The Tanzanian government has proposed an 11.58% increase in its budget for the 2025/26 financial year, expanding from Sh49.35 trillion to Sh55.06 trillion.
The proposed budget, presented to Parliament by Finance Minister Dr Mwigulu Nchemba on 1 November 2024, prioritises economic growth, infrastructure development, and social services, while maintaining a balance between development and recurrent spending. Dr Nchemba highlighted that the budget aims to promote long-term sustainable growth, with a particular focus on empowering communities and enhancing social welfare.
Of the total budget, Sh38.6 trillion is allocated to recurrent expenditures, while Sh16.46 trillion will be directed towards development projects. Key infrastructure initiatives include the ongoing development of the Standard Gauge Railway and the Julius Nyerere Hydropower Project, which are expected to significantly improve transportation networks and energy security across the country. Industrial expansion is also a priority, as the government aims to enhance Tanzania’s manufacturing capabilities and export potential.
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In addition to infrastructure, the budget allocates significant funds to education and healthcare. The government plans to expand access to education by continuing its free education programme and building new schools, particularly in underserved regions. Healthcare investment will focus on improving service delivery through the construction of new health centres and hospitals, ensuring that essential services are available to more people. Climate resilience is also a central concern, with investment in sustainable agriculture, water management, and resource conservation to mitigate the impacts of climate change on food production and infrastructure.
To finance the budget, the government expects to raise Sh38.96 trillion in domestic revenue through enhanced tax collection measures and investment-friendly reforms. This will be supplemented by grants, concessional loans, and commercial loans from international partners.
The Parliamentary Budget Committee has urged the government to increase domestic revenue reliance, which currently accounts for approximately 70% of the budget, in order to further reduce dependence on external funding. Tanzania’s economy is projected to grow by 5.8% in 2025, with inflation expected to remain stable between 3-5%.
