 144,834.5
Apr 3,343,294.8 22,033.4 2,425,263.4 2,357,227.9 68,035.6 576,541.2 151,096.2 168,360.5
May 3,218,720.7 50,734.1 2,313,282.4 2,260,733.8 52,548.6 457,168.1 156,450.0 241,086.1
Jun 3,244,781.4 125,871.4 2,130,258.1 2,098,031.7 32,226.4 590,394.8 157,781.7 240,475.5
Jul 3,194,657.2 67,857.5 2,147,165.9 2,118,254.8 28,911.1 607,982.3 163,686.4 207,965.1
Aug 3,100,235.2 162,627.4 1,961,496.5 1,929,045.7 32,450.8 569,229.4 158,062.4 248,819.6
Sep 3,114,302.9 192,427.9 1,934,817.6 1,893,784.3 41,033.3 570,882.1 155,527.4 260,647.9
Oct 3,023,428.6 146,358.0 1,890,057.6 1,849,535.4 40,522.2 572,808.1 155,314.2 258,890.7
Nov 2,910,910.5 206,806.5 1,809,307.3 1,776,302.9 33,004.4 475,902.2 157,578.9 261,315.7
Dec 2,877,070.8 428,611.8 1,600,819.4 1,572,398.3 28,421.1 466,010.4 126,063.3 255,565.9

2019-Jan 2,728,325.9 195,190.5 1,618,010.7 1,576,639.6 41,371.1 523,711.0 131,463.3 259,950.4

Feb 3,064,984.5 339,003.8 1,744,992.3 1,700,654.5 44,337.8 548,490.0 174,465.6 258,032.8
Mar 3,060,191.8 374,129.7 1,771,279.0 1,732,796.8 38,482.2 505,705.8 150,873.3 258,204.0
Apr 3,140,310.8 325,868.2 1,909,361.6 1,876,807.1 32,554.4 518,144.3 148,073.3 238,863.5
May 3,276,053.6 249,616.3 2,083,496.8 2,036,792.4 46,704.4 585,359.9 147,153.3 210,427.2
Jun 3,411,346.7 359,626.3 2,044,921.7 1,992,067.2 52,854.4 605,189.0 152,606.8 249,002.9
Source: Bank of Tanzania

Table A2.3: Central Government Stocks, Bonds and Notes by Holders

Millions of TZS

Other
financial
End of Other official
period Bank of Tanzania Banks institutions entities Private sector Others Total

2013 1,444,130.4 1,981,226.0 1,186,148.5 17,010.0 23,375.6 0.0 4,651,890.7

2014 1,441,940.4 2,327,295.4 1,326,981.9 36,383.0 51,056.9 60,000.0 5,243,657.7
2015 1,439,750.4 2,451,612.4 1,688,662.2 49,417.0 64,445.0 101,519.4 5,795,406.5
2016 1,439,750.4 2,731,482.6 2,347,095.0 80,521.7 44,445.0 206,024.2 6,849,318.9
2017 1,334,750.4 3,875,222.4 3,280,296.8 127,504.1 299,509.3 74,879.6 8,992,162.6
2018 1,230,397.7 4,551,076.9 3,739,700.7 183,281.5 414,142.8 75,832.1 10,194,431.7

2018-Mar 1,334,750.4 4,418,469.5 3,415,304.7 164,224.1 333,771.2 74,879.6 9,741,399.6

Jun 1,334,750.4 4,599,830.9 3,564,759.2 192,824.4 350,345.5 74,879.6 10,117,390.1
Sep 1,264,897.7 4,670,870.9 3,644,518.8 195,092.7 374,716.1 75,832.1 10,225,928.3
Dec 1,230,397.7 4,551,076.9 3,739,700.7 183,281.5 414,142.8 75,832.1 10,194,431.7

2019-Mar 1,280,397.7 4,460,996.9 3,871,062.2 186,364.2 449,361.9 55,832.1 10,304,015.0

Jun 1,330,397.7 4,473,666.1 3,973,134.2 186,364.2 501,316.2 113,143.4 10,578,021.7
Source: Bank of Tanzania

212
 A3.0. Monetary Statistics
Table A3.1: Depository Corporations Survey
Millions of TZS

Domestic assets (net) M3, Extended Broad Money

Domestic credit (net) M2, Broad Money Memorandum item:

M1, Narrow Money M0, Base Money

Foreign Claims on Claims on other TOTAL Currency in Foreign

End of assets government domestic Other items sum (2:5) or TOTAL TOTAL circulation Transferable currency of which:
period (net) (net) sectors (net) (net) sum (9:12) sum (9:11) sum (9,10) outside banks deposits Other deposits* deposits sum (9,14) Bank's reserves

1 2 3 4 5 6 7 8 9 10 11 12 13 14

2011 6,273,631.2 1,471,254.6 7,622,317.6 -2,345,881.3 13,021,322.0 9,247,939.4 5,571,986.7 2,235,829.8 3,336,156.9 3,675,952.7 3,773,382.6 4,111,917.1 1,876,087.3

2012 6,396,026.0 2,019,403.0 9,010,380.9 -2,778,705.0 14,647,105.0 10,724,538.0 6,538,563.9 2,414,788.0 4,123,775.9 4,185,974.0 3,922,567.0 4,525,608.9 2,110,820.8

2013 6,576,331.8 2,554,554.3 10,392,663.1 -3,416,780.9 16,106,768.4 11,890,554.2 7,218,118.5 2,763,963.0 4,454,155.6 4,672,435.7 4,216,214.2 5,027,783.6 2,263,820.6

2014 6,551,542.5 3,651,622.2 12,412,296.1 -4,001,309.5 18,614,151.4 13,917,041.5 8,284,155.7 3,244,724.9 5,039,430.8 5,632,885.8 4,697,109.8 5,909,475.3 2,664,750.4

2015 8,244,049.2 4,881,635.3 15,492,728.5 -6,503,097.7 22,115,315.2 15,780,115.4 9,575,698.5 3,678,503.5 5,897,195.1 6,204,416.9 6,335,199.8 6,833,088.2 3,154,584.7
2016 8,186,324.6 4,281,969.3 16,608,885.4 -6,199,313.1 22,877,866.2 16,620,327.3 10,083,812.9 3,608,710.4 6,475,102.5 6,536,514.4 6,257,538.9 6,854,370.1 3,245,659.7

2017 11,596,110.5 3,275,708.7 16,895,440.1 -7,052,934.7 24,714,324.6 18,349,932.9 11,155,309.0 3,831,604.4 7,323,704.5 7,194,623.9 6,364,391.7 6,954,415.2 3,122,810.8
2018 10,629,789.0 4,481,617.2 17,726,752.0 -7,014,704.9 25,823,453.2 19,040,389.4 11,723,679.1 3,866,668.4 7,857,010.7 7,316,710.3 6,783,063.8 6,992,882.1 3,126,213.7
2018-Jan 11,380,766.0 3,989,600.1 16,923,469.3 -7,346,635.5 24,947,199.9 18,541,950.6 11,346,892.0 3,676,320.9 7,670,571.1 7,195,058.6 6,405,249.3 7,169,185.2 3,492,864.3

213
Feb 11,196,188.1 3,675,423.9 16,868,412.2 -6,860,264.0 24,879,760.2 18,179,696.3 10,975,226.3 3,614,139.5 7,361,086.8 7,204,470.0 6,700,063.9 7,143,213.6 3,529,074.1

Mar 10,881,158.6 4,036,955.2 16,814,298.6 -7,255,566.6 24,476,845.8 18,189,807.8 11,126,675.4 3,704,011.8 7,422,663.6 7,063,132.4 6,287,038.0 6,744,869.5 3,040,857.7
Apr 10,750,775.9 4,037,858.9 16,852,799.8 -7,207,658.6 24,433,776.0 18,074,492.9 11,028,348.2 3,620,313.5 7,408,034.7 7,046,144.7 6,359,283.1 6,487,664.4 2,867,350.9

May 11,249,491.4 3,125,232.8 17,264,982.2 -7,116,770.2 24,522,936.2 18,304,657.5 11,110,708.8 3,749,037.3 7,361,671.5 7,193,948.7 6,218,278.8 6,811,874.8 3,062,837.5

Jun 11,236,685.4 3,829,401.6 17,533,343.0 -7,304,890.7 25,294,539.4 18,951,216.5 11,761,952.0 3,926,245.8 7,835,706.2 7,189,264.6 6,343,322.8 7,136,631.1 3,210,385.3

Jul 11,217,356.2 3,740,406.4 17,435,645.8 -7,688,228.1 24,705,180.2 18,265,656.4 11,180,009.2 3,885,101.2 7,294,908.0 7,085,647.2 6,439,523.8 6,680,290.8 2,795,189.6

Aug 11,637,099.4 3,593,179.8 17,582,984.3 -7,770,858.5 25,042,405.0 18,437,420.8 11,353,635.9 3,865,819.2 7,487,816.7 7,083,785.0 6,604,984.2 6,753,213.4 2,887,394.2
Bank of Tanzania Annual Report 2018/19

Sep 11,631,006.3 3,910,734.0 17,569,360.0 -7,835,220.5 25,275,879.8 18,601,435.6 11,536,105.0 3,835,165.8 7,700,939.2 7,065,330.7 6,674,444.2 6,487,309.5 2,652,143.7

Oct 11,509,472.4 3,845,520.8 17,593,671.0 -7,681,199.9 25,267,464.3 18,560,944.8 11,371,675.5 3,756,213.5 7,615,461.9 7,189,269.3 6,706,519.4 6,587,212.3 2,830,998.8

Nov 11,118,545.2 4,507,118.6 17,803,061.9 -7,938,231.0 25,490,494.6 18,892,963.7 11,753,305.6 3,773,603.8 7,979,701.8 7,139,658.0 6,597,531.0 6,789,971.1 3,016,367.3

Dec 10,629,789.0 4,481,617.2 17,726,752.0 -7,014,704.9 25,823,453.2 19,040,389.4 11,723,679.1 3,866,668.4 7,857,010.7 7,316,710.3 6,783,063.8 6,992,882.1 3,126,213.7

2019-Jan 10,140,835.6 4,064,358.0 18,165,034.8 -6,607,109.0 25,763,119.4 18,966,447.0 11,604,121.1 3,709,232.2 7,894,888.9 7,362,325.8 6,796,672.5 6,707,175.9 2,997,943.7

Feb 10,434,390.0 3,825,068.6 18,426,816.4 -6,817,584.5 25,868,690.5 19,277,142.0 11,713,449.1 3,733,888.0 7,979,561.1 7,563,693.0 6,591,548.5 6,840,739.5 3,106,851.5

Mar 10,019,155.0 3,853,565.5 18,436,361.5 -6,606,252.8 25,702,829.2 18,985,498.5 11,594,927.6 3,782,775.6 7,812,152.1 7,390,570.9 6,717,330.7 6,688,376.0 2,905,600.5

Apr 9,409,490.7 4,714,269.2 18,641,540.1 -7,136,245.6 25,629,054.4 19,335,555.5 11,948,276.0 3,772,096.9 8,176,179.1 7,387,279.5 6,293,499.0 6,764,667.3 2,992,570.4

May 8,999,143.7 5,250,297.4 18,811,396.7 -7,115,273.1 25,945,564.8 19,627,211.0 12,197,149.9 3,925,693.6 8,271,456.3 7,430,061.1 6,318,353.8 6,973,944.1 3,048,250.6

Jun 9,626,325.1 6,212,800.8 18,861,062.7 -7,459,398.5 27,240,790.0 21,002,135.2 13,521,724.4 4,120,987.6 9,400,736.9 7,480,410.8 6,238,654.8 7,963,798.7 3,842,811.2
Source: Bank of Tanzania and banks
Note: * include saving and time deposits in national currency
 Bank of Tanzania Annual Report 2018/19

A3.0. Monetary Statistics

Table A3.2: Bank of Tanzania Assets

Millions of TZS

Foreign assets Claims on government Lending Revalua- Premises Items in

End of Foreign Quota in Other to tion and process of Other

period exchange SDRs IMF Advances securities Total banks account equipment collection assets Total

2011 5,492,337.2 375,910.7 476,884.4 188,612.1 1,056,102.5 1,244,714.6 62,668.2 -992,486.9 1,000,841.0 556.5 1,193,211.4 8,854,637.0
2012 5,973,679.6 373,865.6 480,434.1 270,867.3 1,485,742.0 1,756,609.3 68,813.9 -904,076.2 1,015,303.8 556.1 1,111,364.7 9,876,550.9
2013 6,985,289.2 370,712.0 483,524.4 567,029.8 1,486,018.8 2,053,048.6 60,533.2 -820,938.6 1,033,606.2 216.6 1,013,233.3 11,179,224.9
2014 7,216,178.9 335,250.8 496,585.1 791,792.5 1,554,085.2 2,345,877.7 56,033.2 -914,901.0 1,030,945.6 657.5 1,291,340.7 11,857,968.4
2015 8,487,183.5 275,699.5 592,796.0 1,387,903.2 1,613,807.7 3,001,710.9 147,083.2 -1,039,215.7 1,047,333.2 125.3 1,253,597.8 13,766,313.6
2016 9,249,632.7 55,757.0 1,159,672.4 1,368,928.4 1,607,473.0 2,976,401.4 246,297.7 -1,520,586.5 1,210,493.0 0.0 1,722,889.6 15,100,557.4
2017 13,035,413.1 2,938.0 1,260,376.2 875,380.4 1,470,463.8 2,345,844.2 75,242.0 -1,122,935.2 1,276,018.3 17.1 1,334,131.1 18,207,044.9
2018 11,319,097.1 60,983.9 1,262,088.6 2,038,174.3 1,394,796.9 3,432,971.2 465,578.5 -1,219,882.6 1,317,859.0 0.0 1,411,649.1 18,050,344.8

2018-Jan 12,885,150.8 3,021.2 1,296,073.9 1,221,260.5 1,459,223.3 2,680,483.8 55,415.0 -1,122,998.6 1,276,398.4 0.0 1,343,378.8 18,416,923.2
Feb 12,751,590.1 31,228.0 1,296,000.3 1,400,148.9 1,479,159.2 2,879,308.1 53,215.0 -1,123,011.5 1,278,250.9 0.0 1,353,157.0 18,519,737.9
Mar 12,061,918.4 4,536.5 1,300,684.9 1,730,023.6 1,485,011.8 3,215,035.4 52,328.2 -1,123,022.0 1,284,776.1 0.0 1,355,649.9 18,151,907.5
Apr 11,666,373.4 4,513.9 1,294,214.5 1,776,934.1 1,456,437.7 3,233,371.8 72,328.2 -1,123,048.8 1,286,798.5 0.0 1,352,225.0 17,786,776.6
May 12,719,399.2 74,014.2 1,274,531.2 868,247.7 1,478,780.8 2,347,028.4 106,228.2 -1,123,059.1 1,306,171.8 33.7 1,370,829.8 18,075,177.6
Jun 12,432,245.4 3,891.2 1,266,802.9 2,198,650.8 1,463,645.4 3,662,296.2 211,097.2 -1,127,724.2 1,310,923.2 0.0 1,335,714.5 19,095,246.5
Jul 12,449,351.1 31,998.2 1,270,105.5 1,319,764.1 1,421,059.7 2,740,823.8 158,228.2 -1,127,738.4 1,310,769.7 0.0 1,332,852.8 18,166,390.9
Aug 12,381,980.1 4,527.9 1,269,251.5 1,356,846.5 1,416,667.8 2,773,514.3 256,578.2 -1,127,788.7 1,311,226.2 0.0 1,330,408.2 18,199,697.7
Sep 12,290,972.3 4,508.5 1,263,832.8 1,429,118.2 1,433,153.5 2,862,271.7 311,303.4 -1,127,802.5 1,312,901.6 0.0 1,302,797.7 18,220,785.6
Oct 11,843,502.0 130,496.9 1,253,327.1 1,559,438.1 1,413,673.0 2,973,111.1 256,654.2 -1,127,815.9 1,315,055.6 0.0 1,347,219.1 17,991,550.2
Nov 11,339,284.9 129,562.8 1,253,997.6 1,805,029.0 1,423,748.0 3,228,777.0 300,739.4 -1,127,377.7 1,315,051.9 0.0 1,310,749.0 17,750,784.9
Dec 11,319,097.1 60,983.9 1,262,088.6 2,038,174.3 1,394,796.9 3,432,971.2 465,578.5 -1,219,882.6 1,317,859.0 0.0 1,411,649.1 18,050,344.8

2019-Jan 10,976,655.0 61,327.1 1,269,190.5 1,628,213.6 1,404,042.4 3,032,256.0 225,956.9 -1,219,893.2 1,318,120.1 0.0 1,452,577.0 17,116,189.5
Feb 11,272,901.8 33,735.0 1,272,716.8 1,203,939.6 1,391,447.1 2,595,386.6 463,004.1 -1,219,975.1 1,318,239.5 0.0 1,452,274.4 17,188,283.1
Mar 10,626,009.5 33,509.5 1,264,209.9 1,277,914.0 1,418,114.4 2,696,028.4 550,871.0 -1,220,022.9 1,322,687.9 0.0 1,412,174.1 16,685,467.4
Apr 9,911,745.4 33,619.5 1,258,969.3 1,919,693.5 1,370,191.3 3,289,884.8 439,259.4 -1,220,044.0 1,323,271.1 28.2 1,456,931.9 16,493,665.5
May 9,626,671.1 136,396.9 1,254,188.9 2,450,927.9 1,378,812.1 3,829,740.0 397,619.8 -1,220,052.7 1,323,829.5 0.0 1,440,066.3 16,788,459.7
Jun 10,005,874.3 68,061.3 1,266,184.7 2,446,853.2 1,420,109.6 3,866,962.8 508,195.4 -1,224,473.3 1,325,792.9 0.0 1,491,869.0 17,308,467.1
Source: Bank of Tanzania

Table A3.3 : Bank of Tanzania Liabilities

Millions of TZS
End Currency Central Interna- Allocation Capital
of in circu- government Banks' Other Foreign tional Mone- of Other and
period lation deposits deposits deposits liabilities tary Fund SDRs liabilities reserves Total

2011 2,694,169.5 1,235,421.9 1,720,844.4 69,724.3 187.1 1,024,983.5 456,771.9 1,553,119.1 99,415.4 8,854,637.0
2012 2,482,630.4 1,126,805.5 2,000,216.1 86,969.4 187.1 1,034,264.5 464,516.4 1,567,643.4 99,415.4 8,862,648.3
2013 3,324,794.6 2,550,655.3 2,034,705.2 19,956.3 7,421.4 1,181,472.7 463,131.8 1,498,411.9 98,675.7 11,179,224.9
2014 3,828,376.6 1,989,204.9 2,488,064.9 182,090.6 9,336.8 1,182,569.8 475,641.7 1,602,573.3 100,109.8 11,857,968.4
2015 4,431,833.2 1,272,358.7 3,419,493.4 280,626.2 23,423.7 1,236,275.9 567,794.9 2,434,507.5 100,000.0 13,766,313.6
2016 4,305,464.2 2,305,405.0 2,998,815.6 1,085,043.8 37,514.9 1,590,752.8 555,381.7 2,117,288.5 104,891.1 15,100,557.4
2017 4,697,211.7 4,245,516.0 3,232,417.9 1,143,707.5 78,825.3 1,466,445.1 603,610.0 2,639,316.2 99,995.3 18,207,044.9
2018 4,776,238.7 3,680,063.7 2,959,505.1 1,491,826.1 41,409.5 1,304,019.5 604,430.1 3,093,003.4 99,848.8 18,050,344.8

2018-Jan 4,453,914.4 3,597,644.4 3,524,444.1 1,388,333.4 313,590.4 1,478,256.0 620,706.0 2,940,039.2 99,995.3 18,416,923.2
Feb 4,367,633.7 4,163,074.5 3,629,468.1 1,111,011.8 292,301.3 1,478,231.6 620,670.8 2,757,350.7 99,995.3 18,519,737.9
Mar 4,433,401.7 4,211,923.3 3,013,843.8 1,295,335.0 142,346.9 1,452,679.4 622,914.3 2,879,467.8 99,995.3 18,151,907.5
Apr 4,388,256.2 4,275,693.4 2,767,829.9 1,228,229.1 160,635.4 1,450,673.4 619,815.6 2,795,648.3 99,995.3 17,786,776.6
May 4,474,116.5 4,176,766.9 3,005,268.4 1,291,637.4 432,322.7 1,495,037.8 610,389.0 2,489,643.6 99,995.3 18,075,177.6
Jun 4,639,202.1 4,718,377.4 3,270,438.8 1,774,389.1 158,406.9 1,422,967.7 606,687.8 2,404,781.3 99,995.3 19,095,246.5
Jul 4,672,739.4 3,923,340.0 2,610,400.3 1,419,909.9 388,997.6 1,423,810.0 608,269.5 2,871,977.1 246,947.2 18,166,390.9
Aug 4,642,806.0 4,154,772.0 2,825,734.2 1,343,789.0 51,342.2 1,375,111.8 607,860.5 2,930,327.3 267,954.7 18,199,697.7
Sep 4,597,062.1 3,986,307.5 2,798,016.7 1,499,256.0 84,404.6 1,373,842.8 605,265.4 3,008,878.9 267,751.5 18,220,785.6
Oct 4,542,785.9 4,020,051.1 2,729,336.8 1,451,765.7 113,642.6 1,371,382.6 600,234.1 2,894,600.0 267,751.5 17,991,550.2
Nov 4,577,824.7 3,649,742.5 2,804,968.5 1,568,117.9 57,339.1 1,371,539.6 600,555.2 2,846,041.3 274,656.1 17,750,784.9
Dec 4,776,238.7 3,680,063.7 2,959,505.1 1,491,826.1 41,409.5 1,304,019.5 604,430.1 3,093,003.4 99,848.8 18,050,344.8

2019-Jan 4,510,658.1 3,424,175.3 2,820,519.9 1,449,014.6 103,673.8 1,305,292.0 607,831.3 2,795,024.5 100,000.0 17,116,189.5
Feb 4,539,304.9 3,217,395.9 2,838,631.4 1,630,169.1 147,206.9 1,279,404.5 609,520.1 2,826,650.3 100,000.0 17,188,283.1
Mar 4,610,343.6 3,153,647.7 2,512,897.1 1,499,428.8 149,857.3 1,278,057.5 605,446.0 2,775,789.5 100,000.0 16,685,467.4
Apr 4,659,412.4 2,963,327.3 2,525,845.0 1,539,260.3 50,538.9 1,277,227.6 602,936.2 2,775,117.7 100,000.0 16,493,665.5
May 4,730,898.5 3,056,531.5 2,689,933.3 1,466,301.9 54,827.6 1,271,156.6 600,646.8 2,818,163.5 100,000.0 16,788,459.7
Jun 4,944,323.1 2,215,226.5 3,513,316.0 1,794,347.2 109,432.8 1,203,416.0 606,391.7 2,822,013.8 100,000.0 17,308,467.1
Source: Bank of Tanzania

