DAR ES SALAAM, June 15 (Xinhuanet) -- Although the G8 countries has struck a landmark deal to write off 40 billion US dollars multilateral debt owed by 18 countries, including Tanzania, for most Tanzanians, their country's current external debt is still a heavy burden for them.

    Tanzania's total external debt stock now stands at 9.5 trillion shillings (8.614 billion US dollars), averaging 246 dollars per capita among the country's population of 35 million people.

    This east African country has been listed as among the world's poorest countries with most of its rural residents living on less than a dollar a day.

    Donor dependence is the major cause of the country's ever increasing debt burden, as Tanzania only had an external debt total of 1.445 billion dollars 35 years ago.

    But the country has kept borrowing an average of 205 million dollars a year between 1970 and April this year, to augment the country's debt by 496 percent.

    In fiscal 2004/2005, 40 percent of the government budget came from outside assistance in the form of grants and concessional loans whereas this year's share rose to 41 percent.

    The country therefore has to spend 12 percent of its annual budget on servicing the debt.

    Tanzanian President Benjamin William Mkapa disclosed last week that his government has to spend 12.5 percent or 523 million dollars of government expenditures on servicing the debt this year.

    The matter could have been even worse without the debt relief or debt write-off by foreign governments or multilateral creditors.

    By the end of April this year, total debt relief since Tanzania qualified for clemency under the Highly Indebted Poor Countries (HIPC) arrangement has totaled upwards of 3 billion dollars.

    Tanzania qualified for the HIPC clemency in April 2000 due to its 14-year steady implementation of macro-economic reforms and poverty reduction.

    The Tanzanian government has promised to use the debt relief considered by the Group of Eight countries right now to boost development in the education, health and infrastructure sectors.

    "We are receiving the news with a lot of hope for our people," governor of Tanzania's central bank, Daudi Balali was quoted as saying after the G8's decision. "We can expand health and education services with this relief. We will also be able to expand our infrastructure."

    For ordinary Tanzanians, previous debt relief have resulted in some tangible outcome that couples with their daily lives.

    As many as 1.6 million more school age children throughout the country have got enrolled into primary schools after the government had stopped charging school fees. Enditem