A survivor has been found inside a capsized Tanzanian ferry two days after the disaster on Lake Victoria.

An engineer, named locally as Alphonce Charahani, was found in an air pocket near the engine of the upturned vessel, as coffins arrived for at least 207 victims of the disaster.

Search efforts continued around the ferry's exposed underside yesterday as families of victims prepared to claim the dead.

No one knows how many people were on board the ferry, which had a capacity of 101. Officials on Friday said at least 40 people had been rescued.

The government's chief secretary John Kijazi announced the rising death toll to reporters after President John Magufuli ordered the arrests of those responsible.

"This is a great disaster for our nation," Magufuli said, announcing four days of national mourning.

The badly overloaded ferry capsized in the final stretch before shore on Thursday afternoon as people returning from a busy market day shifted and prepared to disembark.