214
 A3.0. Monetary Statistics

Table A3.4: Tanzania Notes in Circulation

Millions of TZS Percent of Total

End of
period 10/- 20/- 200/- 500/- 1,000/- 2,000/- 5,000/- 10,000/- Total 10/- 20/- 200/- 500/- 1,000/- 2,000/- 5,000/- 10,000/-

2011 99.7 497.7 1,969.0 51,519.0 83,793.4 111,196.0 420,406.8 1,982,878.0 2,652,359.4 0.0 0.0 0.1 1.9 3.2 4.2 15.9 74.8
2012 99.7 497.7 1,968.4 54,002.4 85,192.1 118,551.0 466,563.7 2,135,935.5 2,862,810.5 0.0 0.0 0.1 1.9 3.0 4.1 16.3 74.6
2013 99.7 497.7 1,968.0 57,544.7 99,078.4 141,056.3 553,031.7 2,467,015.3 3,320,291.9 0.0 0.0 0.1 1.7 3.0 4.2 16.7 74.3
2014 99.7 497.7 1,967.9 56,809.6 120,860.2 165,086.2 508,703.7 2,914,805.3 3,768,830.4 0.0 0.0 0.1 1.5 3.2 4.4 13.5 77.3
2015 99.7 497.7 1,967.4 66,216.4 141,908.3 137,161.4 664,340.2 3,011,551.7 4,023,742.8 0.0 0.0 0.0 1.6 3.5 3.4 16.5 74.8
2016 99.7 497.7 1,967.4 35,961.3 137,203.1 168,534.6 720,628.2 3,173,144.2 4,238,036.1 0.0 0.0 0.0 0.8 3.2 4.0 17.0 74.9
2017 99.7 497.7 1,967.4 24,582.1 134,552.2 199,968.1 777,637.8 3,437,348.2 4,576,653.2 0.0 0.0 0.0 0.5 2.9 4.4 17.0 75.1
2018 99.7 497.7 1,967.1 22,042.8 141,019.4 177,193.9 732,230.9 3,613,026.1 4,688,077.6 0.0 0.0 0.0 0.5 3.0 3.8 15.6 77.1

2018-Jan 99.7 497.7 1,967.4 24,400.4 130,554.6 192,734.4 727,334.0 3,279,926.6 4,357,514.7 0.0 0.0 0.0 0.6 3.0 4.4 16.7 75.3
Feb 99.7 497.7 1,967.4 23,916.7 129,420.2 178,330.4 691,576.4 3,246,575.6 4,272,384.1 0.0 0.0 0.0 0.6 3.0 4.2 16.2 76.0
Mar 99.7 497.7 1,967.4 23,662.3 130,929.9 172,789.4 685,302.2 3,280,929.0 4,296,177.5 0.0 0.0 0.0 0.6 3.0 4.0 16.0 76.4

215
Apr 99.7 497.7 1,967.3 23,458.2 131,338.4 169,093.1 667,484.7 3,298,030.8 4,291,969.9 0.0 0.0 0.0 0.5 3.1 3.9 15.6 76.8
May 99.7 497.7 1,967.3 23,234.3 134,165.4 171,192.4 685,248.0 3,362,055.4 4,378,460.2 0.0 0.0 0.0 0.5 3.1 3.9 15.7 76.8
Jun 99.7 497.7 1,967.3 23,090.2 138,085.3 178,659.1 726,282.9 3,474,139.6 4,542,821.7 0.0 0.0 0.0 0.5 3.0 3.9 16.0 76.5
Jul 99.7 497.7 1,967.4 23,480.7 137,126.8 182,869.9 734,249.3 3,495,344.7 4,575,636.1 0.0 0.0 0.0 0.5 3.0 4.0 16.0 76.4
Aug 99.7 497.7 1,967.4 22,898.5 138,053.0 187,637.5 727,396.9 3,478,020.9 4,556,571.6 0.0 0.0 0.0 0.5 3.0 4.1 16.0 76.3
Sep 99.7 497.7 1,967.3 22,549.4 137,652.3 177,792.8 696,888.0 3,461,422.5 4,498,869.7 0.0 0.0 0.0 0.5 3.1 4.0 15.5 76.9
Oct 99.7 497.7 1,967.2 22,243.2 138,358.9 178,646.6 675,369.9 3,427,303.9 4,444,487.1 0.0 0.0 0.0 0.5 3.1 4.0 15.2 77.1
Bank of Tanzania Annual Report 2018/19

Nov 99.7 497.7 1,967.1 22,135.3 138,010.2 177,420.0 687,566.1 3,433,545.8 4,461,241.9 0.0 0.0 0.0 0.5 3.1 4.0 15.4 77.0
Dec 99.7 497.7 1,967.1 22,042.8 141,019.4 177,193.9 732,230.9 3,613,026.1 4,688,077.6 0.0 0.0 0.0 0.5 3.0 3.8 15.6 77.1

2019-Jan 99.7 497.7 1,967.1 21,918.5 136,918.0 170,397.7 680,407.9 3,396,126.1 4,408,332.6 0.0 0.0 0.0 0.5 3.1 3.9 15.4 77.0
Feb 99.7 497.7 1,967.1 21,879.0 137,945.6 173,090.7 688,159.0 3,413,365.1 4,437,004.0 0.0 0.0 0.0 0.5 3.1 3.9 15.5 76.9
Mar 99.7 497.7 1,967.1 21,818.5 138,458.3 180,473.7 703,959.6 3,460,759.9 4,508,034.5 0.0 0.0 0.0 0.5 3.1 4.0 15.6 76.8
Apr 99.7 497.7 1,967.0 21,704.3 134,952.1 186,126.0 699,101.0 3,501,299.4 4,545,747.3 0.0 0.0 0.0 0.5 3.0 4.1 15.4 77.0
May 99.7 497.7 1,967.0 21,589.0 134,196.4 208,105.3 691,035.8 3,539,095.2 4,596,586.2 0.0 0.0 0.0 0.5 2.9 4.5 15.0 77.0
Jun 99.7 497.7 1,967.2 21,528.0 137,590.1 226,098.9 725,242.8 3,732,516.0 4,845,540.5 0.0 0.0 0.0 0.4 2.8 4.7 15.0 77.0
Source: Bank of Tanzania
 A3.0. Monetary Statistics

Table A3.5: Tanzania Coins in Circulation/1

Millions of TZS Percent of Total

End of
period -/05 -/10 -/20 -/50 1/- 5/- 10/- 20/- 25/- 50/- 100/- 200/- 500/- Total -/05 -/10 -/20 /50 1/- 5/- 10/- 20/- 25/- 50/= 100/- 200/- 500/-

2011 8.8 4.4 38.4 46.0 167.7 440.4 824.4 976.5 11.7 6,570.8 15,736.7 16,983.3 0.0 41,809.1 0.0 0.0 0.1 0.1 0.4 1.1 2.0 2.3 0.0 15.7 37.6 40.6 0.0

2012 8.8 4.4 38.4 46.0 167.7 440.1 820.5 965.2 11.7 7,064.4 16,978.1 20,630.7 0.0 47,175.8 0.0 0.0 0.1 0.1 0.4 0.9 1.7 2.0 0.0 15.0 36.0 43.7 0.0

2013 8.8 4.4 38.4 46.0 167.7 440.1 818.9 960.5 11.7 7,859.5 18,137.7 22,879.6 0.0 51,373.2 0.0 0.0 0.1 0.1 0.3 0.9 1.6 1.9 0.0 15.3 35.3 44.5 0.0

2014 8.8 4.4 38.4 46.0 167.8 441.1 824.7 967.6 11.8 9,511.0 22,083.0 23,882.2 0.0 57,986.8 0.0 0.0 0.1 0.1 0.3 0.8 1.4 1.7 0.0 16.4 38.1 41.2 0.0

2015 8.8 4.4 38.4 46.0 167.5 439.2 816.9 953.8 11.7 9,475.8 22,568.4 25,475.5 6,224.3 66,230.7 0.0 0.0 0.1 0.1 0.3 0.7 1.2 1.4 0.0 14.3 34.1 38.5 9.4

2016 8.8 4.4 38.4 46.0 167.5 439.2 815.4 951.0 11.7 10,449.8 25,055.8 32,681.0 15,519.7 86,188.5 0.0 0.0 0.0 0.1 0.2 0.5 0.9 1.1 0.0 12.1 29.1 37.9 18.0

2017 8.8 4.4 38.4 46.0 167.5 439.1 814.5 949.3 11.7 11,317.5 26,857.2 36,616.3 25,323.5 102,594.1 0.0 0.0 0.0 0.0 0.2 0.4 0.8 0.9 0.0 11.0 26.2 35.7 24.7

2018 8.8 4.4 38.4 46.0 167.5 439.1 814.2 948.5 11.7 11,878.6 28,616.7 40,606.6 31,329.2 114,909.6 0.0 0.0 0.0 0.0 0.1 0.4 0.7 0.8 0.0 10.3 24.9 35.3 27.3

2018-Jan 8.8 4.4 38.4 46.0 167.5 439.1 814.4 949.2 11.7 11,373.7 26,993.3 36,989.4 25,868.9 103,704.8 0.0 0.0 0.0 0.0 0.2 0.4 0.8 0.9 0.0 11.0 26.0 35.7 24.9

Feb 8.8 4.4 38.4 46.0 167.5 439.1 814.4 949.1 11.7 11,412.7 27,105.5 37,325.9 26,401.0 104,724.6 0.0 0.0 0.0 0.0 0.2 0.4 0.8 0.9 0.0 10.9 25.9 35.6 25.2

Mar 8.8 4.4 38.4 46.0 167.5 439.1 814.3 949.0 11.7 11,467.4 27,262.6 37,672.2 26,846.2 105,727.7 0.0 0.0 0.0 0.0 0.2 0.4 0.8 0.9 0.0 10.8 25.8 35.6 25.4

Apr 8.8 4.4 38.4 46.0 167.5 439.1 814.3 949.0 11.7 11,506.2 27,387.3 37,967.0 27,347.8 106,687.5 0.0 0.0 0.0 0.0 0.2 0.4 0.8 0.9 0.0 10.8 25.7 35.6 25.6

216
May 8.8 4.4 38.4 46.0 167.5 439.1 814.3 949.0 11.7 11,539.2 27,514.2 38,369.9 27,917.9 107,820.3 0.0 0.0 0.0 0.0 0.2 0.4 0.8 0.9 0.0 10.7 25.5 35.6 25.9

Jun 8.8 4.4 38.4 46.0 167.5 439.1 814.3 948.9 11.7 11,587.8 27,683.2 38,727.1 28,578.5 109,055.5 0.0 0.0 0.0 0.0 0.2 0.4 0.7 0.9 0.0 10.6 25.4 35.5 26.2

Jul 8.8 4.4 38.4 46.0 167.5 439.1 814.3 948.8 11.7 11,643.5 27,862.9 39,066.8 29,280.9 110,333.1 0.0 0.0 0.0 0.0 0.2 0.4 0.7 0.9 0.0 10.6 25.3 35.4 26.5

Aug 8.8 4.4 38.4 46.0 167.5 439.1 814.3 948.8 11.7 11,699.1 28,057.5 39,420.3 29,843.2 111,499.0 0.0 0.0 0.0 0.0 0.2 0.4 0.7 0.9 0.0 10.5 25.2 35.4 26.8

Sep 8.8 4.4 38.4 46.0 167.5 439.1 814.3 948.8 11.7 11,757.2 28,255.8 39,780.2 30,261.1 112,533.2 0.0 0.0 0.0 0.0 0.1 0.4 0.7 0.8 0.0 10.4 25.1 35.3 26.9

Oct 8.8 4.4 38.4 46.0 167.5 439.1 814.3 948.8 11.7 11,804.1 28,390.9 40,079.4 30,673.6 113,426.9 0.0 0.0 0.0 0.0 0.1 0.4 0.7 0.8 0.0 10.4 25.0 35.3 27.0

Nov 8.8 4.4 38.4 46.0 167.5 439.1 814.2 948.5 11.7 11,839.9 28,497.8 40,347.2 31,014.3 114,177.8 0.0 0.0 0.0 0.0 0.1 0.4 0.7 0.8 0.0 10.4 25.0 35.3 27.2

Dec 8.8 4.4 38.4 46.0 167.5 439.1 814.2 948.5 11.7 11,878.6 28,616.7 40,606.6 31,329.2 114,909.6 0.0 0.0 0.0 0.0 0.1 0.4 0.7 0.8 0.0 10.3 24.9 35.3 27.3
Bank of Tanzania Annual Report 2018/19

2019-Jan 8.8 4.4 38.4 46.0 167.5 439.1 814.2 948.5 11.7 11,902.6 28,719.4 40,727.1 31,687.3 115,515.0 0.0 0.0 0.0 0.0 0.1 0.4 0.7 0.8 0.0 10.3 24.9 35.3 27.4

Feb 8.8 4.4 38.4 46.0 167.5 439.1 814.1 948.5 11.7 11,943.1 28,828.5 40,916.0 32,026.8 116,192.9 0.0 0.0 0.0 0.0 0.1 0.4 0.7 0.8 0.0 10.3 24.8 35.2 27.6

Mar 8.8 4.4 38.4 46.0 167.5 439.1 814.1 948.5 11.7 11,983.2 28,968.6 41,077.2 32,482.6 116,990.1 0.0 0.0 0.0 0.0 0.1 0.4 0.7 0.8 0.0 10.2 24.8 35.1 27.8

Apr 8.8 4.4 38.4 46.0 167.5 439.1 814.1 948.4 11.7 12,020.4 29,062.2 41,241.3 32,956.7 117,759.2 0.0 0.0 0.0 0.0 0.1 0.4 0.7 0.8 0.0 10.2 24.7 35.0 28.0

May 8.8 4.4 38.4 46.0 167.5 439.1 814.1 948.3 11.7 12,065.4 29,225.1 41,438.3 33,589.5 118,796.6 0.0 0.0 0.0 0.0 0.1 0.4 0.7 0.8 0.0 10.2 24.6 34.9 28.3

Jun 8.8 4.4 38.4 46.0 167.5 439.1 814.1 948.3 11.7 12,107.0 29,348.2 41,635.2 34,083.8 119,652.4 0.0 0.0 0.0 0.0 0.1 0.4 0.7 0.8 0.0 10.1 24.5 34.8 28.5

Source: Bank of Tanzania

Note: /1 excludes commemorative coins
 Bank of Tanzania Annual Report 2018/19

A3.0. Monetary Statistics

Table A3.6: Commercial Banks Assets

Millions of TZS

Domestic assets Foreign assets

Deposit with
End of
Bank of Treasury Other
period Cash Tanzania securities securities Loans and bills Other Liquid Others Fixed assets Total

2011 458,339.7 1,716,218.7 2,040,559.3 37,407.2 7,723,629.9 900,196.5 1,505,320.6 191,567.7 634,533.4 15,207,773.0

2012 495,209.7 1,785,793.4 2,877,270.9 52,666.8 9,248,521.7 1,218,284.2 1,260,420.2 133,720.7 734,604.6 17,806,492.1

2013 560,831.6 1,954,249.3 3,700,292.0 33,052.0 10,631,959.2 1,337,929.5 1,234,830.5 134,325.3 838,798.7 20,426,268.1

2014 583,651.7 2,450,986.8 3,913,908.7 51,015.0 12,766,058.8 1,363,272.3 1,206,352.7 104,340.8 996,938.9 23,436,525.8

2015 753,329.7 3,254,339.0 3,727,326.7 64,553.6 15,807,127.5 1,472,816.5 1,643,062.3 531,390.3 1,205,745.3 28,459,690.9

2016 696,753.8 2,941,613.8 4,058,080.8 109,644.4 16,917,589.9 1,546,301.9 1,339,801.8 329,149.1 1,518,670.1 29,457,605.7

2017 865,607.2 3,276,960.8 5,594,444.1 87,635.7 17,201,346.7 2,084,935.9 1,359,611.9 261,080.6 1,735,929.7 32,467,552.6

2018-Jan 777,593.5 3,546,823.9 5,404,165.0 87,437.2 17,216,408.8 2,134,595.2 1,398,595.4 361,472.5 1,750,385.2 32,677,476.8

Feb 753,494.2 3,997,883.2 5,486,243.7 92,457.2 17,167,165.2 2,220,838.8 1,281,725.0 341,965.0 1,771,839.0 33,113,611.2

Mar 729,389.9 3,232,224.2 5,545,175.9 96,363.6 17,057,821.4 2,273,938.5 1,563,686.7 207,988.0 1,811,955.1 32,518,543.3

Apr 767,942.7 2,908,330.2 5,607,799.8 113,552.0 17,020,036.0 2,236,711.9 1,788,573.2 309,573.5 1,816,338.0 32,568,857.4

May 725,079.2 3,026,026.3 5,472,627.8 118,559.5 17,516,864.3 2,272,305.8 1,578,783.9 222,739.6 1,841,463.3 32,774,449.7

Jun 712,956.3 3,151,151.2 5,370,807.5 117,871.6 17,771,334.3 2,203,321.4 1,667,866.7 202,338.0 1,837,619.6 33,035,266.6

Jul 787,638.2 2,622,028.6 5,408,364.6 55,644.9 17,724,404.8 2,159,041.3 1,666,377.1 366,834.0 1,844,336.5 32,634,670.0

Aug 776,986.8 2,764,079.9 5,306,599.0 57,244.0 17,668,860.5 2,052,604.3 1,546,447.3 424,899.4 1,853,640.8 32,451,362.1

Sep 761,896.3 2,722,656.5 5,300,745.4 54,704.7 17,695,056.1 1,978,505.0 1,640,019.7 522,959.7 1,892,904.3 32,569,447.6

Oct 786,572.3 2,666,649.1 5,150,311.9 61,329.8 17,622,987.5 1,926,644.3 1,810,796.7 464,385.1 1,898,279.8 32,387,956.5

Nov 804,220.9 2,561,378.4 5,157,837.4 57,437.8 17,895,220.4 1,993,927.9 1,850,632.4 513,135.1 1,913,747.7 32,747,538.0

Dec 909,570.2 2,890,138.0 4,993,556.3 52,883.9 17,891,437.7 2,007,564.4 1,857,754.5 347,459.7 1,898,147.8 32,848,512.5

2019-Jan 801,425.9 2,864,573.7 5,097,434.8 62,992.0 18,335,058.9 2,067,110.8 1,712,915.3 414,575.7 1,952,813.1 33,308,900.2

Feb 805,416.9 2,824,036.2 5,105,351.8 58,277.3 18,613,134.4 2,156,451.6 1,727,537.0 466,360.2 1,946,841.0 33,703,406.3

Mar 827,568.1 2,561,773.0 4,995,752.8 59,168.2 18,833,113.9 2,317,580.1 1,862,153.4 523,121.4 1,943,676.3 33,923,907.2

Apr 887,315.5 2,594,015.8 5,105,093.0 63,805.0 18,946,969.7 2,208,020.0 1,793,448.5 568,085.8 1,964,038.5 34,130,792.0

May 805,205.0 2,744,193.0 5,190,451.7 65,144.3 19,144,304.3 2,224,836.1 1,722,760.5 625,869.5 1,967,752.5 34,490,516.9

Jun 823,335.5 3,517,553.9 5,276,896.7 72,555.5 19,157,611.3 2,227,276.7 1,772,381.3 791,059.8 1,976,676.1 35,615,346.7
Source: Banks and Bank of Tanzania computations

217
 Bank of Tanzania Annual Report 2018/19

A3.0. Monetary Statistics

Table A3.7: Commercial Banks Liabilities

Millions of TZS

Domestic liabilities Foreign liabilities

Capital
Due to Bank Due to other Foreign Due to and
End of period Deposits of Tanzania banks Other banks other reserves Total

2011 10,715,782.2 0.0 357,570.4 2,072,724.7 202,667.5 83,779.5 1,775,248.6 15,207,773.0

2012 12,110,517.7 4,200.0 588,704.2 2,581,225.2 250,909.4 132,528.4 2,138,407.2 17,806,492.1
2013 13,322,900.6 14.3 800,311.0 2,782,696.7 542,898.0 437,425.6 2,540,021.8 20,426,268.1
2014 15,195,922.5 0.0 941,622.7 3,213,162.8 618,950.5 520,667.1 2,946,200.2 23,436,525.8
2015 18,160,733.2 0.0 1,174,128.5 3,863,587.6 558,479.4 900,113.3 3,802,648.9 28,459,690.9
2016 18,188,706.3 1.0 1,466,395.4 3,730,391.4 413,906.8 1,350,132.3 4,308,072.5 29,457,605.7
2017 19,824,561.1 8,501.0 1,749,055.4 4,015,889.9 381,117.4 1,793,347.0 4,695,080.8 32,467,552.6
2018 20,562,827.0 106,750.0 1,646,188.6 3,540,200.2 473,485.7 1,794,250.1 4,724,810.8 32,848,512.5

2018-Jan 19,973,504.3 9,649.9 1,671,851.0 4,158,233.6 385,271.9 1,765,723.5 4,713,242.5 32,677,476.8

Feb 20,247,144.7 8,501.0 1,822,438.6 4,169,437.2 343,208.3 1,771,908.3 4,750,973.1 33,113,611.2
Mar 19,571,499.0 8,501.0 1,874,493.0 4,328,433.3 342,307.4 1,697,408.0 4,695,901.5 32,518,543.3
Apr 19,678,643.7 8,502.5 1,835,786.1 4,272,981.3 382,351.2 1,698,997.0 4,691,595.6 32,568,857.4
May 19,574,058.5 8,501.0 1,892,020.9 4,501,918.6 409,949.0 1,672,278.2 4,715,723.5 32,774,449.7
Jun 19,891,442.4 9,612.9 1,871,154.8 4,454,972.5 377,298.9 1,771,097.5 4,659,687.5 33,035,266.6
Jul 19,663,473.7 27,039.4 1,780,231.8 4,333,963.0 392,243.2 1,753,989.4 4,683,729.5 32,634,670.0
Aug 19,927,224.8 90,794.2 1,880,247.8 3,878,837.7 407,383.8 1,548,308.5 4,718,565.3 32,451,362.1
Sep 20,040,729.6 85,998.1 1,631,082.1 4,039,403.6 507,999.6 1,519,774.3 4,744,460.4 32,569,447.6
Oct 20,161,025.3 108,055.1 1,388,070.0 4,063,058.5 488,177.1 1,419,599.1 4,759,971.3 32,387,956.5
Nov 20,252,134.3 79,505.3 1,623,330.9 4,066,786.5 488,751.9 1,449,881.9 4,787,147.3 32,747,538.0
Dec 20,562,827.0 106,750.0 1,646,188.6 3,540,200.2 473,485.7 1,794,250.1 4,724,810.8 32,848,512.5

2019-Jan 20,705,679.3 114,802.3 1,094,944.0 4,365,729.9 344,677.8 1,932,353.1 4,750,713.9 33,308,900.2

