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Stakeholders praise Tanzania's budget proposals but question too much borrowing
What you need to know:
- With major expenses such as the General Election, debt repayments, and preparations for the Africa Cup of Nations (AFCON) outlined in the budget, analysts warn that these financial commitments could complicate funding of development projects
Dodoma. A day after the Tanzanian government revealed its Sh57.04 trillion budget framework for the 2025/26 financial year, economists and citizens have raised alarms about the country’s increasing reliance on loans to finance key expenditures.
With major expenses such as the General Election, debt repayments, and preparations for the Africa Cup of Nations (AFCON) outlined in the budget, analysts warn that these financial commitments could complicate funding of development projects.
Aware of these concerns, the government has pledged not to launch new projects in the upcoming fiscal year.
Instead, it will focus on completing ongoing initiatives, a strategy aimed at ensuring financial discipline.
Presenting the budget framework on Tuesday, March 11, Finance Minister Dr Mwigulu Nchemba highlighted six key priorities: settling government debts, paying salaries, preparing for the elections and Afcon, strengthening democracy, and maintaining peace and stability.
Dr Nchemba revealed that Sh40.09 trillion (69.7 percent) of the budget would be sourced domestically, while Sh16.7 trillion (30.3 percent) would come from external funding.
Zacharia Jackson, an expert from Mwanza noted that while the budget itself is not inherently problematic, there is a growing risk of increased government borrowing.
“The set priorities are critical and demand substantial funding, which may lead to more debt accumulation. Afcon is important for the country’s image, but elections are even more crucial. Without careful planning, funds may be exhausted in these areas, leaving little for development,” he cautioned.
Jackson stressed the need for strict financial supervision to ensure effective allocation and expenditure.
Financial analyst, Sablina Kaijage, echoed similar concerns, warning that a large portion of the budget will be directed towards elections, which could delay even ongoing projects.
“Allocating sufficient funds for elections is challenging, as unforeseen expenses often arise, leading the government to spend more than initially planned. We must focus on maximising domestic revenue rather than over-relying on external financing,” she said.
Ms Kaijage further noted that external aid often declines during election periods, making it imperative for the country to be self-sufficient in funding key activities.
A second-hand clothing vendor at Saba Saba Market, Aidan Chedego, stressed the importance of ensuring that civil servants receive their salaries on time.
“Peace and stability are important, but for us traders, business is the top priority. If salaries are paid regularly, people will continue shopping, which keeps the economy moving,” he said.
As the debate continues, analysts insist that financial prudence and efficient resource allocation will be crucial in navigating the fiscal challenges ahead.
