By Fatimah Idera
Tanzania plans to increase overall spending by 13.4% in the upcoming fiscal year starting in July, according to a draft budget that prioritizes debt repayment, the cost of the upcoming general election, and the impact of U.S. President Donald Trump’s pause on overseas aid.
According to the budget paper, the East African country plans to spend 57.04 trillion shillings ($22 billion) in the 12 months beginning in July, up from 50.29 trillion shillings in the current fiscal year.
Finance Minister Mwigulu Nchemba presented a paper titled “Budget Framework and Expenditure Ceiling for 2025/26” to the parliamentary committee. The final budget for the upcoming fiscal year is scheduled to be presented in June.
Of the total budget, the government expects to raise 40.97 trillion shillings from domestic revenue sources, while the remaining funds will come from both domestic and external debt, according to the paper.
The report also highlights Tanzania’s efforts to reduce its dependence on unpredictable revenue sources or debt with unfavorable terms.
Impact of U.S. Aid Freeze
Like several other developing nations, Tanzania has been significantly affected by U.S. President Donald Trump’s decision to freeze all foreign aid for 90 days.
The budget accounts for potential economic impacts stemming from changes in policies by development partners, especially the United States.
In the next fiscal year, the government aims to focus on boosting the production of manufactured goods and services, promoting trade and investment, repaying debt and covering government salaries, and funding the 2025 general election while strengthening democracy.
Tanzania is set to hold a general election in October 2025, in which voters will elect the next president, lawmakers, and local government officials.