Feb 20,608,463.9 72,570.5 1,172,473.6 4,784,190.0 305,524.0 1,997,205.3 4,762,979.0 33,703,406.3
Mar 20,525,039.9 66,945.0 1,327,065.1 5,016,408.6 420,239.6 1,836,248.3 4,731,960.7 33,923,907.2
Apr 20,422,920.6 71,527.5 1,047,018.6 5,529,725.1 446,318.3 1,779,356.8 4,833,925.1 34,130,792.0
May 20,640,428.5 41,000.0 1,192,973.3 5,378,334.2 420,460.2 2,019,652.0 4,797,668.7 34,490,516.9
Jun 21,406,863.8 76,476.5 1,199,753.7 5,782,851.5 474,405.6 1,883,590.1 4,791,405.6 35,615,346.7
Source: Banks and Bank of Tanzania computations

218
 Bank of Tanzania Annual Report 2018/19

A3.0. Monetary Statistics

Table A3.8: Commercial Banks Domestic Assets

Millions of TZS
Public non-
End of Bank of Other financial Private Other
Central financial State and
period Tanzania corporation Governemnt corporations local govt sector assets Total

2011 2,174,558.4 331,196.0 2,091,028.7 598,317.1 23,009.2 6,589,844.1 1,702,931.2 13,510,884.6

2012 2,281,003.1 269,381.8 2,952,030.7 718,299.7 33,678.6 7,932,639.4 2,225,318.0 16,412,351.2
2013 2,515,081.0 446,314.8 3,847,316.7 766,036.0 29,378.2 9,093,473.9 2,359,511.8 19,057,112.3
2014 3,034,638.5 498,356.3 4,105,573.3 839,926.5 83,110.1 10,925,464.1 2,638,763.4 22,125,832.2
2015 4,007,668.7 596,052.8 4,011,058.2 1,059,716.1 48,825.4 13,654,275.2 2,907,642.0 26,285,238.3
2016 3,638,367.6 497,251.5 4,190,516.1 1,229,992.1 66,672.1 14,693,432.7 3,472,422.8 27,788,654.8
2017 4,142,568.1 479,758.2 5,735,958.7 809,345.2 76,356.3 15,420,368.1 4,182,505.6 30,846,860.2
2018 3,799,708.2 654,653.9 5,089,523.4 594,853.4 84,941.3 16,300,873.2 4,118,744.9 30,643,298.3
2018-Jan 4,324,417.4 515,334.8 5,544,545.9 801,776.6 77,369.9 15,417,677.8 4,236,286.4 30,917,408.8
Feb 4,751,377.4 552,146.4 5,633,437.2 1,061,054.4 77,399.1 15,071,809.7 4,342,697.1 31,489,921.2
Mar 3,961,614.0 553,428.2 5,662,708.2 770,865.2 76,322.5 15,313,985.4 4,407,944.9 30,746,868.5
Apr 3,676,272.9 706,038.3 5,703,724.8 501,920.3 78,677.4 15,465,435.3 4,338,641.6 30,470,710.7
May 3,751,105.5 532,506.7 5,565,231.6 730,465.5 91,786.7 15,818,285.7 4,483,544.6 30,972,926.2
Jun 3,864,107.5 540,333.1 5,462,405.8 763,648.7 89,985.0 16,052,310.8 4,392,271.0 31,165,061.8
Jul 3,409,666.8 565,273.5 5,499,438.7 1,020,948.2 91,474.8 15,674,338.6 4,340,318.3 30,601,458.9
Aug 3,541,066.7 608,367.9 5,406,197.7 645,639.6 91,309.7 16,153,278.8 4,034,155.0 30,480,015.4
Sep 3,484,552.8 1,178,693.5 5,378,545.4 1,168,534.0 84,282.7 15,054,475.4 4,057,384.4 30,406,468.2
Oct 3,453,221.4 770,412.2 5,226,902.4 591,786.5 83,539.7 16,061,542.0 3,925,370.5 30,112,774.7
Nov 3,365,599.3 681,195.3 5,241,043.9 611,559.1 85,300.0 16,333,215.5 4,065,857.4 30,383,770.6
Dec 3,799,708.2 654,653.9 5,089,523.4 594,853.4 84,941.3 16,300,873.2 4,118,744.9 30,643,298.3

2019-Jan 3,665,999.6 517,163.1 5,184,844.4 598,879.8 85,318.5 16,870,716.3 4,258,487.5 31,181,409.2

Feb 3,629,453.1 531,034.3 5,264,801.4 561,395.5 86,666.3 17,152,966.2 4,283,192.4 31,509,509.0
Mar 3,389,341.1 896,273.4 5,180,387.5 550,614.4 86,010.3 16,809,434.8 4,626,570.8 31,538,632.4
Apr 3,481,331.4 1,661,920.0 5,289,880.3 508,878.3 88,208.8 16,237,675.2 4,501,363.7 31,769,257.7
May 3,549,397.9 968,177.3 5,382,261.6 506,691.3 81,137.3 17,115,818.3 4,538,403.1 32,141,886.9
Jun 4,340,889.4 972,549.5 5,462,987.4 526,811.8 56,800.7 17,169,006.0 4,522,860.8 33,051,905.7
Source: Banks and Bank of Tanzania computations

219
 Bank of Tanzania Annual Report 2018/19

A3.0. Monetary Statistics

Table A3.9: Commercial Banks Lending and Holding of Securities

Millions of TZS

Domestic lending
Loans to Loans to Loans to
End other other Loans Loans state Loans public Loans other other Loans to Lending to
of depository financial Central and local non-financial non-financial resident non- deposit
period corporations corporations Government government corporations corporations sectors residents Total ratio Securities

2011 237,592.5 260,524.7 49,469.4 23,009.2 598,093.1 3,959,242.3 2,595,698.7 191,272.0 7,914,901.9 67.1 2,040,559.3

2012 378,787.9 189,223.1 73,759.8 33,678.6 718,176.3 3,397,428.8 4,457,467.2 133,387.2 9,381,908.9 69.9 2,877,270.9

2013 315,336.6 337,799.4 145,574.7 29,378.2 765,952.4 5,306,741.6 3,731,176.3 133,741.3 10,765,700.5 71.2 3,700,292.0

2014 428,087.4 389,381.3 190,214.7 83,110.1 839,880.0 6,329,950.8 4,505,434.6 103,752.3 12,869,811.1 75.6 3,913,908.7

2015 425,755.9 453,104.0 283,731.4 48,825.4 1,059,669.7 7,794,112.7 5,741,928.4 530,638.0 16,337,765.5 81.4 3,727,326.7

2016 629,310.6 317,480.7 132,435.3 66,672.1 1,229,946.4 8,767,305.3 5,774,439.6 328,394.1 17,245,984.1 87.3 4,058,080.8

2017 634,245.8 255,045.6 141,514.6 76,356.3 809,299.0 9,194,921.0 6,089,964.5 260,173.3 17,461,520.0 81.9 5,594,444.1

2018 445,876.5 429,616.1 95,967.1 84,941.3 594,807.4 9,519,421.0 6,720,808.3 346,552.1 18,237,989.8 82.6 4,993,556.3

2018-Jan 646,694.8 265,783.0 140,381.0 77,369.9 801,730.4 8,936,148.4 6,348,301.4 360,559.2 17,576,968.0 81.7 5,404,165.0

Feb 678,608.2 265,918.7 147,193.5 77,399.1 1,061,008.1 8,896,991.8 6,040,045.9 341,051.8 17,508,217.0 80.3 5,486,243.7

Mar 649,843.6 273,672.0 117,532.3 76,322.5 770,319.0 8,733,597.5 6,436,534.6 207,072.6 17,264,894.0 81.4 5,545,175.9

Apr 608,296.2 427,602.9 95,924.9 78,677.4 501,374.1 8,659,100.2 6,649,060.3 308,579.1 17,328,615.1 80.9 5,607,799.8

May 711,739.6 233,538.6 92,603.8 91,786.7 729,919.5 8,876,832.5 6,780,443.7 221,833.7 17,738,698.1 83.1 5,472,627.8

Jun 695,704.6 238,619.6 91,598.3 89,985.0 763,102.6 8,993,993.9 6,898,330.3 201,432.7 17,972,767.0 83.2 5,370,807.5

Jul 688,491.2 256,347.2 91,074.1 91,474.8 1,020,402.1 8,968,981.9 6,607,633.5 365,927.4 18,090,332.2 84.8 5,408,364.6

Aug 470,741.9 305,977.0 99,598.7 91,309.7 645,093.5 8,918,494.3 7,137,645.4 423,992.7 18,092,853.2 83.9 5,306,599.0

Sep 492,313.7 902,866.3 77,800.0 84,282.7 1,168,487.9 8,428,127.0 6,541,178.4 522,053.0 18,217,109.0 85.0 5,300,745.4

Oct 406,783.4 503,813.9 76,590.5 83,539.7 591,740.4 8,941,216.6 7,019,303.0 463,479.9 18,086,467.4 84.4 5,150,311.9

Nov 447,877.7 434,373.8 83,206.5 85,300.0 611,513.0 8,783,743.9 7,449,205.5 512,228.6 18,407,449.0 84.8 5,157,837.4

Dec 445,876.5 429,616.1 95,967.1 84,941.3 594,807.4 9,519,421.0 6,720,808.3 346,552.1 18,237,989.8 82.6 4,993,556.3

2019-Jan 437,456.7 324,791.7 87,409.7 85,318.5 598,879.8 9,999,969.9 6,801,232.7 413,668.0 18,748,726.8 83.9 5,067,786.6

Feb 424,156.8 337,795.5 159,449.6 86,666.3 561,395.5 10,129,846.6 6,913,824.1 465,451.2 19,078,585.6 85.8 5,094,312.4

Mar 633,351.5 679,094.8 184,634.8 86,010.3 550,614.4 9,591,911.7 7,107,496.4 505,687.5 19,338,801.4 86.2 4,984,713.4

Apr 610,145.0 1,424,047.8 184,787.3 88,208.8 508,832.2 9,044,981.4 7,085,967.3 553,695.8 19,500,665.5 87.6 5,094,053.7

May 668,622.3 689,081.1 191,809.9 81,137.3 506,645.2 9,789,665.6 7,217,342.9 611,508.7 19,755,812.9 87.6 5,179,412.4

Jun 644,240.3 689,265.9 186,090.6 56,800.7 526,765.7 9,902,745.0 7,151,703.1 776,697.3 19,934,308.6 85.3 5,266,960.1

Source: Banks and Bank of Tanzania computations

220
 A3.0. Monetary Statistics

Table A3.10: Commercial Banks Domestic Lending by Economic Activity

Millions of TZS

Financial Building Warehousi

End of intermediar Mining and and Real Transport and Hotels and ng and Other
Period Agriculture Fishing Forest Hunting ies quarrying Manufacturing construction estate Mortgage Leasing communication Trade Tourism restaurants storage Electicity Gas Water Education Health services Personal Total

2011 912,331.8 75,275.4 17,700.2 275.1 177,691.8 39,175.7 928,746.6 320,938.2 293,267.8 0.0 12,825.3 545,243.5 1,523,962.2 49,730.4 361,039.7 15,375.8 166,672.8 169,608.8 2,196.3 107,301.6 18,375.0 103,528.1 1,557,495.5 7,398,757.6

2012 938,915.0 42,932.4 1,031.0 211.9 231,269.4 55,158.0 991,795.9 410,748.0 380,064.2 0.0 13,580.7 610,053.9 1,843,242.7 60,152.3 363,033.4 23,301.8 338,035.1 130,583.4 3,455.8 183,637.7 42,463.6 280,211.0 1,778,743.2 8,722,620.4

2013 965,140.6 34,681.1 14,769.7 2,316.5 251,255.0 96,739.0 1,160,593.7 514,408.4 486,344.9 0.0 20,072.7 727,538.0 2,162,191.4 113,394.5 371,008.5 17,993.3 403,022.7 209,267.1 4,129.7 286,542.3 52,125.5 517,489.1 1,744,954.0 10,155,977.7

2014 1,057,347.9 36,558.4 18,954.9 9,252.4 310,711.6 166,275.2 1,386,236.9 660,147.8 493,527.5 0.0 63,220.8 925,723.9 2,652,057.0 129,478.1 436,101.1 18,589.5 440,936.5 185,807.7 4,257.2 409,422.3 78,742.1 523,917.3 2,104,496.5 12,111,762.6

2015 1,174,242.9 43,515.8 25,237.1 6,782.2 404,605.8 275,233.3 1,695,767.4 741,401.0 670,305.3 0.0 59,118.4 1,231,805.7 3,077,683.0 176,626.3 514,642.0 20,645.5 439,801.0 342,376.6 15,398.4 514,186.7 123,325.3 820,204.2 2,731,740.4 15,104,644.3

2016 1,107,645.3 48,400.1 21,777.9 2,462.2 388,745.2 328,620.4 1,627,766.0 740,726.8 822,985.4 0.0 44,625.8 1,180,904.6 3,349,328.7 198,482.0 526,390.2 16,789.0 429,919.2 459,273.3 14,780.6 593,996.8 113,503.7 1,006,238.5 2,981,741.5 16,005,103.2

2017 1,134,818.7 64,603.9 19,979.2 136.4 292,127.7 292,647.1 1,777,572.5 837,159.1 816,350.6 0.0 9,113.4 975,551.5 3,306,914.0 176,349.3 594,967.8 11,251.8 335,175.4 266,965.0 18,334.3 454,809.4 126,850.2 1,454,067.4 3,258,724.3 16,224,469.1

2018 952,883.8 74,022.3 18,840.4 513.4 172,925.5 375,188.4 2,087,896.2 643,251.8 855,878.9 317,809.5 9,017.7 918,004.9 3,228,853.0 138,766.1 587,287.5 23,712.9 358,122.0 388,152.0 27,276.4 223,823.9 63,080.6 631,236.4 5,019,538.6 17,116,082.1

2018 - Jan 1,116,968.7 58,392.3 20,296.8 141.0 286,917.2 332,606.4 1,829,046.9 783,454.4 811,958.4 0.0 8,510.0 956,000.8 3,428,602.6 178,025.7 601,120.3 15,616.3 331,490.4 294,381.3 25,264.3 455,968.8 83,803.0 1,270,306.8 3,329,126.2 16,217,998.8

Feb 1,082,701.0 57,426.6 18,131.7 128.2 244,573.4 299,263.9 1,848,602.2 817,897.2 848,985.0 0.0 12,479.5 930,171.7 3,264,537.3 180,227.8 599,425.9 13,175.7 325,766.9 286,347.8 17,265.9 207,171.6 55,080.2 643,649.7 4,385,529.3 16,138,538.7

Mar 1,048,378.9 56,486.7 18,593.1 127.1 245,943.9 333,878.0 1,769,716.1 822,380.8 840,237.2 0.0 12,284.6 905,600.8 3,343,101.5 175,246.0 610,560.8 11,084.6 296,430.6 280,337.4 16,983.0 214,352.6 54,907.2 638,810.6 4,367,713.1 16,063,154.6

Apr 1,057,115.5 62,183.5 19,512.7 127.9 241,467.8 338,889.4 1,730,640.7 826,507.3 839,528.2 0.0 11,794.1 934,584.5 3,317,980.4 154,799.7 587,440.9 9,620.2 301,786.5 296,626.7 16,654.9 213,716.2 55,471.6 638,368.5 4,403,629.1 16,058,446.0

221
May 1,073,429.8 65,269.2 18,973.8 77.1 217,384.8 363,845.2 1,875,542.0 723,415.7 910,850.3 0.0 11,723.9 958,797.9 3,378,169.0 155,371.6 596,881.5 9,860.4 345,812.5 291,732.5 17,196.4 218,034.0 61,072.1 657,544.5 4,486,357.8 16,437,341.8

Jun 1,117,845.8 68,619.7 18,686.6 80.4 181,925.0 360,602.4 1,777,041.8 811,855.5 898,834.0 0.0 11,811.8 987,646.9 3,431,595.5 148,814.5 608,875.1 10,965.3 384,129.5 305,219.5 16,688.4 215,188.6 80,275.8 720,682.4 4,576,713.9 16,734,098.2

Jul 1,068,607.7 74,719.8 18,593.8 80.0 242,739.2 358,619.9 1,820,536.7 778,404.9 894,692.5 0.0 11,409.8 970,271.5 3,291,741.1 147,378.3 579,589.9 15,437.4 342,783.6 307,603.8 16,731.7 219,243.3 75,381.7 825,775.7 4,638,587.2 16,698,929.6

Aug 996,273.0 33,236.8 18,138.7 762.0 197,946.2 347,285.7 1,933,915.5 672,563.3 858,507.8 395,410.9 22,358.9 946,825.6 3,221,815.2 133,032.7 572,691.0 11,909.4 398,251.0 322,349.0 20,202.7 219,214.5 73,305.2 795,072.3 4,699,286.5 16,890,353.9

Sep 989,116.1 69,620.2 17,492.2 693.3 193,699.4 379,854.1 1,892,606.0 647,548.5 883,674.9 394,307.1 21,593.0 936,015.3 3,249,712.3 143,598.0 581,188.5 23,997.9 393,320.5 332,732.8 33,255.6 221,003.3 79,524.4 891,318.9 4,481,626.4 16,857,498.7

Oct 941,512.8 68,910.3 16,191.7 669.9 179,808.3 360,763.7 1,937,598.1 642,935.6 873,240.0 397,725.8 9,820.5 929,859.7 3,276,627.6 140,909.6 582,643.4 20,063.7 355,930.5 369,111.0 29,979.0 208,490.4 53,775.2 566,791.0 4,922,706.5 16,886,064.2

Nov 954,144.8 70,798.6 19,667.7 578.5 176,243.9 372,308.1 1,983,608.1 639,608.9 855,129.9 398,892.1 10,220.4 921,628.9 3,314,673.0 152,590.2 577,124.4 20,928.1 358,466.2 405,177.7 29,128.2 224,755.3 52,562.0 519,404.2 5,057,703.4 17,115,342.5
Bank of Tanzania Annual Report 2018/19

Dec 952,883.8 74,022.3 18,840.4 513.4 172,925.5 375,188.4 2,087,896.2 643,251.8 855,878.9 317,809.5 9,017.7 918,004.9 3,228,853.0 138,766.1 587,287.5 23,712.9 358,122.0 388,152.0 27,276.4 223,823.9 63,080.6 631,236.4 5,019,538.6 17,116,082.1

2019 - Jan 1,369,684.1 71,825.7 19,822.8 467.7 166,767.6 408,392.7 2,030,816.2 697,263.3 903,603.0 398,583.3 8,598.4 909,306.2 3,237,112.4 133,923.0 580,000.4 18,920.7 362,499.0 357,128.4 27,906.0 223,137.8 68,109.0 474,344.0 5,084,720.4 17,552,932.2

Feb 1,451,731.1 71,995.2 19,213.9 443.8 163,667.5 479,040.3 2,088,360.7 754,905.7 893,686.8 406,532.0 7,944.0 929,073.1 3,318,332.5 139,671.1 575,585.5 13,831.4 363,347.7 301,996.3 27,679.2 220,667.5 60,763.1 512,786.4 5,066,064.9 17,867,319.3

Mar 1,528,821.3 47,599.9 18,509.8 420.8 218,646.7 459,254.6 2,084,241.9 804,767.9 862,184.8 387,993.8 7,224.8 945,051.9 3,264,272.9 134,477.4 566,523.3 14,696.2 274,787.0 392,500.2 27,554.0 235,723.4 61,697.2 474,502.8 5,131,665.5 17,943,118.0

Apr 1,593,372.6 44,612.1 18,734.2 406.0 207,961.4 459,260.5 2,033,099.8 787,330.0 824,014.3 325,738.7 6,655.2 959,144.4 3,365,942.7 126,656.2 542,745.8 14,809.6 229,742.3 398,969.0 27,257.4 232,116.5 60,799.5 656,096.6 5,189,080.0 18,104,544.6

May 1,579,846.1 43,398.4 18,669.5 369.6 196,885.2 477,479.1 1,998,048.2 820,349.7 812,082.0 321,461.5 6,191.7 953,475.1 3,237,329.1 131,472.2 544,439.4 13,652.5 246,241.5 377,981.2 26,868.2 233,964.0 66,619.0 606,605.9 5,372,681.5 18,086,110.4

Jun 1,571,731.4 47,829.2 19,390.6 350.8 196,887.0 462,915.0 2,034,989.5 811,191.2 820,225.1 324,503.9 5,919.8 942,942.0 3,288,932.9 134,917.6 540,703.2 13,573.8 226,263.7 362,820.6 26,309.8 233,730.3 70,704.4 618,701.8 5,374,256.3 18,129,789.9
Source: Banks and Bank of Tanzania computations
 Bank of Tanzania Annual Report 2018/19

A3.0. Monetary Statistics

Table A3.11: Commercial Banks Deposits
Millions of TZS

of which
Transferrable Other
State and Other Public non- Other Non- Other Deposits of deposits in deposits in Foreign
End of Central local financial finanacial finanacial Other depository non- national national currency
period government government corporations corporation corporation residents corporation residents Total currency currency* deposits

2011 626,616.2 384,348.8 1,018,837.5 359,757.6 117,316.3 8,835,521.9 258,430.3 202,667.5 11,803,496.2 3,819,890.3 3,729,520.4 4,254,085.5

2012 732,515.4 540,378.4 1,114,929.3 389,460.9 159,696.4 9,906,052.8 320,733.8 250,909.4 13,414,676.3 4,819,966.6 4,190,178.4 4,404,531.3

2013 791,802.9 602,217.4 1,143,523.1 692,666.9 193,905.0 10,690,588.2 465,960.7 542,898.0 15,123,562.1 5,113,564.8 4,807,640.1 5,202,357.3

2014 808,422.1 379,796.5 1,351,803.3 577,737.5 310,323.3 12,576,262.0 406,833.5 618,950.5 17,030,128.7 5,657,524.5 5,627,920.1 5,744,684.1

2015 856,925.4 423,966.8 1,444,182.1 720,606.3 253,563.6 15,318,414.5 490,131.4 558,479.4 20,066,269.4 6,511,814.5 6,167,666.1 7,386,788.8

2016 577,788.9 478,711.3 1,578,544.3 456,829.7 249,859.1 15,424,761.8 576,800.7 413,906.8 19,757,202.7 6,655,153.1 6,473,659.1 6,628,390.4

2017 560,520.3 503,797.4 1,587,087.1 427,910.7 255,090.7 17,050,675.2 551,932.1 381,117.4 21,318,130.8 7,333,191.1 7,153,062.1 6,831,877.6

2018-Jan 632,826.3 491,876.6 1,679,214.4 452,756.0 274,377.3 17,075,280.1 528,991.5 385,271.9 21,520,594.0 7,511,722.8 7,177,247.0 6,831,624.3

Feb 669,232.1 524,498.6 1,683,597.8 510,053.2 287,060.2 17,241,934.9 555,978.2 343,208.3 21,815,563.4 7,514,920.0 7,168,905.2 7,131,738.2

Mar 623,850.0 390,257.9 1,677,038.4 442,137.3 282,621.8 16,779,443.6 682,790.6 342,307.4 21,220,447.0 7,543,693.9 6,909,939.7 6,766,813.4

