In 2024/2025, Tanzania’s TZS 49.35 trillion budget achieved 5.5% real GDP growth, collecting TZS 45.07 trillion (89.6% of target) and spending TZS 15.75 trillion on development, including TZS 1.68 trillion for SGR and TZS 574.8 billion for rural electrification. Social investments like TZS 444.7 billion for fee-free education and TZS 708.6 billion in fertilizer subsidies supported low-income citizens, reducing costs and improving access.

The TZS 56.49 trillion 2025/2026 budget, an 11.6% increase, targets 6.0% growth by raising domestic revenue to TZS 38.9 trillion (16.7% of GDP) and allocating TZS 16.4 trillion for development, prioritizing agriculture, industry, and services. Continued subsidies, education, and healthcare investments aim to further reduce poverty (8.0% extreme poverty in 2018) and enhance livelihoods for low-income Tanzanians.

2024/2025 Budget Performance (Total: TZS 49.35 trillion, USD 18.85 billion)

The 2024/2025 budget, themed “Realising Competitiveness and Industrialisation for Human Development,” aimed to achieve 5.4% real GDP growth while prioritizing infrastructure, social services, and economic inclusion. Key performance highlights by May 2025:

• Real GDP Growth: Achieved 5.5%, surpassing the 5.4% target, driven by agriculture (26.5% of GDP), construction (13.2%), and mining (9.0%).
• Revenue Collection: Collected TZS 45.07 trillion (89.6% of TZS 50.29 trillion target), with domestic revenue at TZS 29.83 trillion (15.0% of GDP, up from 13.7% in 2020/2021) due to Tanzania Revenue Authority (TRA) reforms and mining contributions.
• Expenditure: Disbursed TZS 42.90 trillion (85.3% of TZS 50.29 trillion), including TZS 30.63 trillion for recurrent expenditure (90.8%) and TZS 15.75 trillion for development (95.1%), with notable allocations of TZS 1.68 trillion for Standard Gauge Railway (SGR), TZS 1.58 trillion for roads/bridges, and TZS 574.8 billion for rural electrification.
• Inflation: Maintained at 3.1% (within 3.0–5.0% target), ensuring affordability for low-income households.
• Trade Balance: Deficit narrowed to USD 5,157.2 million from USD 6,032.3 million in 2023, with exports at 20.3% of GDP, driven by tourism (1.4 million visitors) and gold.
• Social Spending: Allocated TZS 444.7 billion for fee-free education, TZS 636.0 billion for student loans, TZS 414.7 billion for healthcare supplies, and TZS 378.7 billion for water projects, directly benefiting low-income citizens.
• Debt: Public debt at TZS 107.70 trillion (40.3% of GDP, below 55% threshold), with external debt at USD 32.89 billion by September 2024, indicating fiscal sustainability.

Impact on Low-Income Citizens:

• Subsidies: TZS 708.6 billion for fertilizer subsidies (2021/22–2023/24) reduced farming costs by 50% per bag, boosting agricultural productivity for low-income farmers.
• Fuel Subsidies: TZS 100 billion monthly in 2022 stabilized transport and commodity prices.
• Social Services: Fee-free education and healthcare investments improved access, while rural electrification (TZS 574.8 billion) and water projects (TZS 378.7 billion) enhanced livelihoods and small business opportunities.
• Job Creation: Infrastructure projects (e.g., SGR, roads) generated employment, supporting low-income households.

Challenges:

• Revenue shortfall (89.6% of target) limited spending capacity.
• External borrowing (TZS 2.43 trillion, 81.3% of target) and currency depreciation (TZS 2,610.50/USD) increased import costs, affecting low-income consumers.
• TRA faced criticism for tax administration issues, prompting a presidential commission review.

2025/2026 Budget Overview (Total: TZS 56.49 trillion, USD 22.07 billion)

The 2025/2026 budget, themed “Inclusive Economic Transformation through Domestic Resource Mobilization and Resilient Strategic Investment for Job Creation and Improved Livelihoods,” represents an 11.6% increase from TZS 49.35 trillion in 2024/2025. It aims to achieve 6.0% real GDP growth, with a budget deficit of 3.0% of GDP, and prioritizes agriculture, industry, services, and social inclusion.

