Tanzania’s budget framework for 2025/26 amounts to Sh57.04 trillion, focusing heavily on significant expenditures like the General Election and debt repayments. Stakeholders, including economists and market vendors, express concerns over excessive borrowing and its impact on development funding. The government aims to address these issues by prioritizing existing projects and enhancing domestic revenue to avoid over-dependence on external financing.
Tanzania’s proposed budget framework for 2025/26 is set at Sh57.04 trillion, but stakeholders express concerns about the government’s heavy reliance on loans. With significant expenditures such as the General Election, debt repayment, and preparations for the Africa Cup of Nations (AFCON), analysts highlight that these commitments might hinder funding for essential development projects.
In response to these concerns, the government has decided to postpone launching new projects in the upcoming fiscal year, focusing instead on completing existing initiatives to ensure fiscal discipline. During the budget presentation, Finance Minister Dr. Mwigulu Nchemba outlined six priorities for the budget: debt settlement, salary payments, election preparation, AFCON, strengthening democracy, and maintaining peace.
The budget allocation entails Sh40.09 trillion (69.7%) sourced domestically and Sh16.7 trillion (30.3%) from external funding. Economist Zacharia Jackson pointed out that while the budget’s foundations are sound, there is a rising danger of increased borrowing. He underscored the importance of careful planning to avoid depleting funds for development in favor of election and AFCON preparations.
Sablina Kaijage, a financial analyst, voiced similar concerns regarding the budget’s allocation for elections, which might affect ongoing projects. “Allocating funds for elections is challenging; unforeseen expenses often lead to overspending,” he remarked. She emphasized the importance of enhancing domestic revenue rather than excessively depending on external financing, especially during elections when aid may decline.
Vendor Aidan Chedego highlighted the necessity of timely salary payments to civil servants, stating, “Peace and stability are important, but for us traders, business is the top priority. If salaries are paid regularly, people will continue shopping, keeping the economy moving.”
As discussions on the budget unfold, experts assert that financial prudence and proper resource allocation will be vital in navigating Tanzania’s fiscal landscape.
Tanzania’s budget for the 2025/26 fiscal year, while aimed at addressing essential needs, raises significant concerns over the country’s increasing reliance on loans. Stakeholders emphasize the importance of prioritizing financial discipline and enhancing domestic revenue to stabilize the economy. The government’s decision to focus on ongoing projects rather than initiating new ones is a strategic move, yet the challenges of timely salary payments and election funding remain critical issues that must be addressed to ensure economic stability and growth.
Original Source: www.thecitizen.co.tz