Apr 619,505.7 351,009.2 1,598,587.0 487,781.0 286,450.2 16,954,816.2 726,082.3 382,351.2 21,406,583.0 7,561,468.3 6,893,543.3 6,951,571.3

May 593,152.9 346,939.9 1,521,275.3 486,959.2 282,819.1 16,936,065.0 760,135.2 409,949.0 21,337,295.7 7,473,235.2 7,041,500.8 6,822,559.6

Jun 560,111.0 399,045.7 1,528,580.9 489,416.2 281,654.7 17,192,745.0 764,775.1 377,298.9 21,593,627.4 7,701,646.1 7,008,861.7 6,883,119.6

Jul 559,685.2 224,731.2 1,430,313.4 504,254.3 283,564.3 17,220,610.5 719,863.5 392,243.2 21,335,265.7 7,444,350.6 7,021,194.7 6,869,720.4

Aug 429,217.5 281,907.5 1,679,552.3 614,420.7 371,276.3 16,980,068.0 805,156.8 407,383.8 21,568,982.9 7,552,732.4 7,026,311.4 6,989,939.1

Sep 341,211.5 286,651.7 1,373,382.1 1,188,680.8 249,032.7 16,942,982.3 533,825.8 507,999.6 21,423,766.5 7,434,091.9 6,968,423.4 7,021,251.2

Oct 331,993.4 257,725.1 1,268,419.8 858,801.6 368,011.7 17,408,067.1 449,284.1 488,177.1 21,430,480.0 7,380,470.8 7,097,460.6 6,952,548.6

Nov 310,626.8 247,943.8 1,351,732.2 978,915.2 359,250.3 17,314,292.7 643,970.1 488,751.9 21,695,483.0 7,649,356.8 7,048,194.8 6,997,931.4

Dec 358,472.4 244,120.1 1,346,079.4 766,159.5 316,584.2 17,889,883.8 689,758.9 473,485.7 22,084,544.1 7,678,712.3 7,204,236.7 7,201,595.0

2019-Jan 726,225.0 292,181.2 1,462,684.0 662,495.1 313,154.1 17,975,164.9 566,024.3 344,677.8 22,342,606.4 7,686,546.4 7,625,334.5 7,030,725.5

Feb 815,386.0 315,430.8 1,536,758.5 787,411.7 334,346.7 17,634,516.2 515,084.2 305,524.0 22,244,458.0 7,703,060.8 7,783,774.9 6,757,622.3

Mar 866,864.7 275,484.0 1,511,513.3 614,185.7 314,762.9 17,809,093.9 618,738.9 420,239.6 22,430,883.1 7,602,406.8 7,802,253.9 7,026,222.5

Apr 899,826.7 347,417.8 1,410,166.3 759,495.3 280,238.1 17,625,603.1 500,228.6 446,318.3 22,269,294.1 7,904,041.5 7,816,555.2 6,548,697.3

May 902,826.2 342,924.6 1,317,918.9 843,334.0 276,599.2 17,859,651.8 584,038.3 420,460.2 22,547,753.2 8,038,858.3 7,933,605.6 6,575,289.3

Jun 899,590.3 305,643.2 1,449,800.9 667,630.6 278,476.7 18,705,312.4 589,890.1 474,405.6 23,370,749.8 8,950,253.7 7,880,868.1 6,539,627.9
Source: Banks and Bank of Tanzania computations

Note: * include time and saving deposits

222
 Bank of Tanzania Annual Report 2018/19

A3.0. Monetary Statistics

Table A3.12: Interest Rate Structure, Weighted Averages
Percent

2019

2011 2012 2013 2014 2015 2016 2017 2018 Jan Feb Mar Apr May Jun

In Domestic currency
1 Interbank cash market rates
Overnight 7.80 11.60 7.50 8.87 11.10 13.39 5.48 1.99 2.74 1.83 1.50 1.29 1.53 1.69
2 to 7 days 7.97 12.38 9.05 10.57 12.29 13.73 6.34 2.46 3.15 2.07 1.95 1.73 2.01 2.06
8 to 14 days 6.40 13.85 10.02 11.01 12.89 13.50 6.91 2.82 4.08 2.60 1.87 1.70 2.01 2.15
15 to 30 days 6.36 14.66 11.61 11.28 15.70 13.58 7.87 3.73 4.19 3.90 3.53 3.53 3.50 3.33
31 to 60 days 3.75 17.68 10.74 10.59 11.42 13.82 9.34 5.00 5.00 5.00 5.00 5.00 5.00 5.00
61 to 90 days 5.64 21.42 12.39 11.75 15.00 14.97 13.73 3.75 8.50 8.50 3.25 3.25 3.25 3.25
91 to 180 days 5.25 8.14 13.44 12.33 14.92 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00
181 days and above 7.30 7.30 11.42 13.46 12.94 12.94 12.94 12.94 12.94 12.94 12.94 12.94 12.94 12.94
Overall interbank cash market rate 7.82 11.90 7.92 9.12 11.23 13.47 6.00 2.21 3.74 4.72 5.59 5.54 5.60 5.69

2 Lombard rate 9.35 14.55 9.30 10.98 16.27 20.09 9.09 3.89 6.75 6.79 7.91 7.79 7.97 8.20

3 REPO rate 4.55 5.44 3.53 4.29 7.39 5.20 3.59 2.06 4.50 4.50 4.50 4.50 4.50 4.50

4 Reverse repo rate 5.29 22.85 14.67 6.30 4.49 4.06 4.18 5.66 5.12 5.09 5.25

5 Treasury bills rates

35 days 3.71 6.25 6.02 6.27 5.92 7.27 5.54 2.51 3.00 3.12 3.27 3.42 3.50 3.64
91 days 6.37 12.71 12.34 12.08 8.80 7.85 5.49 2.89 3.50 3.67 3.85 4.09 4.14 4.33
182 days 7.82 13.65 14.37 13.66 13.04 15.84 10.01 4.13 5.27 5.28 5.17 5.26 5.14 5.16
364 days 9.55 14.22 14.77 13.98 13.92 16.56 11.79 7.08 9.33 9.25 9.15 9.06 9.06 9.04
Overall treasury bills rate 8.31 13.64 14.22 13.56 12.91 16.17 11.10 6.43 8.54 8.73 8.67 8.20 8.58 8.69

6 Treasury bonds rates

2-years 9.61 14.73 14.63 14.65 14.78 17.44 14.52 9.42 11.39 11.39 11.39 11.97 11.97 11.97
5-years 11.69 15.13 14.84 15.36 15.15 17.79 15.78 11.64 12.00 12.71 12.71 12.71 12.96 12.96
7-years 13.09 14.88 15.54 15.62 16.60 17.69 16.31 12.62 12.56 13.23 13.23 13.23 13.23 13.23
10-years 14.01 15.33 15.41 16.34 17.14 18.11 16.79 14.39 14.94 14.94 15.11 15.11 15.11 15.70
15-years 16.65 17.38 17.71 18.85 17.54 14.69 15.46 15.46 15.62 15.62 15.62 15.74
20-years 17.70 17.73 17.45 17.45 17.45 17.39 17.39
7 Discount rate 8.48 12.00 12.33 16.00 16.00 16.00 11.42 8.17 7.00 7.00 7.00 7.00 7.00 7.00

8 Savings deposit rate 2.56 2.96 3.09 3.13 3.45 3.35 3.03 2.52 2.60 2.54 2.59 2.46 2.45 2.44

9 Overall time deposits rate 6.25 8.38 8.94 8.44 8.89 9.19 10.04 8.24 7.33 7.25 7.64 7.03 7.35 7.43
1 month 5.85 7.80 9.16 8.56 9.71 10.05 10.79 9.25 9.24 9.66 9.16 8.12 8.64 8.58
2 months 6.95 8.67 9.72 9.04 9.71 9.88 11.33 8.88 7.31 7.21 8.26 7.46 7.15 7.44
3 months 6.78 9.55 9.97 9.86 9.90 10.50 11.18 8.20 6.61 6.81 8.01 6.99 7.28 7.63
6 months 7.39 10.55 11.02 10.43 10.16 10.00 10.96 8.63 7.43 7.50 8.03 7.70 7.99 8.30
12 months 7.95 11.28 11.58 10.85 10.80 11.47 11.66 8.78 8.65 8.51 9.00 7.92 8.74 9.05
24 months 7.66 9.70 9.09 7.89 9.19 9.68 11.43 12.05 10.10 9.79 9.53 9.73 9.86 9.78

10 Negotiated deposit rate 8.44 9.85 10.51 10.70 10.29 11.47 11.78 9.53 8.85 9.13 8.84 9.15 8.65 8.84

11 Overall lending rate 14.96 15.56 15.86 16.29 16.10 15.96 17.77 17.42 17.21 16.80 17.23 17.24 17.20 16.86
Short-term (up to 1year) 14.55 14.18 14.04 14.70 14.25 13.66 18.30 18.21 17.00 16.38 17.47 16.94 17.07 16.43
Medium-term (1-2 years) 17.82 16.41 17.23 16.77 16.88 16.96 19.24 18.60 18.17 17.97 17.80 18.31 18.24 18.17
Medium-term (2-3 years) 14.47 15.86 16.54 16.44 16.52 16.04 17.69 17.48 17.76 17.32 18.98 17.97 17.82 17.56
Long-term (3-5 years) 14.81 16.03 15.74 16.17 15.34 15.60 17.94 17.41 17.07 16.88 16.84 16.70 17.13 16.58
Term Loans (over 5 years) 13.16 15.31 15.75 17.36 17.53 17.53 15.70 15.39 16.08 15.47 15.06 16.27 15.77 15.58

12 Negotiated lending rate 13.60 14.06 13.80 12.74 12.88 12.14 16.39 15.91 14.93 14.84 14.62 14.61 15.27 14.41

In Foreign currency
1 Deposits rates
Savings deposits rate 1.20 0.50 0.61 1.18 1.10 1.41 0.55 1.03 2.02 2.09 1.72 1.76 1.75 2.11
Overall time deposits rate 1.72 1.42 2.32 3.76 3.12 2.64 3.46 3.71 3.43 3.17 3.07 3.15 2.56 2.83
1-months 1.52 1.01 2.10 2.89 3.18 2.45 3.03 3.66 3.27 3.30 2.67 2.80 1.63 1.92
2-months 1.59 1.84 2.60 3.74 3.06 2.93 3.54 3.99 4.46 3.19 2.95 3.26 2.80 3.42
3-months 1.75 1.08 1.92 3.59 2.94 2.86 3.23 3.81 3.19 2.68 3.51 3.74 2.27 2.92
6-months 1.83 1.63 2.57 3.85 3.16 2.56 3.77 3.86 3.19 3.37 3.10 2.85 2.76 2.41
12-months 1.93 1.56 2.42 4.72 3.27 2.39 3.74 3.23 3.06 3.33 3.11 3.08 3.36 3.46

2 Overall lending rate 8.43 8.10 7.71 6.81 5.93 6.90 8.21 7.88 8.00 7.72 7.57 7.46 8.20 8.05
Short-term (up to 1year) 5.19 6.12 6.06 2.59 3.45 4.74 8.66 8.29 6.76 6.82 8.23 8.17 8.51 7.93
Medium-term (1-2 years) 9.83 9.07 8.20 8.25 6.75 7.84 7.80 7.89 8.38 8.20 5.91 5.39 8.41 8.39
Medium-term (2-3 years) 8.60 8.53 8.35 8.35 7.29 7.40 8.34 7.64 8.03 7.61 7.79 7.85 7.71 7.63
Long-term (3-5 years) 9.26 8.44 7.75 7.39 6.48 6.85 8.09 7.79 8.87 7.99 8.03 8.03 8.36 8.32
Term Loans (over 5 years) 9.26 8.35 8.19 7.42 5.68 7.67 8.16 7.78 7.98 7.97 7.87 7.87 7.99 7.99

Source: Bank of Tanzania, banks and Bank of Tanzania computations

223
 Bank of Tanzania Annual Report 2018/19

A4.0 Balance of Payments and Foreign Trade Statistics

Table A4.1: Balance of Payments
Millions of USD

Item 2012 2013 2014r 2015r 2016r 2017r 2018P

A. Current account -3,769.6 -4,988.5 -5,028.2 -3,987.4 -2,664.7 -1,813.9 -1,890.3
Goods: exports f.o.b. 5,889.2 5,258.1 5,194.1 5,316.8 4,949.7 4,523.9 4,379.6
Traditional 956.7 868.9 828.8 793.3 961.2 1,020.7 772.1
Non-traditional 4,164.4 3,703.3 3,798.6 4,040.1 3,538.5 3,091.9 3,209.3
o\w Gold 2,117.4 1,644.8 1,324.1 1,183.3 1,508.8 1,541.1 1,524.0
Unrecorded trade 768.2 685.8 566.8 483.3 450.0 411.3 398.1
Goods: imports f.o.b. -10,319.1 -11,029.1 -10,917.8 -9,843.1 -8,463.6 -7,551.7 -7,752.0
Balance on goods -4,429.9 -5,771.1 -5,723.7 -4,526.3 -3,513.9 -3,027.8 -3,372.4
Services: credit 2,786.4 3,201.7 3,396.0 3,412.4 3,599.3 3,831.9 4,014.7
Transport 641.1 811.8 902.6 1,024.9 1,053.6 1,137.4 1,222.1
Travel 1,712.7 1,880.4 2,010.1 1,902.0 2,131.6 2,250.3 2,449.4
Other 432.6 509.5 483.2 485.5 414.1 444.2 343.2
Services: debit -2,358.9 -2,488.5 -2,648.3 -2,629.1 -2,176.4 -2,039.9 -2,131.2
Transport -1,046.9 -1,137.8 -1,142.6 -1,047.0 -893.7 -795.7 -839.1
Travel -967.0 -1,033.9 -1,101.6 -1,195.3 -922.3 -807.3 -738.1
Other -344.9 -316.7 -404.1 -386.8 -360.4 -436.9 -554.1
Balance on services 427.5 713.2 747.7 783.3 1,422.9 1,792.0 1,883.4
Balance on goods and services -4,002.4 -5,057.9 -4,976.0 -3,743.0 -2,091.1 -1,235.8 -1,489.0
Primary income: credit 131.1 130.1 118.4 110.3 98.5 125.3 155.9
o/w Investment income 109.6 99.9 86.5 87.8 67.6 86.1 108.5
Compensation of employees 21.4 30.2 31.9 22.5 31.0 39.3 47.4
Primary income: debit -705.1 -835.8 -647.9 -834.6 -1,053.6 -1,105.4 -1,025.8
o/w Direct investment income -560.2 -617.0 -445.0 -550.0 -625.2 -700.0 -683.7
Interest payments -84.1 -148.2 -150.9 -248.6 -379.9 -358.0 -302.1
Compensation of employees -57.0 -67.9 -49.1 -33.2 -46.1 -45.0 -37.6
Balance on primary income -574.0 -705.7 -529.5 -724.3 -955.1 -980.1 -869.9
Balance on goods, services and primary income -4,576.4 -5,763.6 -5,505.5 -4,467.3 -3,046.2 -2,215.9 -2,358.8
Secondary income: credit 912.3 836.9 535.5 560.1 452.7 485.2 535.8
Government 543.6 485.2 177.9 194.8 81.1 121.8 170.3
o\w Miscelleneous current transfers (Multilateral HIPC relief) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Financial corporations, nonfinancial corporations, households and NPISHs 368.7 351.7 357.6 365.3 371.6 363.4 365.5
o/w Personal transfers 368.7 351.7 357.6 365.3 371.6 363.4 365.5
Secondary income: debit -105.4 -61.8 -58.2 -80.2 -71.2 -83.2 -67.3
Balance on secondary income 806.8 775.1 477.3 479.9 381.5 402.0 468.5
B. Capital account 777.2 684.5 547.9 380.1 446.2 376.8 221.2
Capital transfers credit 777.2 684.5 547.9 380.1 446.2 376.8 221.2
General government 713.6 620.9 483.7 316.1 383.0 313.6 157.4
Other capital transfer (Investment grant) 713.6 595.2 457.9 290.3 357.3 287.8 151.4
Financial corporations, nonfinancial corporations, households and NPISHs 63.6 63.6 64.2 64.0 63.2 63.2 63.8
Capital transfers:debit 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total, Groups A plus B -2,992.4 -4,304.0 -4,480.3 -3,607.3 -2,218.5 -1,437.1 -1,669.1
C. Financial account, excl. reserves and related items -3,879.6 -4,995.0 -3,109.0 -2,662.6 -1,745.4 -2,154.9 -1,741.3
Direct investments -1,799.6 -2,087.3 -1,416.1 -1,506.0 -864.0 -937.7 -1,056.0
Direct investment abroad 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Direct investment in Tanzania 1,799.6 2,087.3 1,416.1 1,506.0 864.0 937.7 1,056.0
Portfolio investment -6.1 -4.6 -11.5 -27.6 5.0 -2.9 0.7
Other investment -2,073.9 -2,903.1 -1,681.4 -1,128.9 -886.4 -1,214.2 -686.0
Assets -220.6 186.8 -28.8 331.8 -129.1 -117.8 363.3
Loans (Deposit-taking corporations, except the central bank) -37.2 0.1 -24.8 186.9 -95.8 -34.5 35.2
Currency and deposits -183.3 186.6 -3.9 144.9 -33.3 -83.4 328.0
Deposit-taking corporations, except the central bank -156.3 -20.7 -87.9 69.5 -150.1 -4.9 206.9
Other sectors -27.0 207.3 84.0 75.4 116.8 -78.5 121.1
Other assets 0.0 0.2 0.0 0.0 0.0 0.1 0.0
Liabilities 1,853.4 3,089.9 1,652.6 1,460.7 757.2 1,096.5 1,049.3
Trade credits 0.2 0.8 -1.0 -0.1 0.2 9.7 21.4
Loans 1,820.3 2,901.9 1,639.2 1,558.2 826.3 1,103.9 990.3
Monetary authority 0.0 0.0 0.0 0.0 0.0 0.0 0.0
General government 971.2 1,725.0 1,202.6 1,089.9 306.8 707.0 654.6
Drawings 1,022.8 1,834.4 1,367.7 1,309.4 779.0 1,238.8 1,361.1
Repayments -51.6 -109.4 -165.1 -219.5 -472.3 -531.9 -706.5
Deposit-taking corporations, except the central bank 30.6 188.5 14.6 97.3 209.2 176.1 -32.2
Other sectors 818.6 988.3 422.0 371.0 310.3 220.8 367.9
Drawings 872.3 1,070.6 494.5 547.4 453.3 318.9 467.6
Repayments -53.7 -82.3 -72.5 -176.4 -142.9 -98.1 -99.7
Currency and deposits 32.8 187.3 14.4 -97.5 -69.3 -17.1 37.6
Total, Groups A through C -6,872.0 691.0 -1,371.3 -944.7 -473.1 717.8 72.1
D. Net errors and omissions -561.1 -183.1 1,119.5 745.6 778.7 951.9 -856.2
Overall balance 326.2 507.9 -251.8 -199.1 305.5 1,669.6 -784.0
E. Reserves and related Items 326.2 507.9 -251.8 -199.1 305.5 1,669.6 -784.0
Reserve assets 324.7 621.4 -307.3 -273.7 232.2 1,598.7 -871.9
Use of Fund credit and loans 1.5 -113.5 55.5 74.6 73.3 70.9 87.9

Memorandum items:
GDP(mp) billions of TZS 62,318.7 72,977.2 82,603.4 94,349.3 108,362.3 118,744.5 129,364.4
GDP(mp) millions of USD 39,650.3 45,680.5 49,964.8 47,378.6 49,774.0 53,275.9 57,145.3
CAB/GDP -9.5 -10.9 -10.1 -8.4 -5.4 -3.4 -3.3
CAB/GDP (excl. current official transfers) -10.9 -12.0 -10.4 -8.8 -5.5 -3.6 -3.6
Gross official reserves 4,068.1 4,676.2 4,377.2 4,093.7 4,325.6 5,900.3 5,044.6
Months of imports 3.6 4.1 4.2 4.6 5.4 6.8 5.2
Months of Imports(Excluding FDI related imports) 4.1 4.5 4.7 4.9 5.9 7.5 5.7
Net International reserves (year end) 3,720.2 4,216.2 3,971.3 3,762.5 4,067.7 5,713.3 4,945.4
Change in net international reserves 325.0 496.0 -244.9 -208.8 305.2 1,645.6 -767.8
Exchange rate (TZS per USD) (end of period) 1,571.6 1,578.6 1,725.8 2,148.5 2,172.6 2,230.1 2,281.2
Exchange rate (TZS per USD) (annual average) 1,571.7 1,597.6 1,653.2 1,991.4 2,177.1 2,228.9 2,263.8
Source: Tanzania Revenue Authority, Bank of Tanzania, banks and Bank of Tanzania computations
Note: NPISH denontes non-profit institutions serving households; HIPC, heavily indebted poor countries; MDRI, multilateral debt relief initiative; GDP, gross domestic product; CAB, current account balance; FDI, foreign direct investment; r, revised data;
p, provisional data; and o/w, of which

224
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A4.0 Balance of Payments and Foreign Trade Statistics

