Tanzania’s Budget Framework: Praise for Proposals Amid Concerns Over Borrowing

Tanzania’s Finance Minister presented a Sh57.04 trillion budget framework for 2025/26, prioritizing major expenses like elections and AFCON. Stakeholders commend the budget but express concerns over increasing borrowing, urging enhanced financial supervision and greater reliance on domestic revenue to fund priorities while avoiding project delays.

Tanzania’s Finance Minister, Dr. Mwigulu Nchemba, recently presented a budget framework of Sh57.04 trillion for the 2025/26 financial year, highlighting major expenditures such as the General Election, debt repayments, and Africa Cup of Nations preparations. While stakeholders praise the proposals, concerns have arisen regarding the government’s reliance on loans, which may hinder the funding of vital development projects.

To mitigate these challenges, the government has committed to not initiating new projects in the upcoming fiscal year and focusing instead on completing existing initiatives. Dr. Nchemba outlined six priorities, including settling debts, paying salaries, preparing for the elections and AFCON, and fostering peace and stability. A reported 69.7% of the budget will come from domestic sources, while the remaining 30.3% is expected to be sourced externally.

Economist Zacharia Jackson emphasized that while the budget itself is not flawed, the escalating dependency on borrowing is concerning. He highlighted the need for financial supervision to ensure resources are allocated effectively. Jackson remarked that the importance of the AFCON and elections may lead to excessive debt accumulation, stressing that proper planning is essential to avoid exhausting funds that could support development.

Financial analyst Sablina Kaijage echoed Jackson’s worries, indicating that substantial election-related expenditures could delay ongoing projects. She pointed out that unforeseen costs often arise during elections, resulting in overspending. Kaijage advocated for maximizing domestic revenue to lessen reliance on foreign financing, particularly during election periods when external aid typically declines.

Aidan Chedego, a vendor at Saba Saba Market, underscored the critical importance of timely salary payments to civil servants, linking economic stability to consumer behavior. He stated that when salaries are disbursed punctually, it stimulates consumer spending, which is vital for the market.

The prevailing dialogue emphasizes the necessity of financial prudence and resource allocation efficiency to navigate the fiscal complexities that Tanzania faces in the forthcoming financial year.

In summary, while Tanzania’s budget proposals have garnered praise, stakeholders express valid concerns regarding the increasing reliance on loans to finance critical expenditures. The government has committed to prioritizing existing projects and ensuring timely salary payments, which are essential for economic stability. Analysts advocate for careful financial planning and maximizing domestic revenue to mitigate potential challenges as the nation prepares for significant events such as elections and the Africa Cup of Nations.

Original Source: www.thecitizen.co.tz