Unguja. The Government of Zanzibar has outlined an ambitious development plan for the 2025/26 financial year, targeting five strategic areas with a total budget of Sh3.292 trillion.
The plan, presented by the Minister of State in the President’s Office (Finance and Planning), Dr Saada Mkuya, seeks to enhance human capacity, drive economic transformation, build enabling infrastructure, tap into the blue economy, and promote good governance and resilience.
According to the minister, the proposed budget marks an increase of 57.77 percent from the Sh2.086 trillion allocated in the current financial year.
Focus on human development
Dr Mkuya said the government will continue investing in infrastructure and human resources to ensure better access to quality social services.
“To that end, we plan to begin major upgrades at Mnazi Mmoja Referral Hospital, commence construction of the new Binguni Hospital—intended to serve as a treatment, research and training institution—and build affordable housing in areas such as Chumbuni, Kisakasaka, Nyamanzi, Kwahani, Mfikiwa, Mkungu Malofa and Saateni,” she said.
In the education sector, the government is constructing 1,000 new classrooms, expanding the State University of Zanzibar (SUZA), and building dormitories—all under a Sh1.260 trillion allocation. Plans also include construction of a new national sports stadium in Fumba and district-level sports grounds.
Driving economic reform and investment
To boost economic transformation, the government will channel investments into industrial zones and business parks to attract both local and foreign investors.
Dr Mkuya said emphasis will also be placed on boosting agricultural output through improved production and storage infrastructure, promotion of alternative crops such as spices for export, and implementation of agricultural transformation reforms.
Furthermore, the plan includes expanding the digital economy through the laying of an international undersea fibre-optic cable and the construction of a data centre in Zanzibar. This component has been allocated Sh148.91 billion.
Infrastructure development
The minister revealed that the government will continue modernising air travel facilities by constructing Pemba Airport, a second passenger terminal at Abeid Amani Karume International Airport, and launching the new Nungwi Airport project.
Other infrastructure projects include the construction of 782.9 kilometres of roads on both Unguja and Pemba islands, targeting urban, rural and hotel access routes. The programme will also cover drainage systems and lagoon rehabilitation in urban centres.
A total of Sh1.201 trillion has been earmarked for water and electricity infrastructure, including the rollout of solar energy solutions.
Blue economy
Zanzibar will also deepen investment in its growing blue economy sector. Dr Mkuya said the government plans to build fish processing plants and boost marine and island tourism infrastructure.
In the 2025/26 fiscal year, Sh428.09 billion will be directed towards the construction of fishing infrastructure and integrated ports at Mangapwani, Mpigaduri, and the Shumba Fishing Port.
Strengthening governance
Dr Mkuya said the government is committed to enhancing national security, ensuring access to justice, and safeguarding the environment in the face of climate change.
Key projects under this pillar include the construction of district and regional courts, enhancement of security systems, and climate resilience measures. A total of Sh253.65 billion has been allocated to this priority area.
In addition, she noted that Sh1.247 trillion will be invested in ongoing projects, government-partnered initiatives, and infrastructure support in strategic development zones.
Overall budget and financing structure
For the 2025/26 financial year, Zanzibar plans to spend a total of Sh4.547 trillion. Of this, Sh4.539 trillion is set aside for central government development projects, while Sh9.17 billion will go to local government authorities.
The government expects to finance Sh3.231 trillion—equivalent to 71.2 percent of the development budget—from domestic sources. Development partners will contribute Sh1.308 trillion, or 28.8 percent, comprising Sh962.74 billion in concessional loans and Sh345.35 billion in grants.
Positive economic outlook for 2025
Looking ahead, Dr Mkuya said the economy of Zanzibar is projected to grow by an average of 7.3 percent in 2025, up from 7.1 percent in 2024.
This growth will be driven largely by a projected 12.6 percent increase in tourist arrivals, from 736,755 visitors in 2024 to an estimated 829,929 in 2025.
The minister emphasised the government’s commitment to maintaining single-digit inflation, improving the business environment, and attracting more domestic and foreign investment.
She noted that the private sector is expected to play a larger role, supported by government efforts to stimulate investment, empower citizens economically, and create employment.
“There will also be increased production in the blue economy and more sustainable use of marine resources, particularly after the completion of new marine processing facilities,” she added.