Table A4.2: Balance of Payments
Million of TZS

2012 2013 2014r 2015r 2016r 2017r 2018P

A. Current account -5,918,263.1 -7,969,169.6 -8,327,794.7 -7,792,984.4 -5,799,454.1 -4,039,153.4 -4,257,777.0

Goods: exports f.o.b. 9,256,424.2 8,409,315.3 8,598,479.5 10,591,843.9 10,774,374.0 10,084,003.1 9,876,738.3
Traditional 1,503,262.3 1,389,587.9 1,378,762.2 1,566,838.6 2,090,239.1 2,273,932.8 1,740,028.2
Non-traditional 6,545,802.2 5,922,860.2 6,284,236.2 8,062,110.5 7,704,646.4 6,893,342.7 7,238,824.8
o\w Gold 3,328,492.2 2,629,505.9 2,186,964.9 2,350,753.8 3,285,086.6 3,435,296.9 3,438,466.2
Unrecorded trade 1,207,359.7 1,096,867.2 935,481.1 962,894.9 979,488.5 916,727.6 897,885.3
Goods: imports f.o.b. -16,218,392.2 -17,640,018.8 -18,049,034.8 -19,447,709.9 -18,426,144.5 -16,834,141.5 -17,486,690.7
Balance on goods -6,961,968.0 -9,230,703.5 -9,450,555.3 -8,855,866.0 -7,651,770.5 -6,750,138.4 -7,609,952.4
Services: credit 4,379,332.8 5,123,127.4 5,622,864.2 6,803,828.9 7,834,717.1 8,541,362.9 9,058,301.8
Transport 1,007,622.6 1,298,162.9 1,492,292.5 2,037,945.1 2,293,626.3 2,543,705.5 2,768,202.1
Travel 2,691,792.6 3,009,878.0 3,330,524.4 3,805,602.7 4,639,536.1 5,015,885.1 5,527,942.4
Other 679,917.7 815,086.6 800,047.4 960,281.1 901,554.7 981,772.2 762,157.2
Services: debit -3,707,420.2 -3,979,539.6 -4,413,285.5 -5,227,548.3 -4,738,237.5 -4,547,618.3 -4,807,029.7
Transport -1,645,429.1 -1,819,937.1 -1,923,520.6 -2,068,777.9 -1,945,667.0 -1,784,100.4 -1,903,335.5
Travel -1,519,837.2 -1,653,136.6 -1,821,701.5 -2,387,889.8 -2,007,847.7 -1,799,550.8 -1,663,394.2
Other -542,153.9 -506,465.9 -668,063.4 -770,880.6 -784,722.8 -963,967.1 -1,240,299.9
Balance on services 671,912.6 1,143,587.9 1,209,578.7 1,576,280.6 3,096,479.6 3,993,744.6 4,251,272.1
Balance on goods and services -6,290,055.4 -8,087,115.7 -8,240,976.6 -7,279,585.4 -4,555,290.9 -2,756,393.8 -3,358,680.3
Primary income: credit 205,970.9 207,963.6 195,348.9 217,069.0 214,496.6 279,457.6 352,120.1
o/w Investment income 172,280.1 159,717.5 142,789.3 172,542.7 147,054.7 191,878.5 244,901.4
Compensation of employees 33,690.8 48,246.0 52,559.6 44,526.4 67,441.9 87,579.1 107,218.6
Primary income: debit -1,102,271.4 -1,332,024.1 -1,071,712.5 -1,661,276.9 -2,288,941.7 -2,458,385.4 -2,309,309.3
o/w Direct investment income -880,492.3 -986,403.8 -740,643.4 -1,091,981.8 -1,361,168.9 -1,560,200.3 -1,542,290.3
Interest payments -132,275.5 -236,949.3 -249,957.7 -503,628.6 -827,342.4 -797,842.4 -682,224.4
Compensation of employees -89,503.6 -108,670.9 -81,111.4 -65,666.5 -100,430.5 -100,342.6 -84,794.7
Balance on primary income -896,300.5 -1,124,060.5 -876,363.6 -1,444,207.8 -2,074,445.1 -2,178,927.8 -1,957,189.3
Balance on goods, services and primary income -7,186,355.9 -9,211,176.2 -9,117,340.2 -8,723,793.2 -6,629,736.1 -4,935,321.6 -5,315,869.6
Secondary income: credit 1,433,812.3 1,340,734.3 885,759.8 1,088,394.7 985,394.0 1,081,601.1 1,209,536.9
Government 854,367.0 778,344.4 294,945.5 364,348.3 176,445.7 271,716.3 385,057.5
o\w Miscelleneous current transfers (Multilateral HIPC relief) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Financial corporations, nonfinancial corporations, households and NPISHs 579,445.4 562,389.9 590,814.4 724,046.4 808,948.3 809,884.8 824,479.4
o/w Personal transfers 579,445.4 562,389.9 590,814.4 724,046.4 808,948.3 809,884.8 824,479.4
Secondary income: debit -165,719.5 -98,727.8 -96,214.4 -157,585.9 -155,112.0 -185,433.0 -151,444.4
Balance on secondary income 1,268,092.8 1,242,006.5 789,545.4 930,808.8 830,282.0 896,168.2 1,058,092.6
B. Capital account 1,221,548.3 1,054,715.0 863,374.9 710,667.9 914,752.7 782,943.8 483,766.7
Capital transfers credit 1,221,548.3 1,054,715.0 863,374.9 710,667.9 914,752.7 782,943.8 483,766.7
General government 1,121,587.7 953,039.9 757,208.5 583,686.3 777,228.5 642,148.1 339,841.1
Other capital transfer (Investment grant) 1,121,587.7 953,039.9 757,208.5 583,686.3 777,228.5 642,148.1 339,841.1
Financial corporations, nonfinancial corporations, households and NPISHs 99,960.6 101,675.1 106,166.4 126,981.6 137,524.2 140,795.7 143,925.5
Capital transfers:debit 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total, Groups A plus B -4,696,714.8 -6,914,454.6 -7,464,419.8 -7,082,316.5 -4,884,701.3 -3,256,209.6 -3,774,010.3
C. Financial account, excl. reserves and related items -6,097,371.2 -7,980,472.3 -5,151,483.8 -5,217,962.3 -3,800,604.6 -4,801,763.7 -3,935,733.7
Direct investments -2,828,517.4 -3,336,830.2 -2,340,094.7 -2,982,053.3 -1,881,074.7 -2,089,999.8 -2,382,132.3
Direct investment abroad 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Direct investment in Tanzania 2,828,517.4 3,336,830.2 2,340,094.7 2,982,053.3 1,881,074.7 2,089,999.8 2,382,132.3
Portfolio investment -9,512.5 -7,240.4 -19,161.9 -56,049.9 10,908.7 -6,361.1 1,581.1
Other investment -3,259,341.4 -4,636,401.7 -2,792,227.3 -2,179,859.1 -1,930,438.6 -2,705,402.8 -1,555,182.5
Assets -345,653.4 299,641.1 -53,766.9 611,861.9 -280,829.1 -262,014.3 822,766.9
Loans (Deposit-taking corporations, except the central bank) -58,431.4 855.9 -41,447.7 342,308.0 -208,847.5 -77,262.9 76,797.8
Currency and deposits -287,222.0 298,785.2 -12,319.2 269,553.9 -71,981.5 -184,751.3 745,969.1
Deposit-taking corporations, except the central bank -244,992.0 -31,764.2 -147,196.5 114,577.6 -326,388.5 -9,719.4 472,787.7
Other sectors -42,229.9 330,549.4 134,877.2 154,976.3 254,407.0 -175,031.9 273,181.3
Other assets 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Liabilities 2,913,688.0 4,936,042.8 2,738,460.4 2,791,721.0 1,649,609.6 2,443,388.6 2,377,949.4
Trade credits 304.4 1,236.3 -1,660.6 -187.6 458.3 21,331.8 48,900.0
Loans 2,861,779.1 4,636,904.0 2,716,561.8 3,004,948.5 1,800,415.9 2,460,828.5 2,243,998.7
Monetary authority 0.0 0.0 0.0 0.0 0.0 0.0 0.0
General government 1,527,178.7 2,755,420.0 1,999,212.8 2,121,565.4 668,858.4 1,575,810.3 1,480,475.9
Drawings 1,608,295.6 2,930,650.9 2,273,937.0 2,568,628.4 1,696,354.5 2,762,519.3 3,075,428.3
Repayments -81,116.9 -175,230.9 -274,724.2 -447,062.9 -1,027,496.1 -1,186,709.0 -1,594,952.4
Deposit-taking corporations, except the central bank 48,139.3 302,291.7 23,859.5 205,797.7 455,164.5 392,374.7 -62,726.8
Other sectors 1,286,461.1 1,579,192.3 693,489.4 677,585.4 676,393.0 492,643.4 826,249.7
Drawings 1,370,862.3 1,709,494.0 814,105.9 1,050,069.4 987,905.0 711,287.3 1,051,110.0
Repayments -84,401.2 -130,301.7 -120,616.5 -372,484.0 -311,511.9 -218,643.9 -224,860.3
Currency and deposits 51,604.5 297,902.5 23,559.2 -213,039.9 -151,264.6 -38,771.7 85,050.7
Total, Groups A through C -10,794,086.0 -14,894,927.0 -12,615,903.6 -12,300,278.8 -8,685,306.0 -8,057,973.4 -7,709,744.1
D. Net errors and omissions -888,143.8 -250,773.3 1,910,019.6 1,524,341.5 1,747,817.0 2,179,050.8 -1,929,762.5
Overall balance 512,512.6 815,244.4 -402,916.4 -340,012.7 663,720.3 3,724,604.9 -1,768,039.1
E. Reserves and related Items 512,512.6 815,244.4 -402,916.4 -340,012.7 663,720.3 3,724,604.9 -1,768,039.1
Reserve assets 510,118.3 995,498.6 -496,720.3 -490,576.3 504,133.7 3,566,307.5 -1,966,358.8
Use of Fund credit and loans 2,394.3 -180,254.2 93,803.8 150,563.6 159,586.5 158,297.4 198,319.6

Memorandum items:
GDP(mp) Billions of TZS 62,318.7 72,977.2 82,603.4 94,349.3 108,362.3 118,744.5 129,364.4
GDP(mp) Millions of USD 39,650.3 45,680.5 49,964.8 47,378.6 49,774.0 53,275.9 57,145.3
CAB/GDP -9.5 -10.9 -10.1 -8.4 -5.4 -3.4 -3.3
CAB/GDP (excl. current official transfers) -10.9 -12.0 -10.4 -8.8 -5.5 -3.6 -3.6
Gross official reserves (Millions of USD) 4,068.1 4,676.2 4,377.2 4,093.7 4,325.6 5,900.3 5,044.6
Months of imports 3.6 4.1 4.2 4.6 5.4 6.8 5.2
Net international reserves (year end)(Millions of USD) 3,720.2 4,216.2 3,971.3 3,762.5 4,067.7 5,713.3 4,945.4
Change in net international reserves (Millions of USD) 325.0 496.0 -244.9 -208.8 305.2 1,645.6 -767.8
Exchange rate (TZS per USD) (end of period) 1,571.6 1,578.6 1,725.8 2,148.5 2,172.6 2,230.1 2,281.2
Exchange rate (TZS per USD) (annual average) 1,571.7 1,597.6 1,653.2 1,991.4 2,177.1 2,228.9 2,263.8

Source: Tanzania Revenue Authority, Bank of Tanzania, banks and Bank of Tanzania computations

Note: NPISH denontes non-profit institutions serving households; HIPC, heavily indebted poor countries; MDRI, multilateral debt relief initiative; GDP, gross domestic product; CAB, current account balance; FDI, foreign direct investment; r, revised data; p, provisional data; and o/w, of which

225
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A4.0 Balance of Payments and Foreign Trade Statistics

Table A4.3: Exports by Type of Commodity

r r P
Commodity Unit 2012 2013 2014 2015 2016 2017 2018
Traditional exports:
Coffee
Value Millions of USD 186.6 171.0 121.5 162.2 153.7 126.3 147.9
Volume '000' Tonnes 54.8 59.5 44.1 51.9 58.7 41.8 56.6
Unit price USD/Tonne 3,403.2 2,872.7 2,756.2 3,123.0 2,616.8 3,019.5 2,612.0
Cotton
Value Millions of USD 164.9 111.7 54.7 30.2 46.8 36.8 68.4
Volume '000' Tonnes 132.0 89.0 49.5 29.1 33.0 25.3 47.4
Unit price USD/Tonne 1,249.7 1,256.0 1,104.9 1,037.8 1,416.1 1,450.3 1,444.2
Sisal
Value Millions of USD 18.4 16.9 16.8 26.5 17.2 28.7 32.5
Volume '000' Tonnes 13.5 12.6 11.5 15.2 8.6 17.0 20.3
Unit price USD/Tonne 1,357.1 1,341.6 1,459.7 1,748.8 2,002.1 1,686.7 1,604.5
Tea
Value Millions of USD 56.1 56.9 45.7 44.0 44.8 49.1 45.9
Volume '000' Tonnes 27.2 28.8 29.2 27.5 26.3 27.5 26.9
Unit price USD/Tonne 2,061.2 1,977.9 1,568.1 1,600.9 1,700.8 1,783.6 1,707.4
Tobacco
Value Millions of USD 350.1 307.0 315.0 287.6 339.2 195.8 270.3
Volume '000' Tonnes 100.6 67.8 67.4 66.3 74.3 48.3 72.2
Unit price USD/Tonne 3,480.9 4,526.1 4,673.5 4,336.5 4,562.7 4,055.6 3,741.9
Cashwenuts
Value Millions of USD 142.6 162.4 222.2 218.8 320.2 529.6 196.5
Volume '000' Tonnes 130.9 147.3 172.2 171.7 217.5 329.4 120.2
Unit price USD/Tonne 1,089.3 1,102.5 1,290.7 1,273.8 1,472.4 1,607.7 1,634.2
Cloves
Value Millions of USD 38.1 43.0 52.9 24.1 39.3 54.4 10.5
Volume '000' Tonnes 3.4 4.1 4.7 2.8 4.9 6.9 1.3
Unit price USD/Tonne 11,198.5 10,562.8 11,231.3 8,653.1 7,976.0 7,886.6 8,031.7
Sub-Total Millions of USD 956.7 868.9 828.8 793.3 961.2 1,020.7 772.1
Non-traditional exports:
Minerals Millions of USD 2,197.8 1,782.1 1,469.2 1,285.4 1,930.0 1,694.5 1,615.3
Manufactured goods Millions of USD 1,037.3 1,072.1 1,239.6 1,277.0 714.2 693.7 794.6
Other exports Millions of USD 929.2 849.1 1,089.8 1,487.0 894.3 703.7 799.5
Sub-Total Millions of USD 4,164.4 3,703.3 3,798.6 4,049.3 3,538.5 3,091.9 3,209.3
Grand Total Millions of USD 5,121.1 4,572.2 4,627.4 4,842.7 4,499.7 4,112.7 3,981.4
Source: Tanzania Revenue Authority and Bank of Tanzania computations
Note: Figures do not include adjustments of unrecorded trade; r denotes revised data; and p, provisional data

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A4.0 Balance of Payments and Foreign Trade Statistics

Table A4.4: Exports by Type of Commodity

r r P
Commodity Unit 2012 2013 2014 2015 2016 2017 2018

Traditional exports:

Coffee

Value Millions of TZS 293,256.4 272,369.1 200,916.3 315,921.2 334,603.0 280,454.6 337,039.2

Volume '000' Tonnes 54.8 59.5 44.1 51.9 58.7 41.8 56.6

Unit price TZS/Tonne 5,347,916.1 4,575,966.3 4,559,364.9 6,084,326.5 5,697,005.7 6,705,580.0 5,950,960.3

Cotton

Value Millions of TZS 259,069.4 178,686.5 90,901.3 62,958.7 101,792.1 81,643.0 155,810.8

Volume '000' Tonnes 132.0 89.0 49.5 29.1 33.0 25.3 47.4

Unit price TZS/Tonne 1,963,005.7 2,008,713.5 1,835,633.0 2,164,592.3 3,082,923.4 3,220,891.9 3,290,286.7

Sisal

Value Millions of TZS 28,871.7 27,093.3 27,688.8 53,926.7 37,509.0 63,814.1 74,146.3

Volume '000' Tonnes 13.5 12.6 11.5 15.2 8.6 17.0 20.3

Unit price TZS/Tonne 2,132,982.2 2,147,195.5 2,411,434.5 3,554,123.8 4,358,641.1 3,745,807.0 3,655,500.3

Tea

Value Millions of TZS 88,106.6 90,767.9 75,367.7 86,284.9 97,511.7 109,118.2 104,677.0

Volume '000' Tonnes 27.2 28.8 29.2 27.5 26.3 27.5 26.9

Unit price TZS/Tonne 3,239,196.5 3,154,655.1 2,585,109.6 3,139,967.8 3,702,856.0 3,960,976.3 3,890,040.4

Tobacco

Value Millions of TZS 550,106.4 492,182.0 523,502.1 568,812.1 738,457.3 434,842.1 615,828.1

Volume '000' Tonnes 100.6 67.8 67.4 66.3 74.3 48.3 72.2

Unit price TZS/Tonne 5,470,229.9 7,255,844.3 7,767,751.7 8,576,002.1 9,933,315.8 9,006,727.2 8,525,233.2

Cashwenuts

Value Millions of TZS 224,005.3 258,301.8 373,393.1 430,022.9 697,192.3 1,176,135.4 447,609.6

Volume '000' Tonnes 130.9 147.3 172.2 171.7 217.5 329.4 120.2

Unit price TZS/Tonne 1,711,386.7 1,753,532.2 2,168,547.0 2,503,867.4 3,205,454.1 3,570,323.5 3,723,121.0

Cloves

Value Millions of TZS 59,839.5 68,643.6 86,993.0 48,912.0 85,519.6 120,802.3 23,980.3

Volume '000' Tonnes 3.4 4.1 4.7 2.8 4.9 6.9 1.3

Unit price TZS/Tonne 17,599,846.9 16,878,198.7 18,454,571.6 17,576,079.7 17,364,390.9 17,514,388.7 18,298,572.0

Sub-total Millions of TZS 1,503,255.3 1,388,044.3 1,378,762.2 1,566,838.6 2,092,585.0 2,266,809.6 1,759,091.3

Non-traditional exports:

Minerals Millions of TZS 3,454,842.1 2,847,166.2 2,426,673.1 2,559,719.4 4,201,780.7 3,763,090.3 3,680,021.8

Manufactured goods Millions of TZS 1,630,482.9 1,714,057.1 2,053,039.5 2,542,918.0 1,554,855.7 1,540,631.0 1,810,248.8

Other exports Millions of TZS 1,460,432.9 1,357,912.8 1,804,523.7 2,961,161.3 1,946,980.1 1,562,815.1 1,821,531.4

Sub-total Millions of TZS 6,545,757.9 5,919,136.1 6,284,236.2 8,063,798.7 7,703,616.5 6,866,536.4 7,311,802.0

Grand total Millions of TZS 8,049,013.2 7,307,180.3 7,662,998.4 9,630,637.3 9,796,201.5 9,133,346.0 9,070,893.3
Source: Tanzania Revenue Authority and Bank of Tanzania computations
Note: Figures do not include adjustments of unrecorded trade; r denotes revised data; and p, provisional data

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Table A4.5: Imports (f.o.b) by Major Commodity Groups

Millions of USD
r r P
Commodity 2012 2013 2014 2015 2016 2017 2018

C apital goods 3,686.5 3,460.4 3,598.1 3,813.0 3,843.3 2,954.3 3,091.2

Transport equipment 1,158.2 1,160.2 1,214.8 1,096.5 997.4 762.8 878.4
Building and construction 805.8 959.8 1,032.4 908.0 898.0 639.3 840.3
Machinery 1,722.5 1,340.5 1,351.0 1,808.4 1,947.8 1,552.1 1,372.5
Intermediate goods 4,320.2 5,205.2 4,663.6 3,696.6 3,146.4 2,971.9 2,549.8
Oil 3,380.6 4,308.6 3,656.8 2,760.7 1,986.4 2,033.6 1,613.2
Fertilizers 133.9 160.1 122.8 145.6 130.3 137.2 176.5
Industrial raw materials 805.7 736.6 884.0 790.4 1,029.7 801.0 760.2
Consumer goods 2,312.5 2,363.5 2,656.1 2,333.5 2,311.0 2,372.4 2,111.0
Food and food stuffs 656.6 646.4 632.6 541.7 489.5 445.4 264.3
All other consumer goods 1,655.9 1,717.1 2,023.4 1,791.8 1,821.5 1,927.1 1,846.7
Total 10,319.1 11,029.1 10,917.8 9,843.1 9,300.7 8,298.6 7,752.0
Source: Tanzania Revenue Authority and Bank of Tanzania computations
Note: r denoted revised data; and p, provisional data

Table A4.6: Imports (f.o.b) by Major Commodity Groups

Million of TZS
P
Commodity 2012 2013 2014 2015 2016 2017 2018

Capital goods 5,793,811.7 5,535,619.4 5,958,684.4 7,496,994.4 7,614,357.6 5,991,925.5 6,972,971.7

Transport equipment 1,820,243.0 1,856,198.9 2,009,435.2 2,158,354.4 1,975,936.4 1,547,780.6 1,981,571.9

Building and construction 1,266,332.5 1,535,747.9 1,708,047.0 1,792,571.4 1,779,442.5 1,296,589.5 1,895,457.4

Machinery 2,707,236.3 2,143,672.6 2,241,202.2 3,546,068.6 3,858,978.7 3,147,555.4 3,095,942.4

Intermediate goods 6,790,052.2 8,324,816.4 7,699,792.0 7,325,726.0 6,233,028.3 6,029,510.7 5,751,754.9

Oil 5,313,589.9 6,889,198.8 6,031,398.4 5,459,147.5 3,934,604.9 4,125,809.1 3,638,955.1

Fertilizers 210,328.2 256,817.4 205,157.4 300,784.1 258,071.1 278,430.2 398,033.6

Industrial raw materials 1,266,134.2 1,178,800.1 1,463,236.2 1,565,794.4 2,040,352.3 1,625,271.4 1,714,766.2

Consumer goods 3,634,528.3 3,779,583.1 4,390,558.4 4,624,989.5 4,578,758.7 4,812,705.3 4,761,964.2

Food and food stuffs 1,031,846.1 1,032,264.4 1,044,754.6 1,053,778.9 970,115.6 902,932.7 596,265.9

All other consumer goods 2,599,249.5 2,743,827.2 3,342,194.8 3,566,874.5 3,603,888.4 3,909,772.5 4,165,698.3

Total 16,218,392.2 17,640,018.8 18,049,034.8 19,447,709.9 18,426,144.5 16,834,141.5 17,486,690.7

Source: Tanzania Revenue Authority and Bank of Tanzania computations
Note: p denotes provisional data

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Table A4.7: Imports(c.i.f) by Major Commodity Groups

Million of TZS
r r P
Commodity 2012 2013 2014 2015 2016 2017 2018

Capital goods 6,366,826.0 6,083,098.2 6,548,004.8 8,238,455.4 8,367,425.9 6,584,533.5 7,662,606.2

Transport equipment 2,000,267.0 2,039,779.0 2,208,170.5 2,371,818.0 2,171,358.7 1,700,857.8 2,177,551.5

Building and construction 1,391,574.1 1,687,635.1 1,876,974.7 1,969,858.7 1,955,431.4 1,424,823.6 2,082,920.2

Machinery 2,974,984.9 2,355,684.2 2,462,859.6 3,896,778.7 4,240,635.9 3,458,852.1 3,402,134.6

Intermediate goods 7,461,595.8 9,148,149.9 8,461,309.9 8,050,248.3 6,849,481.6 6,625,835.9 6,320,609.8

Oil 5,839,109.8 7,570,548.1 6,627,910.3 5,999,063.1 4,323,741.6 4,533,856.1 3,998,851.8

Fertilizers 231,129.8 282,217.0 225,447.7 330,531.9 283,594.6 305,967.3 437,399.5

Industrial raw materials 1,391,356.2 1,295,384.8 1,607,951.9 1,720,653.2 2,242,145.4 1,786,012.5 1,884,358.4

Consumer goods 3,990,215.0 4,149,551.2 4,820,823.5 5,077,641.1 5,026,378.0 5,288,687.1 5,232,927.7

Food and food stuffs 1,133,896.8 1,134,356.4 1,148,081.9 1,157,998.8 1,066,061.1 992,233.8 655,237.2

All other consumer goods 2,856,318.2 3,015,194.7 3,672,741.5 3,919,642.4 3,960,316.9 4,296,453.3 4,577,690.4

Total 17,818,636.9 19,380,799.3 19,830,138.2 21,366,344.8 20,243,285.5 18,499,056.5 19,216,143.7

Source: Tanzania Revenue Authority and Bank of Tanzania computations

Note: p denotes provisional data; and r, revised data

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Table A4.8: Exports by Country of Destination