Key Financial Structure:

• Total Budget: TZS 56.49 trillion (USD 22.07 billion at TZS 2,560/USD, inferred from exchange rate context).
• Revenue Projections:
  • Domestic revenue: TZS 38.9 trillion (16.7% of GDP, up from 15.8% in 2024/2025), with TRA targeting TZS 29.41 trillion (13.3% of GDP).
  • External sources: TZS 16.02 trillion, including TZS 1.02 trillion in aid, TZS 5.6 trillion in concessional loans, and TZS 9.4 trillion in commercial loans.
• Expenditure:
  • Recurrent: TZS 38.6 trillion (68.3% of budget) for wages, debt servicing, and elections.
  • Development: TZS 16.4 trillion (29.0% of budget) for strategic projects (e.g., SGR, Julius Nyerere Hydropower Project [JNHPP]).
• Sectoral Allocations (partial, from web sources):
  • Tourism: TZS 359.9 billion for promotion, infrastructure, and conservation ().
  • Energy: TZS 2.2 trillion for power generation, rural electrification, and oil/gas infrastructure.

Macroeconomic Targets (Budget Speech):

• Real GDP growth: 6.0% in 2025, up from 5.5% in 2024.
• Inflation: 3.0–5.0% to maintain affordability.
• Domestic revenue: 16.7% of GDP to reduce borrowing reliance.
• Foreign exchange reserves: ≥4 months of imports (4.4 months in 2024).

Sector-Specific Contributions to Economic Growth (2025/2026)

The 2025/2026 budget focuses on agriculture, industry, and services to drive 6.0% GDP growth, with specific measures to support low-income Tanzanians, building on 2024/2025 outcomes.

a. Agriculture

2024/2025 Performance:

• Contributed 26.5% to GDP, employing ~65% of the workforce.
• TZS 708.6 billion in fertilizer subsidies (2021/22–2023/24) reduced costs, boosting cash crop output (Budget Speech).
• Investments via Tanzania Agricultural Development Bank (TADB) and Agricultural Seed Agency (ASA) enhanced productivity.

2025/2026 Budget Priorities:

• Continued fertilizer subsidies and irrigation expansion to improve resilience and yields.
• TADB credit expansion, leveraging 21.2% private sector credit growth in 2024.
• Modernization (quality seeds, value addition) to boost exports (11.6% of GDP for goods in 2024).

Projected Impact:

• Agriculture could contribute 1.0–1.5 percentage points to GDP growth (assuming 4–6% sectoral growth).
• Subsidies and credit access increase incomes for low-income farmers, reducing extreme poverty (8.0% in 2018).
• Export growth (e.g., cashew nuts, coffee) strengthens reserves (USD 5.7 billion in 2024), stabilizing prices.

b. Industry (Manufacturing, Mining, Construction)

2024/2025 Performance:

• Construction (13.2% of GDP) and mining (9.0%) drove growth via TZS 1.68 trillion for SGR, TZS 1.58 trillion for roads, and TZS 574.8 billion for JNHPP/rural electrification.
• Mining revenue rose due to reforms and global demand (e.g., gold).
• Investment-to-GDP ratio at 37.1% supported industrial expansion.

2025/2026 Budget Priorities:

• Completion of SGR and JNHPP (2,115 MW) to reduce logistics/energy costs.
• TZS 2.2 trillion for energy projects, including rural electrification and gas infrastructure.
• Support for National Development Corporation (NDC) and Small Industries Development Organization (SIDO) to expand manufacturing.

Projected Impact:

• Industry could contribute 1.5–2.0 percentage points to GDP growth (assuming 7–8% sectoral growth, ~20% GDP share).
• Job creation from infrastructure projects (e.g., SGR, roads) benefits low-income workers.
• Cheaper energy (JNHPP) and import substitution reduce business costs, lowering prices for consumers.

c. Services (Tourism, Transport, Trade, ICT)

2024/2025 Performance:

• Services contributed ~40–50% to GDP, with exports at 20.3% of GDP, led by tourism (USD 7.2 billion from 1.4 million visitors) and transport.
• ICT grew at 12.5%, driven by digital infrastructure.
• Current account deficit narrowed to -2.6% of GDP due to tourism receipts.

