Abstract: | Tanzania's external debt rose rapidly on account of new borrowing, compounded by the build-up of huge arrears, in the 1980s and early 1990s. A peak of 8 billion US dollars was reached in 1994 and 1995. The build-up of the arrears was partly due to low capacity to make scheduled repayments on time. In the case of commercial debt, however, the main reason was the difficulty the government faced in externalizing repayments which were made on time in local currency by the debtors. In September 1997, the government prepared a National Debt Strategy as guidance for proper debt management and its ultimate reduction to a manageable level. Measures pursued to reduce the country's indebtedness include the Debt Conversion Programme (DCP), the Debt Buyback Scheme (DBB), the Multilateral Debt Fund (MDF), and HIPC (Highly Indebted Poor Countries) initiatives. In subsequent years Tanzania's external debt has marginally declined. App. [ASC Leiden abstract] |