Millions of TZS
p
2012 2013 2014 2015 2016 2017 2018

Australia 22,196.4 12,313.2 101,079.0 8,977.4 16,497.0 10,305.2 8,757.7

Belgium 238,009.8 139,157.6 163,403.8 295,288.5 616,178.6 429,842.1 541,542.4
Burundi 72,026.5 71,932.8 71,138.1 77,673.3 113,462.1 113,236.4 107,876.7
Canada 39,683.0 20,603.7 11,691.1 11,826.1 10,146.7 8,110.8 15,644.1
China 817,984.8 491,708.1 1,130,503.4 1,112,872.5 770,945.5 316,022.0 325,410.2
Democratic Republic of Congo 285,425.7 377,511.6 465,278.5 392,428.4 634,887.1 2,693.6 304,104.7
Denmark 16,811.9 14,590.1 12,403.3 5,465.7 8,497.9 8,479.8 6,164.7
Eire/Ireland 2,912.8 538.2 280.2 1,332.1 2,561.9 1,375.5 1,019.6
France 25,291.3 18,755.4 39,817.2 27,798.9 51,990.3 30,351.3 47,613.1
Germany 455,746.3 255,313.4 366,846.8 446,692.3 250,990.0 108,583.0 90,670.3
Hong Kong 36,367.4 48,539.3 58,897.4 67,259.7 65,326.8 96,193.9 87,992.7
India 748,938.4 1,195,300.6 2,073,771.5 2,274,810.2 1,530,006.5 2,182,438.4 1,654,380.5
Indonesia 63,764.2 52,906.6 10,978.5 12,730.5 37,421.7 32,286.1 52,232.8
Italy 78,750.3 91,194.1 86,826.8 71,182.1 91,726.5 80,982.8 63,103.4
Japan 466,079.8 351,502.9 409,634.7 456,063.2 301,495.8 165,609.9 150,121.0
Kenya 520,143.0 362,976.2 737,131.7 1,452,035.1 683,147.8 390,644.5 482,237.3
Malaysia 15,423.3 2,150.0 21,736.3 57,758.0 28,474.5 21,933.6 18,717.7
Mozambique 83,499.8 106,149.0 112,551.9 37,020.8 26,853.8 29,088.9 15,378.5
Netherland 177,033.8 99,719.7 84,386.0 151,448.3 139,050.4 159,738.9 171,865.9
New Zealand 4,902.4 4,355.0 4,027.9 4,406.9 12,185.9 6,614.0 7,511.1
Norway 29,027.4 6,322.7 6,854.1 2,845.3 1,735.6 1,048.6 1,548.7
Pakistan 51,882.0 12,828.7 23,939.3 39,380.7 32,338.0 26,920.3 68,689.8
Portugal 19,820.8 22,727.6 29,981.2 38,792.5 41,004.1 43,820.8 46,677.9
Singapore 38,225.8 89,063.7 26,318.3 13,112.3 22,835.8 12,083.4 6,374.6
Somalia 1,637.0 931.2 11,043.1 5,528.6 845.8 2,885.5 2,188.6
South Africa 1,521,227.4 1,215,008.1 1,139,124.7 1,336,621.1 1,374,237.3 1,553,437.7 1,662,185.7
Spain 25,753.9 34,083.8 23,582.6 37,034.6 34,109.8 44,945.3 37,521.1
Sri Lanka 2,244.1 3,896.9 3,425.4 3,472.0 1,685.4 3,489.5 1,630.9
St. Helena 25.4 5.9 n.a 1.9 0.0 n.a 4,613.6
Sweden 8,235.1 7,939.7 8,717.9 10,228.5 12,116.0 12,751.1 7,158.2
Switzerland 1,245,696.8 643,133.7 246,227.3 304,642.7 1,671,353.8 584,189.5 584,262.2
Taiwan 1,804.8 1,710.3 3,199.9 4,370.1 4,631.0 2,467.3 2,279.1
Thailand 56,213.6 24,537.0 23,882.7 13,119.9 19,602.7 20,571.3 26,256.5
Uganda 103,386.6 105,601.3 121,218.9 99,881.8 126,744.3 53,630.2 238,736.7
United Arab Emirates 148,006.1 134,552.8 141,266.4 311,846.4 138,158.3 195,628.3 193,172.5
United Kingdom 71,042.2 88,113.3 77,063.2 45,600.3 49,680.8 40,385.9 35,146.3
United States 105,008.4 96,596.2 236,429.6 100,478.9 123,788.9 138,266.7 135,781.2
USSR/Russia 16,698.1 14,605.1 11,893.8 23,085.4 24,124.3 25,306.6 29,431.2
Yugoslavia 12.6 3.4 n.a n.a n.a n.a 0.5
Zambia 112,288.0 144,886.8 223,715.6 12,439.8 70,815.5 108,312.3 114,266.0
Others 1,527,138.4 2,039,491.8 121,218.9 2,099,249.4 1,177,626.0 1,558,750.8 915,499.4
Total 9,256,365.1 8,403,257.4 8,441,486.8 11,466,802.3 10,319,280.3 8,623,421.6 8,265,765.1

Source: Tanzania Revenue Authority and Bank of Tanzania computations

Note: n.a denotes not available; and p, provisional data

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Table A4.9: Imports (c.i.f) by Country of Origin

Millions of TZS

P
2012 2013 2014 2015 2016 2017 2018

Argentina 192,859.5 26,237.5 12,161.6 34,528.6 15,396.7 53,566.3 7,404.0

Australia 193,689.0 242,942.6 234,399.6 205,934.2 140,445.7 145,777.0 143,092.6
Belgium 345,750.8 211,513.0 209,888.8 126,911.5 141,386.8 145,082.2 145,938.3
Brazil 90,275.9 22,395.4 24,474.9 33,932.0 60,629.3 117,490.9 45,347.0
Burundi 6,066.4 2,442.9 931.7 2,121.6 1,685.9 521.3 2,338.3
Canada 174,316.9 146,754.9 204,485.0 119,613.3 219,588.3 88,587.0 78,924.1
China 1,814,049.4 2,307,786.8 2,597,174.8 3,700,358.4 3,566,894.8 3,359,881.1 4,009,049.4
Democratic Republic of Congo 1,414.0 159.1 1,363.1 1,253.4 777.8 26.5 1,270.7
Denmark 42,975.4 72,628.2 69,106.6 131,738.8 88,470.6 95,621.2 81,594.1
Eire/Ireland 26,989.4 28,049.0 33,185.5 34,145.3 49,507.2 97,424.2 53,061.1
Finland 35,449.7 51,361.4 98,655.9 100,078.5 75,557.7 165,736.8 98,624.7
France 169,788.8 149,508.5 119,670.3 190,060.6 147,168.2 150,288.2 233,609.7
Germany, Federal 292,440.9 259,534.0 410,142.0 320,148.4 417,265.8 518,787.6 500,917.7
Hong Kong 83,187.0 52,326.9 87,939.5 90,589.6 112,306.3 114,845.3 136,597.6
India 1,373,732.4 3,338,640.8 3,055,855.5 2,512,648.4 3,110,402.5 2,610,263.5 2,769,670.5
Indonesia 370,583.0 225,874.9 154,768.5 283,642.9 140,724.0 321,368.7 302,371.7
Iran 73,137.1 53,377.7 68,651.6 33,583.1 22,956.9 39,373.5 56,950.3
Italy 182,804.2 120,370.8 131,665.5 157,773.8 190,834.7 200,995.1 218,608.4
Japan 808,560.1 746,172.6 924,642.3 790,187.5 807,663.4 919,901.8 905,518.5
Kenya 880,188.6 485,305.3 1,082,171.5 473,678.2 582,864.0 450,305.1 563,073.5
Malaysia 137,851.0 169,009.7 640,615.2 337,162.5 567,020.1 413,982.8 338,947.2
Mexico 1,713.9 1,757.3 4,545.3 14,677.5 10,474.7 13,742.2 18,374.1
Mozambique 17,471.4 106,893.9 30,332.7 66,075.2 26,026.9 20,677.0 54,600.4
Netherlands 248,542.6 198,353.3 291,741.5 189,505.4 229,584.5 189,519.6 193,776.4
New Zealand 3,862.6 4,829.0 4,765.7 7,697.3 7,841.0 6,375.3 7,638.4
Norway 92,221.8 44,249.2 73,186.9 9,426.9 15,286.5 26,402.1 189,274.7
Pakistan 122,635.0 141,018.2 101,623.6 80,888.7 70,138.4 52,770.7 89,766.7
Portugal 2,836.0 3,303.1 3,302.8 7,432.8 6,873.7 17,729.5 20,212.2
Saudi Arabia 360,197.8 322,950.3 338,854.5 4,019,058.6 479,693.6 1,051,617.0 1,292,481.2
Singapore 230,638.6 320,814.0 64,838.3 183,597.9 114,593.1 137,796.8 68,791.5
Somalia 10.2 0.0 86.2 850.6 0.0 0.0 0.0
South Africa 1,458,335.4 1,055,182.9 997,245.1 1,020,625.9 1,027,974.0 929,196.2 994,807.6
South Korea 186,529.9 234,827.3 269,999.3 450,276.3 359,878.9 315,035.1 1,569.0
Spain 73,332.5 213,692.8 55,883.5 63,214.4 68,590.7 78,248.8 83,651.9
Sri Lanka 5,430.4 7,130.7 40,385.7 21,419.7 7,042.3 7,662.1 12,317.8
Swaziland 54,770.3 54,305.6 77,929.3 74,138.8 89,699.7 83,154.4 87,520.8
Sweden 172,910.7 137,476.9 183,423.1 118,880.7 150,179.9 79,281.9 125,422.4
Switzerland 2,467,204.2 2,345,496.8 2,149,399.6 856,409.2 282,505.4 460,663.2 282,235.4
Taiwan 45,242.7 48,598.1 60,397.8 108,871.2 57,670.2 63,698.2 55,172.4
Thailand 118,265.0 133,003.5 173,054.1 183,744.2 171,077.9 205,054.4 268,363.9
Turkey 185,925.6 174,537.4 235,892.7 156,801.2 142,329.6 172,912.4 388,657.8
Uganda 169,013.6 83,917.6 79,316.6 78,309.9 66,848.5 76,481.8 119,947.2
United Arab Emirate 1,600,011.8 1,725,479.7 1,942,477.8 1,674,224.8 1,289,428.3 1,326,921.8 1,983,145.0
United Kingdom 574,249.3 401,153.7 434,709.8 361,532.2 337,544.4 293,230.7 361,990.0
United States 372,948.8 338,829.0 611,264.6 641,744.2 548,576.0 452,137.7 540,782.3
USSR/Russia 127,112.8 105,582.3 212,300.0 245,853.9 233,773.9 280,119.3 140,145.4
Yugoslavia 1.0 1.4 0.0 0.3 n.a n.a 0.0
Zambia 62,753.6 73,899.6 104,719.7 64,729.4 72,926.8 120,357.5 116,033.2
Zimbabwe 4,569.6 5,373.2 7,896.3 11,408.7 4,520.5 2,508.9 2,803.5
Others 163,444.9 633,270.2 1,129,651.1 1,051,793.3 815,191.6 865,818.6 1,176,033.4
Total 16,218,291.3 17,628,318.7 19,841,172.6 21,443,280.1 17,145,817.7 17,338,939.4 19,368,423.9

Source: Tanzania Revenue Authority and Bank of Tanzania computations

Note: n.a denotes not available; and p, provisional data

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Table A4.10: Tanzania Exports to COMESA Countries

Millions of TZS
P
2012 2013 2014 2015 2016 2017 2018

Burundi 72,026.5 71,932.8 71,138.1 77,673.3 113,462.1 113,236.4 107,876.7

Comoro 3,287.5 1,353.1 2,682.6 371,921.3 375,192.9 11,386.0 7,338.8
Djibout 1,062.1 86.0 4,330.0 15,401.2 6,408.5 905.9 74.5
Ethiopia 4,679.1 3,253.8 8,918.2 293.8 1,789.4 5,720.4 7,503.5
Kenya 520,143.0 362,976.2 737,131.7 1,452,035.1 683,147.8 390,644.5 482,237.3
Lesotho n.a n.a n.a n.a n.a n.a n.a
Malawi 139,858.5 65,986.0 168,249.8 111,089.8 67,007.8 80,273.7 104,454.5
Mauritius 7,305.8 3,410.1 4,017.3 2,514.8 3,590.6 5,343.0 5,567.8
Rwanda 115,323.9 129,487.7 59,177.7 81,736.7 14,188.4 134,667.9 179,647.5
Somalia 1,637.0 931.2 11,043.1 5,528.6 845.8 2,885.5 2,188.6
Swaziland 3,546.4 6,396.9 1,905.1 18,074.2 247.3 1,225.7 4,613.6
Uganda 103,386.6 105,601.3 121,218.9 99,881.8 126,744.3 53,630.2 238,736.7
Zambia 112,288.0 144,886.8 223,715.6 87,513.6 70,815.5 108,312.3 114,266.0
Zimbabwe 7,478.8 10,312.6 11,668.4 12,439.8 13,821.4 18,621.3 19,784.4
Total 1,092,023.3 906,614.4 1,425,196.4 2,336,104.0 1,477,261.7 926,852.9 1,274,290.0
Source: Tanzania Revenue Authority and Bank of Tanzania computations
Note: n.a denotes not available; and p, provisional data

Table A4.11: Tanzania Imports from COMESA Countries

Millions of TZS
P
2012 2013 2014 2015 2016 2017 2018

Burundi 6,066.4 2,442.9 931.7 2,121.6 1,685.9 521.3 2,338.3

Comoro 35.3 32.1 103.3 186.7 10,153.6 37.7 67.1
Djibout 104.4 7.4 1,183.8 273.9 293.6 375.2 322.7
Ethiopia 1,615.2 885.5 436.6 4,677.4 283.2 432.0 549.2
Kenya 880,188.6 485,305.3 1,082,171.5 473,678.2 582,864.0 450,305.1 563,073.5
Lesotho 141.5 647.0 736.7 1,017.3 998.3 605.6 1,532.6
Malawi 19,599.0 15,918.5 19,875.5 26,999.1 57,834.7 36,965.5 41,657.8
Mauritius 28,331.8 23,954.2 21,037.3 49,329.4 32,900.1 17,486.4 16,840.3
Rwanda 3,305.7 2,475.5 5,279.0 2,210.7 2,444.0 2,905.4 3,099.2
Somalia 10.2 0.0 86.2 850.6 0.0 0.0 0.0
Swaziland 54,770.3 54,305.6 77,929.3 74,138.8 282,505.4 83,154.4 87,520.8
Uganda 169,013.6 83,917.6 79,316.6 78,309.9 66,848.5 76,481.8 119,947.2
Zambia 62,753.6 73,899.6 104,719.7 64,729.4 72,926.8 120,357.5 116,033.2
Zimbabwe 4,569.6 5,373.2 7,896.3 11,408.7 4,520.5 2,508.9 2,803.5
Total 1,230,505.2 749,164.4 1,401,703.4 789,931.6 1,116,258.8 792,136.9 955,785.4
Source: Tanzania Revenue Authority and Bank of Tanzania computations
Note: p denotes provisional data

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A4.0 Balance of Payments and Foreign Trade Statistics

Table A4.12: Trade with SADC Member States

Millions of USD
P
2012 2013 2014 2015 2016 2017 2018
South Africa
Exports 967.9 760.0 689.3 673.2 631.3 699.8 736.6
Imports 927.9 725.3 603.5 514.1 472.2 415.2 440.8
Trade balance 40.0 34.7 85.9 159.2 159.1 284.6 295.7
DRC
Exports 181.6 236.1 281.6 197.7 291.6 153.6 134.8
Imports 45.7 21.4 3.3 4.9 0.4 1.0 0.6
Trade balance 135.9 214.8 278.3 192.8 291.3 152.7 134.2
Malawi
Exports 89.0 41.3 41.3 56.0 30.8 69.1 46.3
Imports 39.9 50.8 63.4 32.6 26.6 16.5 18.5
Trade balance 49.1 -9.5 -22.1 23.4 4.2 52.7 27.8
Zambia
Exports 71.4 90.6 135.4 44.1 32.5 46.0 50.6
Imports 34.8 37.3 47.2 37.3 33.5 53.7 51.4
Trade balance 36.6 53.3 88.2 6.7 -1.0 -7.7 -0.8
Mozambique
Exports 53.1 66.4 68.1 18.6 12.3 12.9 6.8
Imports 18.0 16.5 12.7 24.8 12.0 9.2 24.2
Trade balance 35.1 49.9 55.4 -6.2 0.4 3.6 -17.4
Namibia
Exports 45.0 5.0 0.8 0.7 0.3 0.2 0.4
Imports 12.5 10.9 12.0 13.6 6.1 7.4 9.3
Trade balance 32.5 -6.0 -11.3 -12.9 -5.8 -7.2 -9.0
Madagascar
Exports 7.0 1.9 2.3 3.3 1.0 4.6 6.8
Imports 11.1 73.5 18.4 33.3 5.6 10.9 13.8
Trade balance -4.1 -71.6 -16.1 -30.0 -4.6 -6.3 -7.0
Zimbabwe
Exports 4.8 6.5 7.1 6.3 6.3 8.3 8.8
Imports 6.7 1.0 3.4 0.1 2.1 1.1 1.2
Trade balance -1.9 5.5 3.7 6.1 4.3 7.2 7.5
Mauritius
Exports 4.6 2.1 0.0 1.3 1.6 2.4 2.5
Imports 2.9 3.7 3.4 5.7 15.1 7.9 7.5
Trade balance 1.7 -1.6 -3.4 -4.5 -13.5 -5.5 -5.0
Angola
Exports 2.6 28.9 2.5 3.8 4.6 10.2 2.7
Imports 1.0 0.3 3.4 0.0 0.0 0.0 0.2
Trade balance 1.6 28.6 -1.0 3.8 4.5 10.2 2.4
Swaziland
Exports 2.3 4.0 1.2 9.1 0.1 0.6 2.0
Imports 0.9 1.0 3.1 1.5 41.2 37.2 38.8
Trade balance 1.3 3.0 -1.9 7.6 -41.1 -36.7 -36.7
Seychelles
Exports 0.5 0.4 0.2 14.0 0.2 0.2 0.0
Imports 0.9 0.1 0.8 0.6 0.1 2.4 1.9
Trade balance -0.4 0.3 -0.6 13.4 0.2 -2.2 -1.9
Botswana
Exports 0.4 0.3 4.2 0.1 0.0 0.4 0.4
Imports 0.1 0.4 0.4 0.5 0.3 0.2 0.3
Trade balance 0.3 -0.1 3.8 -0.4 -0.3 0.2 0.1
Lesotho
Exports 0.0 0.0 0.1 0.0 0.0 0.0 0.0
Imports 0.0 0.0 0.0 0.1 0.5 0.3 0.7
Trade balance 0.0 0.0 0.0 -0.1 -0.5 -0.3 -0.7
Exports to SADC 1,430.2 1,243.5 1,233.9 1,028.1 1,012.7 1,008.4 998.6
Imports from SADC 1,102.5 942.2 774.9 669.2 615.5 563.1 609.2
Trade balance 327.7 301.3 458.9 358.9 397.2 445.4 389.4
Source: Tanzania Revenue Authority and Bank of Tanzania computations
Note: p denotes provisonal data

233
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A4.0 Balance of Payments and Foreign Trade Statistics

Table A4.13: Tanzania‘s Shares of Trade with SADC Member States

Percent
P
2011 2012 2013 2014 2015 2016 2017 2018

Exports:
South Africa 71.1 67.7 61.1 55.9 65.5 62.3 69.4 73.8
DRC 10.2 12.7 19.0 22.8 19.2 28.8 15.2 13.5
Malawi 4.4 6.2 3.3 3.3 5.4 3.0 6.9 4.6
Zambia 4.0 5.0 7.3 11.0 4.3 3.2 4.6 5.1
Mozambique 5.3 3.7 5.3 5.5 1.8 1.2 1.3 0.7
Namibia 0.0 3.1 0.4 0.1 0.1 0.0 0.0 0.0
Madagascar 0.9 0.5 0.2 0.2 0.3 0.1 0.5 0.7
Zimbabwe 0.4 0.3 0.5 0.6 0.6 0.6 0.8 0.9
Mauritius 0.2 0.3 0.2 0.0 0.1 0.2 0.2 0.2
Angola 2.4 0.2 2.3 0.2 0.4 0.5 1.0 0.3
Swaziland 1.1 0.2 0.3 0.1 0.9 0.0 0.1 0.2
Seychelles 0.0 0.0 0.0 0.0 1.4 0.0 0.0 0.0
Botswana 0.0 0.0 0.0 0.3 0.0 0.0 0.0 0.0
Lesotho 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Imports:
South Africa 86.1 84.2 77.0 77.9 76.8 76.7 73.7 72.4
DRC 0.1 4.1 2.3 0.4 0.7 0.1 0.2 0.1
Malawi 3.4 3.6 5.4 8.2 4.9 4.3 2.9 3.0
Zambia 3.7 3.2 4.0 6.1 5.6 5.4 9.5 8.4
Mozambique 0.9 1.6 1.7 1.6 3.7 1.9 1.6 4.0
Namibia 1.4 1.1 1.2 1.6 2.0 1.0 1.3 1.5
Madagascar 2.1 1.0 7.8 2.4 5.0 0.9 1.9 2.3
Zimbabwe 0.3 0.6 0.1 0.4 0.0 0.3 0.2 0.2
Mauritius 0.4 0.3 0.4 0.4 0.9 2.5 1.4 1.2
Angola 0.4 0.1 0.0 0.4 0.0 0.0 0.0 0.0
Swaziland 0.4 0.1 0.1 0.4 0.2 6.7 6.6 6.4
Seychelles 0.1 0.1 0.0 0.1 0.1 0.0 0.4 0.3
Botswana 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0
Lesotho 0.7 0.0 0.0 0.0 0.0 0.1 0.0 0.1
Source: Tanzania Revenue Authority and Bank of Tanzania computations
Note: p denotes provisonal data

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A4.0 Balance of Payments and Foreign Trade Statistics

Table A4.14: Services, Income and Transfers

Millions TZS
Services Primary income Secondary income

Period Net Receipts Payments Net Receipts Payments Net Receipts Payments

2012 671,912.6 4,379,332.8 3,707,420.2 -896,300.5 205,970.9 1,102,271.4 688,647.4 854,367.0 165,719.5
2013 1,143,587.9 5,123,127.4 3,979,539.6 -1,124,060.5 207,963.6 1,332,024.1 679,616.6 778,344.4 98,727.8
2014 1,209,578.7 5,622,864.2 4,413,285.5 -533,029.9 195,348.9 728,378.8 198,731.0 294,945.5 96,214.4
2015 1,495,565.0 6,803,828.9 5,308,263.9 -697,334.3 217,069.0 914,403.3 761,996.7 919,582.6 157,585.9
r
2016 2,560,362.1 7,852,491.8 5,292,129.7 -2,627,604.7 235,570.3 2,863,175.0 889,706.1 1,053,917.5 164,211.4
r
2017 4,065,575.4 8,485,518.4 4,419,942.9 -2,631,483.2 281,248.5 2,912,731.6 896,168.2 1,081,601.1 185,433.0
P
2018 4,251,272.1 9,058,301.8 4,807,029.7 -1,957,189.3 352,120.1 2,309,309.3 1,058,092.6 1,209,536.9 151,444.4

