Tanzania prioritises elections, Afcon in Sh57 trillion budget

Dodoma. The government yesterday unveiled a proposed budget of Sh57.04 trillion for the 2025/26 financial year, marking a 13.4 percent increase from the Sh50.29 trillion allocated in the current financial year.

Presenting the budget framework and expenditure ceiling for the next fiscal year before Parliament’s Budget Committee, the Minister for Finance, Dr Mwigulu Nchemba, stated that Sh40.9 trillion (69.7 percent) of the funds will be sourced from domestic revenue, while Sh16.07 trillion (30.3 percent) will be acquired through loans.

The budget proposal aligns with the Parliament’s Standing Orders, which mandate the government to present its budgetary framework and expenditure limits by March 11 each year, unless the date falls on a weekend.

According to the regulations, all MPs must attend the session chaired by the Prime Minister, and no discussion made during the presentation.

Dr Nchemba outlined six priorities in the 2025/26 budget including settling government debt, public sector salaries, the upcoming elections, strengthening democracy, maintaining peace and security, and preparations for CAF Africa Cup of Nations (Afcon) 2027 which Tanzania, Kenya and Uganda will jointly host.

“This budget includes provisions for implementing the Vision 2050 and considers potential impacts of policy changes by development partners, including the United States,” said Dr Nchemba.

He attributed the increased budget estimates to improved revenue collection strategies and effective fiscal policies.

On foreign reserves, the minister reported that as of December 2024, Tanzania held $5.5 billion, sufficient to cover 4.5 months of imports.

Between July 2024 and January 2025, Tanzania received Sh3.8 trillion in external funding, surpassing the targeted Sh3.3 trillion.

“During this period, the country borrowed Sh1.56 trillion from external commercial sources, representing 89.3 percent of the targeted Sh1.75 trillion. These funds were used for infrastructure projects, including roads, railways, energy, airports and social services,” he said.

An additional Sh3.9 trillion was borrowed domestically, with Sh2.3 trillion allocated for maturing treasury bills and bonds, while Sh1.6 trillion was channelled into development projects, he said.

Social services funding

Meanwhile, the government has reassured Tanzanians that it has assessed the impact of certain donor funding cuts on critical sectors such as health, education, water and employment.

“To address this challenge, among other measures, the government plans to strengthen the AIDS Trust Fund by restructuring and increasing its funding to ensure continued support for treatment of diseases such as HIV/Aids, tuberculosis, malaria, and immunisation programmes,” said Dr Nchemba.

He added that the government aims to enhance alternative financing mechanisms for development projects, including public-private partnerships (PPPs), to increase private sector participation in the economy.

Minister of State in the President’s Office - Planning and Investment, Prof Kitila Mkumbo, reported that the country’s economy continues to grow, with inflation dropping to 3.2 percent in February 2025.

Prof Mkumbo stated that the 2025/26 budget will focus on completing ongoing projects rather than initiating new ones unless they create significant employment opportunities.

He said, currently, 9,711 projects are being implemented across the country, including 17 flagship projects.

Out of the 9,790 projects currently underway, a significant number are at regional and local government levels. Prof Mkumbo highlighted key achievements, including a 63 percent increase in electricity generation, 94 percent rural water supply coverage, and a 173 percent reduction in maternal mortality.

According to him, 2024 has been one of the most successful years for Tanzania due to the implementation of several major projects.

He noted that the current budget marks the final implementation stage of the Vision 2025 framework and the three-year development plan.