Public Debt Implications of Mega Infrastructure Projects in Tanzania’s Standard Gauge Railway (SGR)

This study investigates the fiscal implications of infrastructure-related debt in developing economies, focusing on how such debt influences fiscal sustainability, repayment obligations and long-term public debt burdens. Despite the promise of enhancing regional connectivity and economic competitiveness, excessive reliance on foreign borrowing presents critical risks to national financial stability. Guided by the framework of fiscal sustainability theory, the study aims to identify how debt-financed infrastructure such as Standard Gauge Railway (SGR) projects, affects macroeconomic resilience and intertemporal budget constraints. The study employs a qualitative, case-based analytical approach, utilizing documentary reviews as the primary method. Grey literature and official national budget documents were sourced using search engines like google scholar and institutional websites, while peer-reviewed literature was obtained through academic databases such as Scopus and Web of Science. Keyword search combinations included terms like “infrastructure debt”, “fiscal sustainability”, “SGR projects” and “public debt burden”, linked using Boolean operators (AND, OR). Inclusion criteria focused on literature from 2019 onward related to large-scale infrastructure, borrowing, and fiscal outcomes in emerging economies, while exclusion criteria omitted non-English texts and articles unrelated to sovereign debt management. Through thematic analysis, findings reveal that infrastructure debt negatively impacts fiscal sustainability by increasing debt-to-GDP ratios, elevating interest payments and eroding investor confidence. Repayment obligations contribute to heightened refinancing risks, foreign exchange vulnerabilities and austerity-driven fiscal tightening. In the long term, such debt burdens reduce fiscal flexibility, raise credit risks and impose intergenerational equity concerns, undermining the potential developmental gains of infrastructure investments. In terms of Theoretical and Policy Implications, the findings are supported by the fiscal sustainability theory in emphasizing that unchecked public borrowing without growth-aligned returns deteriorates long-term fiscal health. Policymakers should in this view adopt transparent debt practices, enforce fiscal rules, and ensure infrastructure investments are aligned with national growth strategies. Maintaining fiscal buffers and monitoring debt sustainability indicators are crucial for minimizing systemic risks and preserving economic sovereignty.