2018-Q1 836,226.7 2,084,712.6 1,248,485.9 -585,614.6 76,421.8 662,036.4 237,351.2 284,873.2 47,522.0
Q2 808,129.9 1,987,134.5 1,179,004.6 -466,177.6 79,930.7 546,108.2 352,839.3 389,744.6 36,905.4
Q3 1,231,030.2 2,435,883.1 1,204,852.9 -416,014.3 89,301.4 505,315.7 197,440.9 235,077.7 37,636.8
Q4 1,375,885.4 2,550,571.6 1,174,686.2 -489,382.8 106,466.2 595,849.0 270,461.2 299,841.4 29,380.2

2019-Q1 1,168,463.1 2,288,689.5 1,120,226.4 -454,234.2 126,879.8 581,113.9 206,177.0 239,948.5 33,771.5
Q2 850,369.8 1,971,174.0 1,120,804.2 -514,874.8 89,984.1 604,858.9 194,078.0 226,402.1 32,324.1
Source: Tanzania Revenue Authority, and Bank of Tanzania computations
Note: r denotes revised data; p, provisional data; and Q, quarter

235
 Bank of Tanzania Annual Report 2018/19

A5.0: National Debt Statistics

Table A5.1: Debt Developments
Millions of USD
r r P
Item 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
2
1. Overal total debt committed 14,098.1 17,087.4 18,804.1 20,718.9 23,118.3 25,692.9 28,063.1 29,575.8
Disbursed outstanding debt 8,873.0 11,086.4 12,632.1 14,548.3 15,948.1 17,251.2 18,765.1 20,025.3
Undisbursed debt 5,225.1 6,001.0 6,172.0 6,170.6 7,170.2 8,441.7 9,298.0 9,550.5
2
2. Disbursed debt by creditor category 9,188.3 11,086.4 12,632.1 14,548.3 15,948.1 17,251.2 18,765.1 20,025.3
Bilateral debt 1,015.8 1,018.9 1,057.9 923.3 1,112.5 1,155.9 981.7 1,055.7
Multilateral debt 5,615.8 6,406.1 6,997.3 7,602.6 8,044.4 8,711.1 9,509.2 9,965.1
Commercial debt 1,944.1 2,976.4 3,780.0 4,871.5 5,572.9 5,879.8 6,498.5 6,921.5
Export credits 612.7 685.1 796.9 1,150.8 1,218.3 1,504.4 1,775.7 2,083.0
2
3. Disbursded debt by borrower category 9,188.3 11,086.4 12,632.1 14,548.3 15,948.1 17,251.2 18,765.1 20,025.3
Central government 7,141.3 8,993.6 10,416.3 11,986.8 12,944.5 13,901.6 14,978.8 15,723.2
Public corporations 404.6 454.8 491.2 427.2 337.0 282.2 180.4 95.0
Private sector 1,642.4 1,638.0 1,724.5 2,134.3 2,666.6 3,067.4 3,605.9 4,207.1
2
4. Disbursed debt by use of funds 9,188.3 11,086.4 12,632.1 14,548.3 15,948.1 17,251.2 18,765.1 20,025.3
BOP and budget support 2,611.7 2,627.0 2,582.7 2,383.8 2,544.3 3,053.6 2,723.7 2,836.4
Transport and telecommunication 1,440.7 1,821.7 2,953.5 3,291.0 3,649.3 3,891.6 4,077.0 4,630.0
Agriculture 788.5 960.3 613.7 604.1 615.7 1,118.9 1,207.0 1,256.0
Energy and mining 675.8 910.5 1,698.2 2,324.0 2,700.6 2,785.0 2,970.0 3,105.0
Industries 199.9 224.4 215.2 345.2 400.0 435.0 605.0 666.0
Social welfare and education 1,678.3 2,236.9 2,154.9 2,255.7 2,350.1 2,512.5 2,999.0 3,254.0
Finance and insurance 338.1 357.3 395.8 637.2 732.6 895.2 1,049.0 1,186.0
Tourism 123.3 104.3 101.5 97.5 46.9 67.3 68.0 171.0
Real estate and construction 182.2 555.0 733.4 796.2 1,096.0 1,109.0
Other 1,332.0 1,844.0 1,734.4 2,054.8 2,175.2 1,696.0 1,970.4 1,811.9
1
5. Total amount of loan contracted 1,621.0 1,937.0 1,159.2 1,415.0 850.2 1,182.7 282.7 155.4
Central government 414.5 1,006.3 430.9 500.0 0.0 400.0 0.0 0.0
Public corporations 0.0 263.1 0.0 0.0 0.0 0.0 0.0 0.0
Private sector 1,206.5 667.6 728.3 915.0 850.2 782.7 282.7 155.4
1
6. Disbursements 1,514.8 2,351.2 2,347.4 2,584.1 1,800.0 1,634.9 1,599.3 1,469.5
Central government 812.0 1,949.7 1,934.7 2,033.9 1,145.2 1,310.3 1,394.7 1,351.1
Public corporations 0.0 114.1 0.0 0.0 0.0 0.0 0.0 0.0
Private Sector 702.8 287.3 412.6 550.2 654.8 324.6 204.6 118.4
1
7. Actual debt service 11.7 148.3 489.0 565.5 880.5 854.2 1,072.3 990.5
Principal 4.0 54.5 326.7 334.3 529.6 544.7 760.7 693.2
Interest 3.5 62.8 162.3 225.1 350.8 309.6 311.6 297.2
Other payments 4.2 31.0 0.0 6.0 0.1 0.0 0.0 0.0
1
8. Net flows on debt 1,510.8 2,296.6 2,020.7 2,249.8 1,270.3 1,090.2 838.6 776.3
1
9. Net transfers on debt 1,503.1 2,202.9 1,858.4 2,018.6 919.5 780.6 526.9 479.1
2
10. Arrears by creditors category 2,634.1 2,770.8 3,339.2 3,146.8 2,350.5 3,142.8 4,279.5 4,789.3
Principal 1,152.4 1,375.0 1,734.4 1,811.1 1,117.7 1,742.9 2,541.6 2,897.6
Bilateral debt 403.3 356.5 379.0 427.3 327.7 346.8 326.0 320.7
Multilateral debt 6.4 19.8 24.2 34.6 28.1 72.0 100.7 117.2
Commercial debt 464.8 674.6 831.5 754.6 416.3 730.9 807.3 1,281.5
Export credits 277.9 324.0 499.8 594.6 345.6 593.2 1,307.6 1,178.2
Interest 1,481.6 1,395.8 1,604.8 1,335.7 1,232.8 1,399.9 1,737.9 1,891.7
Bilateral debt 770.5 767.2 835.4 678.3 730.4 784.8 840.9 901.4
Multilateral debt 7.5 5.4 10.9 11.2 7.7 14.9 29.4 25.2
Commercial debt 567.9 516.1 594.5 439.8 295.3 365.7 359.9 536.2
Export credits 135.7 107.1 163.9 206.4 199.3 234.6 507.7 428.9
11. Total debt stock 13,330.5 16,001.6 18,198.5 19,692.6 21,788.1 24,639.0 26,971.0 28,408.8
External debt stock 10,670.0 12,482.2 14,236.9 15,884.0 17,180.9 18,651.1 20,503.0 21,917.0
Domestic debt stock 2,660.6 3,519.4 3,961.7 3,808.6 4,607.2 5,987.8 6,468.0 6,491.8
Memorandu items:
Export of goods and services 7,987.5 8,341.5 8,589.3 8,852.3 8,405.8 8,430.4 8,588.5 8,561.6
GDP at market (current) prices 36,485.6 42,207.1 47,155.0 43,792.6 46,517.8 50,917.5 54,464.5 57,976.7
External debt stock as percent of GDP 29.2 29.6 30.2 36.3 36.9 36.6 37.6 37.8
Total debt stock as percent of GDP 36.5 37.9 38.6 45.0 46.8 48.4 49.5 49.0
External debt service as percent of exports 0.1 1.8 5.7 6.4 10.5 10.1 12.5 11.6
External debt as percent of exports 133.6 149.6 165.8 179.4 204.4 221.2 238.7 256.0
Domestic debt stock as percent of GDP 7.3 8.3 8.4 8.7 9.9 11.8 11.9 11.2
End of period exchange rate (TZS/USD) 1,568.9 1,602.7 1,649.7 2,020.3 2,178.9 2,230.1 2,266.4 2,289.5
Source: Bank of Tanzania
Note: Multilateral arrears are those owed by the private sector, 1 denotes debt flows during the period; 2
stock position at the end of period; r, revised data; and p, provisional data

236
 Bank of Tanzania Annual Report 2018/19

A6.0 Output, Prices and Government Finance Statistics, Zanzibar

Table A6.1: Gross Domestic Products by Activity at Current Prices
Million of TZS
P
Activity 2012 2013 2014 2015 2016 2017 2018

Agriculture, forestry and fishing 379,900.1 432,023.2 475,700.0 519,718.9 603,033.4 694,698.3 778,432.0
Crops 171,302.1 203,625.8 212,950.6 227,704.6 256,455.8 312,784.6 315,523.2
Livestock 70,436.3 80,251.0 95,981.4 113,538.0 166,745.2 165,055.7 224,549.0
Forestry 32,792.2 34,641.5 38,671.1 41,251.0 42,627.8 51,377.8 48,401.7
Fishing 105,369.6 113,505.0 128,096.9 137,225.4 137,204.6 165,480.2 189,958.1

Industry 301,515.9 348,777.0 381,614.6 433,500.9 528,604.9 631,556.9 651,993.9

Mining and quarrying 15,600.9 18,092.2 19,632.5 23,463.6 28,885.7 36,289.3 42,661.5
Manufacturing 132,421.8 147,918.2 160,376.9 180,115.0 195,133.2 210,685.0 208,938.9
Electricity and gas 5,740.0 10,221.0 7,918.9 11,658.2 28,904.8 29,866.2 31,139.1
Water supply and sewerage 6,818.4 11,777.5 18,155.7 19,565.8 20,706.8 21,589.9 22,081.2
Construction 140,935.0 160,768.0 175,530.6 198,698.4 254,974.3 333,126.5 347,173.2

Services 755,929.4 874,985.9 1,064,652.4 1,173,845.6 1,337,012.0 1,568,486.9 1,883,370.9

Trade and repairs 132,563.8 140,536.1 152,001.1 162,086.3 175,084.7 198,808.4 196,188.2
Transport and storage 75,761.9 81,424.2 93,988.9 101,969.3 109,118.4 109,288.9 115,708.3
Accommodation and food services 237,081.2 266,582.9 297,840.2 331,006.3 388,084.5 473,460.4 715,258.0
Accommodation 183,495.2 209,246.7 236,669.3 268,136.6 318,470.5 391,075.2 581,297.7
Food and beverage services 53,586.0 57,336.2 61,170.9 62,869.6 69,614.0 82,385.1 133,960.3
Information and communication 20,693.5 27,979.0 54,301.4 52,507.0 51,159.5 37,311.6 33,871.8
Financial and insurance activities 37,373.6 45,334.7 62,326.7 78,575.3 90,732.9 118,509.4 140,893.6
Real estate activities 57,544.3 78,719.6 121,813.4 127,917.6 180,398.8 273,923.7 300,646.9
Professional, scientific and technical 1,151.6 1,909.3 3,117.7 3,595.5 4,285.0 4,413.3 4,851.3
Administrative and support services 18,206.8 20,924.9 22,000.0 25,008.0 24,936.7 28,526.3 29,528.3
Public administration 110,015.0 133,410.6 159,012.9 181,857.5 194,437.9 199,330.2 211,418.2
Education 32,359.2 43,599.7 61,196.6 69,438.5 75,266.4 80,280.9 85,010.4
Human health and social work 20,549.5 23,518.4 26,624.2 29,728.4 33,802.6 36,233.0 37,317.7
Arts, entertainment and recreation 1,635.6 1,676.3 1,673.6 1,891.7 2,321.6 2,650.9 3,074.5
Other service activities 18,417.3 22,301.0 24,889.9 27,002.6 33,146.8 39,166.6 45,673.8
Domestic services 3,153.3 3,254.4 4,205.1 5,199.8 5,366.6 5,538.7 5,716.3
Less: FISIM -10,577.1 -16,185.2 -20,339.3 -23,938.1 -31,130.3 -38,955.3 -41,786.3
GDP at basic prices 1,437,345.5 1,655,786.1 1,899,967.0 2,127,065.4 2,468,650.2 2,894,742.1 3,313,796.8
Add: Taxes on products 165,300.0 187,518.7 225,108.2 229,891.2 278,509.8 332,305.8 354,834.0
GDP at market prices 1,602,645.5 1,843,304.8 2,125,075.2 2,356,956.6 2,747,160.0 3,227,047.9 3,668,630.8

Population in '000' 1,303.6 1,348.8 1,394.7 1,441.2 1,488.0 1,534.3 1,579.8

GDP per capita in TZS '000' 1,229.4 1,366.7 1,523.7 1,635.4 1,846.2 2,103.3 2,322.1
Exhange rate TZS/USD, period average 1,571.7 1,599.2 1,653.3 1,997.0 2,177.2 2,228.9 2,264.0
Source: Office of the Chief Government Statistician, Zanzibar
Note: p denotes provisional data

237
 Bank of Tanzania Annual Report 2018/19

A6.0 Output, Prices and Government Finance Statistics, Zanzibar

Table A6.2: Gross Domestic Product by Activity at Current Prices, Percentage Share in Total GDP
Percent
P
Activity 2012 2013 2014 2015 2016 2017 2018
Agriculture, forestry and fishing 23.7 23.4 22.4 22.1 22.0 21.5 21.2
Crops 10.7 11.0 10.0 9.7 9.3 9.7 8.6
Livestock 4.4 4.4 4.5 4.8 6.1 5.1 6.1
Forestry and hunting 2.0 1.9 1.8 1.8 1.6 1.6 1.3
Fishing 6.6 6.2 6.0 5.8 5.0 5.1 5.2
Industry 18.8 18.9 18.0 18.4 19.2 19.6 17.8
Mining and quarrying 1.0 1.0 0.9 1.0 1.1 1.1 1.2
Manufacturing 8.3 8.0 7.5 7.6 7.1 6.5 5.7
Electricity and gas 0.4 0.6 0.4 0.5 1.1 0.9 0.8
Water supply and sewerage 0.4 0.6 0.9 0.8 0.8 0.7 0.6
Construction 8.8 8.7 8.3 8.4 9.3 10.3 9.5
Services 47.2 47.5 50.1 49.8 48.7 48.6 51.3
Trade and repairs 8.3 7.6 7.2 6.9 6.4 6.2 5.3
Transport and storage 4.7 4.4 4.4 4.3 4.0 3.4 3.2
Accomodation and food services 14.8 14.5 14.0 14.0 14.1 14.7 19.5
Accomodation 11.4 11.4 11.1 11.4 11.6 12.1 15.8
Food and beverage services 3.3 3.1 2.9 2.7 2.5 2.6 3.7
Information and communication 1.3 1.5 2.6 2.2 1.9 1.2 0.9
Financial and insurance activities 2.3 2.5 2.9 3.3 3.3 3.7 3.8
Real estate activities 3.6 4.3 5.7 5.4 6.6 8.5 8.2
Professional, scientific and technical 0.1 0.1 0.1 0.2 0.2 0.1 0.1
Administrative and support services 1.1 1.1 1.0 1.1 0.9 0.9 0.8
Public administration 6.9 7.2 7.5 7.7 7.1 6.2 5.8
Education 2.0 2.4 2.9 2.9 2.7 2.5 2.3
Human health and social work 1.3 1.3 1.3 1.3 1.2 1.1 1.0
Arts, entertaiment and recreation 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Other service activities 1.1 1.2 1.2 1.1 1.2 1.2 1.2
Domestic services 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Less: FISIM -0.7 -0.9 -1.0 -1.0 -1.1 -1.2 -1.1
GDP at basic prices 89.7 89.8 89.4 90.2 89.9 89.7 90.3
Taxes on products 10.3 10.2 10.6 9.8 10.1 10.3 9.7
GDP at market prices 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: Office of the Chief Government Statistician, Zanzibar
Note: p denotes provisional data

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Table A6.3: Gross Domestic Product by Activity at Constant 2015 Prices

Millions of TZS
P
Activity 2012 2013 2014 2015 2016 2017 2018

Agriculture, forestry and fishing 464,964.1 492,339.7 493,389.3 519,718.9 539,470.4 581,961.7 603,382.1
Crops 221,849.9 236,060.5 219,172.3 227,704.6 235,942.4 261,048.2 270,623.4
Livestock 83,498.9 91,804.2 100,236.8 113,538.0 124,643.2 136,036.8 146,324.0
Forestry and hunting 40,088.7 40,011.7 40,597.8 41,251.0 42,286.7 44,076.5 44,195.5
Fishing 119,526.6 124,463.4 133,382.4 137,225.4 136,598.0 140,800.2 142,239.2
Industry 355,365.5 369,274.1 394,880.4 433,501.0 466,959.2 493,084.6 503,963.3
Mining and quarrying 20,754.6 21,546.8 21,378.2 23,463.6 27,200.7 32,719.2 37,066.7
Manufacturing 140,466.7 148,886.5 162,386.9 180,115.0 194,561.1 211,321.3 207,876.8
Electricity and gas 10,114.2 10,432.5 10,924.6 11,658.3 12,613.4 13,147.7 13,823.3
Water supply and sewerage 16,038.0 16,951.2 18,112.5 19,565.8 20,913.3 22,448.9 23,077.8
Construction 167,992.1 171,457.0 182,078.2 198,698.4 211,670.7 213,447.5 222,118.7
Services 1,006,010.8 1,044,938.6 1,131,997.0 1,196,482.6 1,265,172.3 1,360,137.6 1,495,560.3
Trade and repairs 161,373.5 168,667.8 166,921.1 162,086.3 169,431.7 180,256.9 192,220.8
Transport and storage 83,986.4 90,076.5 98,546.0 101,969.0 107,633.1 111,365.1 121,812.1
Accomodation and food services 264,116.8 282,201.2 297,813.6 331,006.3 375,533.9 429,210.0 504,749.5
Accomodation 212,807.2 227,722.2 240,546.8 268,136.6 305,243.5 350,029.4 409,489.6
Food and beverage services 51,309.6 54,479.0 57,266.8 62,869.6 70,290.4 79,180.6 95,259.9
Information and communication 53,229.5 44,791.2 57,727.2 52,507.0 44,692.8 51,598.5 53,220.8
Financial and insurance activities 52,081.1 52,167.4 64,509.3 78,575.4 83,656.5 91,571.9 95,615.7
Real estate activities 109,285.1 115,029.2 121,392.1 128,418.7 136,157.9 144,662.6 153,990.7
Professional, scientific and technical 1,552.6 2,296.2 3,291.7 3,595.5 3,941.0 3,815.6 4,013.7
Administrative and support services 22,435.4 23,760.6 22,514.1 23,206.0 22,767.9 24,415.6 25,604.1
Public administration 147,809.0 147,080.6 169,740.4 181,857.5 180,874.7 175,947.2 185,600.0
Education 54,410.9 60,241.2 67,161.8 69,438.5 71,529.8 73,336.8 78,464.1
Human health and social work 26,321.4 27,450.3 29,648.1 29,728.4 30,822.1 31,249.2 31,979.5
Arts, entertaiment and recreation 1,423.2 1,528.1 1,617.4 1,891.7 2,387.2 2,734.2 3,261.8
Other service activities 23,256.0 24,766.7 26,075.8 27,002.6 30,377.3 34,435.4 39,311.1
Domestic services 4,729.9 4,881.6 5,038.2 5,199.8 5,366.6 5,538.7 5,716.3
Less FISIM -16,930.9 -18,681.8 -21,234.1 -23,938.1 -27,901.4 -27,660.3 -24,845.8
GDP at basic prices 1,809,409.4 1,887,870.6 1,999,032.6 2,125,764.4 2,243,700.6 2,407,523.6 2,578,059.8
Add: Taxes on products 189,622.0 196,550.3 218,933.8 229,891.2 247,696.9 276,822.6 296,272.9
GDP at market prices 1,999,031.4 2,084,421.0 2,217,966.3 2,355,655.6 2,491,397.5 2,684,346.2 2,874,332.7
Source: Office of the Chief Government Statistician, Zanzibar
Note: p denotes provisional data

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Table A6.4: Gross Domestic Product by Activity at Constant 2015 Prices, Percentage Annual
Growth Rates
Percent
P
Economic Activity 2012 2013 2014 2015 2016 2017 2018

Agriculture, forestry and fishing -2.9 5.9 0.2 5.3 3.8 7.9 3.7
Crops -10.7 6.4 -7.2 3.9 3.6 10.6 3.7
Livestock 16.2 9.9 9.2 13.3 9.8 9.1 7.6
Forestry and hunting 1.8 -0.2 1.5 1.6 2.5 4.2 0.3
Fishing 0.5 4.1 7.2 2.9 -0.5 3.1 1.0
Industry 11.9 3.9 6.9 9.8 7.7 5.6 2.2
Mining and quarrying 9.6 3.8 -0.8 9.8 15.9 20.3 13.3
Manufacturing 10.0 6.0 9.1 10.9 8.0 8.6 -1.6
Electricity and gas 9.5 3.1 4.7 6.7 8.2 4.2 5.1
Water supply and sewerage 6.6 5.7 6.9 8.0 6.9 7.3 2.8
Construction 14.5 2.1 6.2 9.1 6.5 0.8 4.1
Services 0.0 3.9 8.3 5.7 5.7 7.5 10.0
Trade and repairs 13.1 4.5 -1.0 -2.9 4.5 6.4 6.6
Transport and storage -0.2 7.3 9.4 3.5 5.6 3.5 9.4
Accomodation and food services -0.4 6.8 5.5 11.1 13.5 14.3 17.6
Accomodation 0.4 7.0 5.6 11.5 13.8 14.7 17.0
Food and beverage services 11.1 6.2 5.1 9.8 11.8 12.6 20.3
Information and communication 15.0 -15.9 28.9 -9.0 -14.9 15.5 3.1
Financial and insurance activities 5.0 0.2 23.7 21.8 6.5 9.5 4.4
Real estate activities 21.4 5.3 5.5 5.8 6.0 6.2 6.4
Professional, scientific and technical 23.2 47.9 43.4 9.2 9.6 -3.2 5.2
Administrative and support services -0.2 5.9 -5.2 3.1 -1.9 7.2 4.9
Public administration 4.2 -0.5 15.4 7.1 -0.5 -2.7 5.5
Education 1.6 10.7 11.5 3.4 3.0 2.5 7.0
Human health and social work -0.7 4.3 8.0 0.3 3.7 1.4 2.3
Arts, entertaiment and recreation 0.0 7.4 5.8 17.0 26.2 14.5 19.3
Other service activities 3.2 6.5 5.3 3.6 12.5 13.4 14.2
Domestic services 10.2 3.2 3.2 3.2 3.2 3.2 3.2
Less FISM 3.2 10.3 13.7 12.7 16.6 -0.9 -10.2
GDP at basic prices 4.3 5.9 6.3 5.5 7.3 7.1
Taxes on products 30.7 3.7 11.4 5.0 7.7 11.8 7.0
GDP at market prices 5.3 4.3 6.4 6.2 5.8 7.7 7.1
Source: Office of the Chief Government Statistician, Zanzibar
Note: p denotes provisional data

