The Tanzanian government has declared four days of national mourning following the ferry disaster in Lake Victoria on Thursday.
"I have decided to declare four days of national mourning starting today," President John Magufuli said in a televised address on Friday.
MV Nyerere capsized with hundreds of people and many are still missing.
The vessel was preparing to dock at Ukara Island from Bugolora Island in northern Mwanza when it toppled over.
The President said 131 bodies have been recovered and many more could still be trapped in the capsized ferry.
He has ordered arrest of officials involved in the management of the ferry.
"It appears clear that the ferry was overloaded," he said, adding that it can be linked to negligence and that "arrests have already began."
The head of civil service, Mr John Kijazi, had earlier confirmed that only 40 people were rescued alive on Thursday.
The ferry had a capacity of 100 passengers and 25 tonnes of cargo.
**Story updated to