2025/2026 Budget Priorities:

• TZS 359.9 billion for tourism promotion, infrastructure, and conservation.
• Investments in Air Tanzania (ATCL), ports (TPA), and SGR to enhance trade and transport.
• ICT expansion (13.5% growth projected by 2026) via digital services and mobile penetration.

Projected Impact:

• Services could contribute 2.5–3.0 percentage points to GDP growth (assuming 6–7% sectoral growth).
• Tourism and transport jobs (e.g., hospitality, logistics) are accessible to low-income workers.
• Reduced transport costs (SGR) and digital access lower prices and improve livelihoods.

Support for Low-Income Tanzanians

The 2025/2026 budget emphasizes inclusive growth to address poverty (26.4% abject poverty, 8.0% extreme poverty in 2018):

• Education: Sustained or increased funding for fee-free education (TZS 444.7 billion in 2024/2025) and student loans (TZS 636.0 billion) to enhance access and skills for low-income households.
• Healthcare: Investments in universal health insurance, medicines (TZS 414.7 billion in 2024/2025), and facilities (TZS 47.2 billion) reduce healthcare costs.
• Subsidies: Likely continuation of fertilizer (TZS 708.6 billion historically) and fuel subsidies to lower farming and transport costs.
• Water and Energy: Expanded water projects (TZS 378.7 billion in 2024/2025) and rural electrification (TZS 2.2 trillion energy budget) support small businesses and living standards.
• Social Safety Nets: Productive Social Safety Nets (PSSN) cash transfers reduce malnutrition and poverty, with plans for expansion.
• Job Creation: Infrastructure (SGR, JNHPP) and SIDO programs create jobs and support entrepreneurship for low-income groups.

Projected Impact: These measures could reduce extreme poverty below 8.0% by improving incomes, access to services, and affordability, aligning with the Third Five-Year Development Plan (FYDP III) goal of 8 million jobs by 2026.

Fiscal and Macroeconomic Stability

• Revenue: Domestic revenue target of TZS 38.9 trillion (16.7% of GDP) reduces reliance on external loans (TZS 16.02 trillion, 28.4% of budget).
• Debt: Public debt at 46.5% of GDP (2024, projected to remain sustainable) and external debt at USD 34.1 billion (March 2025) support fiscal stability.
• Inflation: Target of 3.0–5.0% protects low-income purchasing power, despite currency depreciation risks (TZS 2,585/USD in 2024).
• Trade: Exports projected to grow by 6.0% in 2025 (minerals, agriculture, tourism), narrowing the trade deficit (USD 5,157.2 million in 2024) and stabilizing reserves (USD 5.7 billion).

Projected Performance of 2025/2026 Budget

The 2025/2026 budget is poised to achieve 6.0% GDP growth if:

• Revenue Targets Are Met: Exceeding TZS 38.9 trillion (16.7% of GDP) enables robust development spending (TZS 16.4 trillion).
• Strategic Projects Advance: Completion of SGR and JNHPP reduces costs, boosting productivity.
• Global Conditions Support Exports: Stable commodity prices and tourism demand (TZS 359.9 billion allocation) drive growth.
• Inclusive Policies Succeed: Subsidies, social spending, and job creation uplift low-income productivity.

Comparative Budget Performance:

• 2024/2025: TZS 49.35 trillion achieved 5.5% growth despite revenue shortfalls (89.6% of TZS 50.29 trillion), with strong social spending (e.g., TZS 444.7 billion for education) supporting low-income citizens.
• 2025/2026: TZS 56.49 trillion (11.6% increase) targets 6.0% growth with higher domestic revenue (16.7% vs. 15.0% of GDP) and development spending (TZS 16.4 trillion vs. TZS 15.75 trillion), enhancing inclusivity via sustained subsidies and services.

Challenges:

• Revenue Risks: TRA’s 2024/2025 shortfall (89.6%) and ongoing tax administration issues may persist.
• External Pressures: Currency depreciation (TZS 2,585/USD) and global shocks could raise import costs.
• Implementation: Delays in projects (e.g., SGR) could limit growth impact.

Tanzania’s Budget and Economic Performance: Key Figures (2024–2026)