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A6.0 Output, Prices and Government Finance Statistics, Zanzibar

Table A6.5: Production of Major Cash Crops
Tonnes
P
Crop 2012 2013 2014 2015 2016 2017 2018

Cloves 1,755.4 5,733.0 4,153.0 3,322.0 4,678.7 8,277.2 675.2

Clove sterm 328.4 492.6 901.2 217.4 974.7 1,630.6 172.8
Seaweed 15,087.0 11,043.8 13,302.0 16,724.0 11,114.5 10,980.9 10,424.9
Rubber 385.0 394.1 204.2 25.0 10.0 0.0 0.0

Source: Zanzibar State Trading Corporation (ZSTC), Ministry of Agriculture, Natural Resources, Livestock and Fishing
and AGROTEX Company
Note: p denotes provisional data

Table A6.6: Production of Selected Commodities

r P
Commodity Units 2012 2013 2014 2015 2016 2017 2018

Beverages* Liters in '000' 14,409.0 12,409.0 12,448.0 16,972.0 19,811.0 21,699.0 20,166.0
Mill. of TZS 7,461.8 5,407.9 4,081.6 5,314.9 7,232.2 7,921.6 7,362.0
Bread Pcs. in '000' 114,858.0 127,815.0 143,855.0 161,911.0 174,350.0 194,893.0 209,439.0
Mill. of TZS 14,357.3 15,976.8 17,981.9 19,720.2 20,852.9 23,192.2 24,923.2
Wheat flour Tonnes 18,588.0 23,360.0 31,899.0 27,749.0 23,834.0 25,196.0 26,963.0
Mill. of TZS 20,699.2 17,824.3 25,519.2 23,836.0 23,085.2 23,939.3 24,711.8
Diary products Liters in '000' 0.0 0.0 1,528 7,745.0 10,475.5 8,174.3 7,709.3
Mill. of TZS 0.0 0.0 2,668.6 12,552.9 13,061.3 7,751.0 8,702.2
Noodles Kgs 199,000.0 215,915.0 222,392.0 277,990.0 181,872.0 247,350.0 295,701.0
Mill. of TZS 257.2 323.9 369.9 500.4 327.4 445.2 532.3
Door UPVC Pcs. in '000' 95.0 105.0 168.0 229.0 93.0 121.0 239.0
Mill. of TZS 14.6 20.9 29.3 31.5 13.3 17.4 33.9
Window UPVC No. in '000' 201.0 130.0 270.0 320.0 149.0 71.0 121.0
Mill. of TZS 22.4 25.9 41.3 42.0 17.7 13.3 21.7
Gaments dish-dash Pcs 2,877.0 3,622.0 3,950.0 3,419.0 3,674.0 3,119.0 2,973.0
Mill. of TZS 52.6 94.6 104.9 98.3 110.8 104.6 103.6
Jewellery (gold/silver) Gms 8,172.0 6,730.0 8,199.0 7,032.0 5,915.0 5,060.0 5,684.0
Mill. of TZS 26.7 16.6 17.5 15.3 15.1 12.3 12.1
Sugar Tonnes 0.0 0.0 0.0 0.0 4,818.0 677.0 3,339.0
Mil. of TZS 0.0 0.0 0.0 0.0 6,258.2 1,211.2 5,969.5
Essential products Pcs 0.0 0.0 0.0 0.0 0.0 227,088.0 224,045.0
Mil. of TZS 0.0 0.0 0.0 0.0 0.0 811.8 801.0
Source: Office of the Chief Government Statistician, Zanzibar

Note: r denotes revised data; and p, provisional data

* includes mineral water, soft drinks and juice; and essenrial products, clove stem oil, lemongrass oil, cinnamon leaf oil, eucalyptus citriodora oil, eucalyptus
camaldulensis oil and sweet basi oil

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 A6.0 Output, Prices and Government Finance Statistics, Zanzibar
Table A6.7: Consumer Price Index
Base: Aug 2012=100

Alcoholic Furnishing, household

beverages, Housing, water, equipment and routine Miscellaneous
tobacco and Clothing and electricity, gas household Recreation Restaurants goods and
Period All items Food Non-food narcotics footwear and other fuels maintenance Health Transport Communication and culture Education and hotels services

Old weights (%) 100.0 51.7 48.3 0.3 9.3 17.1 4.6 2.8 6.3 2.6 0.8 1.3 2.1 3.2

2013 103.4 99.4 108.0 107.3 110.2 107.1 104.1 102.8 104.5 120.9 110.1 116.0 100.1 113.0

2014 109.2 103.8 115.3 108.9 116.0 113.3 107.7 104.2 106.6 167.6 125.0 132.5 100.7 120.7

2015 115.4 111.4 119.7 113.6 123.9 116.6 112.5 110.9 102.2 192.2 128.2 137.9 113.5 126.1

2016 123.1 120.2 125.4 117.5 132.4 120.7 117.9 123.6 102.6 199.5 131.2 150.6 140.2 137.5

Base: Jan 2017=100

New weights (%) 100.0 43.6 57.3 0.2 6.9 18.4 5.5 2.1 9.6 4.2 1.3 1.9 3.9 2.3

2017 103.4 103.7 103.1 101.7 102.2 107.0 100.9 102.8 102.0 100.0 100.3 100.0 100.6 100.1

2018 107.3 105.1 109.0 106.0 105.5 113.1 114.1 105.7 112.0 99.6 105.4 105.5 101.1 102.7

2018 Jan 105.2 101.7 107.7 103.3 105.0 111.0 113.1 104.6 109.4 100.3 103.5 105.2 102.0 102.0

Feb 105.1 101.4 107.8 103.3 105.0 110.9 112.8 104.5 110.0 100.3 105.1 105.3 102.0 102.0

Mar 105.2 101.5 108.0 103.3 105.1 111.4 112.9 104.5 110.3 100.3 105.1 105.3 102.0 102.0

242
Apr 106.0 102.7 108.4 103.3 105.2 111.7 113.0 104.5 111.6 100.3 105.1 105.3 102.0 101.9

May 107.6 106.9 108.2 103.3 105.3 111.1 113.7 105.9 110.6 100.5 105.1 105.3 102.0 101.8

Jun 108.4 107.9 108.7 103.3 105.3 112.8 114.3 106.2 110.7 99.1 105.1 105.3 102.0 102.7

Jul 108.2 106.5 109.5 103.3 105.5 114.5 114.5 106.5 113.3 99.1 105.1 105.3 98.7 102.7

Aug 109.3 108.3 110.1 108.4 105.4 115.9 114.9 106.3 113.1 99.1 105.1 105.4 100.2 102.7

Sep 107.9 105.6 109.7 110.2 105.2 114.5 115.4 106.4 112.9 99.1 105.1 105.4 100.2 102.7

Oct 108.3 106.6 109.6 110.2 105.4 114.5 114.9 106.4 113.0 99.1 105.1 105.4 100.2 102.9
Bank of Tanzania Annual Report 2018/19

Nov 108.0 105.0 110.3 110.2 107.0 114.8 114.7 106.2 114.0 99.1 107.7 106.3 100.8 104.4

Dec 108.7 106.7 110.2 110.2 107.0 114.2 114.9 106.2 114.7 99.1 107.7 106.3 100.8 104.2

2019 Jan 108.3 105.5 110.4 110.4 106.9 112.6 116.4 108.9 113.9 99.1 107.7 109.7 106.3 105.6

Feb 107.8 105.4 109.7 110.2 106.7 112.0 116.1 108.9 111.4 99.1 107.7 109.7 106.3 105.6

Mar 108.2 104.5 111.0 110.2 105.2 113.1 116.0 108.9 111.5 114.8 107.7 109.7 106.3 105.6

Apr 109.1 106.3 111.2 110.2 105.2 112.6 116.7 109.4 112.2 114.8 107.5 109.7 106.3 106.0

May 110.9 109.4 112.1 110.2 107.2 114.2 117.0 109.5 113.1 114.8 108.1 109.7 106.3 106.7

Jun 111.3 110.5 111.9 110.2 107.0 113.3 117.1 109.5 113.7 114.8 109.5 109.7 106.3 107.1
Source: Office of the Chief Government Statistician, Zanzibar
 A6.0 Output, Prices and Government Finance Statistics, Zanzibar
Table A6.8: Consumer Price Index, Twelve Months Percentage Change
Base: Aug 2012=100

Alcoholic Furnishing, household

beverages, Housing, water, equipment and routine Miscellaneous
tobacco and Clothing and electricity, gas household Recreation Restaurants goods and
Period All items Food Non-food narcotics footwear and other fuels maintenance Health Transport Communication and culture Education and hotels services

Old weights (%) 100.0 51.7 48.3 0.3 9.3 17.1 4.6 2.8 6.3 2.6 0.8 1.3 2.1 3.2

2013 4.6 1.4 8.4 11.7 13.0 6.4 6.1 5.6 3.2 21.1 11.5 15.7 1.5 13.8

2014 5.6 4.5 6.8 1.5 5.3 5.8 3.5 1.4 2.0 38.6 13.5 14.2 0.7 6.8

2015 5.7 7.3 3.9 4.3 6.8 2.9 4.5 6.4 -4.1 14.7 2.6 4.1 12.6 4.5

2016 6.6 7.9 4.7 3.4 6.9 3.4 4.8 11.4 0.3 3.8 2.3 9.2 23.5 9.0
Base: Jan 2017=100

New weights (%) 100.0 43.6 57.3 0.2 6.9 18.4 5.5 2.1 9.6 4.2 1.3 1.9 3.9 2.3

2017 5.6 5.5 5.8 3.5 4.6 9.6 1.6 6.8 3.8 0.0 1.6 4.1 2.3 5.0

2018 3.9 1.4 5.7 4.3 3.3 5.8 13.0 2.9 9.8 -0.4 5.1 5.5 0.5 2.5

2018 Jan 5.2 1.7 7.7 3.3 5.0 11.0 13.1 4.6 9.4 0.3 3.5 5.3 2.0 2.0

Feb 4.8 1.2 7.5 3.3 5.1 10.1 12.8 4.5 8.8 0.3 8.7 5.3 2.0 2.0

Mar 4.4 0.4 7.5 3.3 5.2 11.1 12.9 4.4 7.7 0.3 6.8 5.3 2.0 2.0

243
Apr 2.6 -1.4 5.4 3.3 5.4 4.1 13.0 4.1 8.6 0.3 6.8 5.3 2.0 2.1

May 2.7 -0.4 5.2 3.3 5.5 3.3 13.6 1.8 8.5 0.4 6.9 5.3 2.0 1.9

Jun 3.5 2.3 4.4 3.3 1.2 3.9 12.9 2.6 7.9 -0.9 2.7 5.3 2.0 2.5

Jul 3.9 1.9 5.4 0.0 1.5 6.0 12.9 2.8 10.9 -0.9 2.8 5.3 -2.4 2.3

Aug 4.0 2.0 5.4 4.9 1.4 5.6 13.3 2.6 11.4 -0.9 2.8 5.4 -0.8 2.4

Sep 3.5 0.1 6.1 6.6 2.3 3.5 13.9 1.9 18.8 -0.9 8.8 5.4 -0.8 2.4
Bank of Tanzania Annual Report 2018/19

Oct 3.7 2.6 4.5 6.6 1.6 3.9 12.9 2.1 8.7 -0.9 2.5 5.4 -0.8 2.5

Nov 4.4 3.5 5.2 6.6 3.0 4.9 12.8 1.5 8.9 -0.9 5.0 6.3 -0.3 4.1

Dec 3.5 2.3 4.3 6.6 2.9 3.0 12.5 1.5 8.5 -1.1 4.8 6.3 -1.1 3.8

2019 Jan 3.0 3.7 2.4 6.9 1.8 1.5 2.9 4.0 4.1 -1.1 4.0 4.2 4.1 3.5

Feb 2.6 3.9 1.7 6.6 1.7 1.0 2.9 2.9 4.1 -1.1 2.4 4.2 4.1 3.5

Mar 2.8 3.0 2.8 6.6 0.1 1.5 2.7 4.1 1.1 14.5 2.4 4.2 4.1 3.5

Apr 2.9 3.3 2.6 6.6 0.4 0.8 3.3 4.7 0.5 14.5 2.3 4.2 4.1 4.0

May 3.1 2.3 3.6 6.6 1.8 2.8 3.0 3.4 2.2 14.2 2.9 4.2 4.1 4.9

Jun 2.7 2.4 2.9 6.6 1.6 0.4 2.5 3.1 2.7 15.8 4.2 4.2 4.1 4.3
Source: Office of the Chief Government Statistician, Zanzibar
 Bank of Tanzania Annual Report 2018/19

A6.0 Output, Prices and Government Finance Statistics, Zanzibar

Table A6.9: Government Operations
Millions of TZS
r P
2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
Total revenue 220,017.8 266,161.3 330,715.2 362,766.0 425,349.0 521,856.8 685,871.5 748,410.9
Tax revenue 195,528.8 254,379.4 316,098.1 342,002.0 386,738.7 465,749.8 606,932.7 653,729.7
Tax on imports 59,098.2 63,753.0 87,633.1 87,903.1 102,777.7 122,332.3 142,797.5 144,644.3
VAT and excise duties (local) 58,995.3 67,868.7 85,915.4 93,554.3 92,167.2 114,032.5 166,212.7 174,515.8
Income tax 32,569.3 60,700.1 57,187.0 56,000.9 68,455.1 81,475.6 113,151.8 143,469.3
Other taxes 44,866.0 62,057.5 85,362.6 104,543.7 123,338.6 147,909.3 184,770.6 191,100.2
Non-tax revenue 24,489.0 11,782.0 14,617.1 20,764.0 38,610.3 56,107.0 78,938.9 94,681.3

Total expenditure 375,391.2 514,348.6 469,006.0 483,800.0 484,375.8 591,246.6 924,442.3 1,131,520.6
Recurrent expenditure 233,888.7 300,248.4 327,262.7 348,373.0 400,868.4 475,465.9 623,301.0 702,831.4
Wages and salaries 118,813.0 132,663.8 164,427.1 182,378.4 196,041.2 217,865.0 282,207.0 334,629.6
Interest payment 1,356.3 0.0 1,529.0 3,327.0 0.0 0.0 0.0 0.0
Local 1,356.3 0.0 1,529.0 3,327.0 0.0 0.0 0.0 0.0
Foreign 0.0 0.0 0.0 0.0 1,000.0 0.0 0.0 0.0
Other expenditure 113,719.4 167,584.6 162,835.5 162,667.6 204,827.2 257,601.0 341,094.0 368,201.8

Development expenditure 141,502.5 214,100.1 141,743.4 135,427.0 83,507.4 113,538.8 301,141.3 428,689.1
Local 34,467.3 34,877.6 42,339.2 48,764.0 27,007.2 51,277.0 107,086.7 102,525.1
Foreign 107,035.2 179,222.6 99,404.2 86,663.0 56,500.2 62,257.7 194,054.6 326,164.1

Overall surplus/deficit before grants -155,373.4 -248,187.3 -138,290.9 -121,034.0 -59,026.8 -69,389.9 -238,570.7 -383,109.6

Grants 71,285.7 131,873.6 76,710.2 39,121.9 28,889.9 39,004.8 40,472.1 42,708.8

4.5% Budget support 25,466.0 22,135.0 36,053.8 17,031.0 7,674.0 5,656.5 2,357.0 5,642.8
Program grant 45,819.7 109,738.6 40,656.5 22,090.9 21,215.9 33,348.3 38,115.1 37,066.0
Overall surplus/deficit after grants -84,087.7 -116,313.6 -61,580.6 -81,912.1 -30,136.9 -30,385.1 -198,098.6 -340,400.8
Adjustment to cash and other items -8,120.0 38,647.2 -17,184.4 24,299.0 -25,892.8 1,475.7 22,159.0 11,316.8
Overall deficit cheques cleared -75,967.7 -77,666.4 -78,765.0 -57,613.1 -56,029.6 -28,909.4 -175,939.6 -329,084.0

Financing 75,967.7 77,666.4 78,765.0 57,613.1 56,029.6 28,909.4 175,939.6 329,084.0

Foreign 61,215.5 69,483.9 58,747.7 47,541.1 32,946.6 28,909.4 155,939.4 294,484.0
Program loans 61,215.5 69,483.9 58,747.7 47,541.1 32,946.6 28,909.4 155,939.4 294,484.0
Amortization (foreign) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Domestic (net) 14,752.2 8,182.5 20,017.3 10,072.0 23,083.0 0.0 20,000.2 34,600.0
Bank 0.0 8,182.5 23,083.0 0.0 0.0 0.0
Non-bank 14,752.2 0.0 20,017.3 10,072.0 0.0 0.0 20,000.2 34,600.0
Amortization (local) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Source: Ministry of Finance and Planning, Zanzibar
Note: r denotes revised data: and p, provisional data

244
 Bank of Tanzania Annual Report 2018/19

A7.0 International Economics and Financial Statistics

Table A7.1: Economic Performance in G-7 Countries and the Euro Area

2019
2012 2013 2014 2015 2016 2017 2018 Q1 Q2
G-7 Countries:
Canada:
1
Real GDP 1.7 2.5 2.9 0.7 1.1 3.0 1.9 1.4 1.6
1
Inflation 1.5 0.9 1.9 1.1 1.4 1.6 2.3 1.6 2.1
2
Interest rates 1.0 1.0 1.0 0.6 0.5 n.a n.a n.a n.a
France:
1
Real GDP 0.2 0.6 1.0 1.1 1.2 2.3 1.7 1.3 1.4
1
Inflation 2.0 0.9 0.5 0.0 0.2 1.0 1.9 1.2 1.1
2
Interest rates 0.1 0.0 0.1 -0.2 -0.6 n.a n.a n.a n.a
Germany:
1
Real GDP 0.5 0.5 2.2 1.7 2.2 2.2 1.4 0.9 0.4
1
Inflation 2.0 1.5 0.9 0.5 0.5 1.5 1.7 1.4 1.7
2
Interest rates 0.3 n.a n.a n.a n.a n.a n.a n.a n.a
Italy:
1
Real GDP -2.8 -1.7 0.1 0.9 1.1 1.7 0.9 -0.1 -0.1
1
Inflation 3.0 1.2 0.2 0.0 -0.1 1.2 1.1 1.0 0.8
2
Interest rates 2.1 n.a n.a n.a 0.4 n.a n.a n.a n.a
Japan:
1
Real GDP 1.5 2.0 0.4 1.2 0.6 1.9 0.8 1.0 1.1
1
Inflation -0.1 0.3 2.8 0.8 -0.1 0.5 1.0 0.3 0.8
2
Interest rates 0.1 0.1 0.1 0.1 0.0 n.a n.a n.a n.a
UK:
1
Real GDP 1.3 1.9 2.9 2.3 1.8 1.8 1.4 1.8 1.2
1
Inflation 2.8 2.6 1.5 0.4 1.0 2.6 2.3 1.8 2.0
2
Interest rates 0.5 0.5 0.4 0.4 0.3 n.a n.a n.a n.a
USA:
1
Real GDP 2.2 1.7 2.5 2.9 1.6 2.2 2.9 2.7 2.3
1
Inflation 2.1 1.5 1.6 0.1 1.3 2.1 2.4 1.6 1.8
2
Interest rates 0.1 0.1 0.1 0.3 0.4 n.a n.a n.a n.a
EURO AREA:
1
Real GDP -0.9 -0.3 1.4 2.1 2.0 2.4 1.9 1.2 1.1
1
Inflation 2.5 1.3 0.4 0.2 0.2 1.5 1.8 1.4 1.4
2
Interest rates 0.1 0.1 0.1 -0.2 n.a n.a n.a n.a n.a
Source: IMF World Economic Outlook, Bloomberg system and Organization for Economic Co-operation and Development
1
Notes: Percentage change from the preceding year/corresponding quarter of the previous year
2
Percent
Q denotes quarter; and n.a, not available

245
 A7.0 International Economics and Financial Statistics
Table A7.2: World Market Prices of Selected Commodities

2019
C ommodity Unit measure 2012 2013 2014 2015 2016 2017 2018 Q1 Q2

C offee "Arabica" US D per kg 4.11 3.08 4.42 3.53 3.61 3.32 2.93 2.80 2.73

C offee "R obusta" US D per kg 2.27 2.08 2.22 1.94 1.95 2.23 1.87 1.72 1.61

C otton "A index" US D per kg 1.97 1.99 1.83 1.55 1.64 1.84 2.01 1.82 1.80

S isal "UG grade" US D per kg 1.45 1.40 1.51 1.87 1.80 1.82 1.72 1.72 1.70

T ea "Mombasa auction" US D per kg 2.88 2.40 2.05 2.74 2.30 2.80 2.58 2.19 2.26

C loves (Madagascan cif S ingapore) US D per kg 10.74 11.55 12.09 10.23 8.48 8.81 7.94 7.42 6.99

Maize US D per tonne 298.42 259.39 192.88 169.75 159.16 154.53 164.41 167.50 175.88

246
R ice (T hailand), 5% broken US D per tonne 562.98 505.89 422.83 386.00 396.17 398.92 420.67 408.00 414.00

Wheat (US ), hard red winter US D per tonne 313.24 312.25 284.90 204.47 166.75 174.20 209.93 211.52 201.72

G old US D/troy ounce 1,669.52 1,411.46 1,265.58 1,160.66 1,248.99 1,257.56 1,269.23 1,304.24 1,309.55

C rude oil* US D per barrel 105.01 104.08 96.24 50.75 42.81 52.81 68.35 60.50 65.06

C rude oil** US D per barrel 95.30 94.86 89.09 51.99 45.66 53.12 69.15 63.36 67.03
Bank of Tanzania Annual Report 2018/19

White products*** US D per tonne 990.94 945.29 880.20 629.47 504.56 519.32 666.23 615.77 634.97
Source: http://www.imf.org; worldbank.org/prospects; World Bank Public Ledger and Bloomberg
Note: * denotes average of Brent, Dubai and West Texas Intermediate; ** f.o.b. Dubai; *** Average of premium gasoline, Gas oil and Jet/Kerosene, f. o. b. West Mediterranean; Q, quarter; and UG, under grade
For inquiries contact:
Director of Economic Research and Policy
Bank of Tanzania,
2 Mirambo Street 11884 Dar es Salaam
Tel: +255 22 223 3328/9
http://www.bot.go.tz