The Tanzanian government has proposed an 11.58% budget increase for 2025/26, aiming to expand from Sh49.35 trillion to Sh55.06 trillion, as outlined in the Budget Framework Document presented to Parliament by Finance Minister Dr. Mwigulu Nchemba on November 1, 2024.
The new budget prioritizes economic growth, infrastructure, social services, and governance, balancing development with recurrent spending. Dr. Nchemba emphasized that this budget supports long-term sustainable growth, focusing on empowering communities and fostering social welfare.
A substantial allocation of Sh38.6 trillion is designated for recurrent expenditures, while Sh16.46 trillion targets development projects. Key infrastructure priorities include energy, transportation, and industrial expansion, with flagship projects like the Standard Gauge Railway and the Julius Nyerere Hydropower Project set to enhance connectivity and energy security.
Funding will also support education and healthcare initiatives, aiming to improve service access and quality through free education programs and new schools and health centers, especially in underserved regions.
Climate resilience is also a focus, with investments directed toward sustainable agriculture, water management, and resource conservation to tackle climate change impacts on food production and infrastructure.
To support the budget, the government expects to raise Sh38.96 trillion in domestic revenue through improved tax collection and investment-friendly reforms, supplemented by grants, concessional loans, and commercial loans from international partners. The Parliamentary Budget Committee urged the government to increase domestic revenue reliance, currently covering about 70% of the budget.
Despite global economic uncertainties, Tanzania’s economy is projected to grow by 5.8% in 2025, with inflation stabilized between 3-5%.
