Tanzania's budget totals TZS 56.49 trillion (approximately USD 22.07 billion), representing an 11.6% increase from the previous year. The budget aims to achieve 6% GDP growth in 2025, maintain inflation between 3-5%, and increase domestic revenue collection to 16.7% of GDP.
Tanzania’s National Budget, amounting to TZS 56.49 trillion (an 11.6% increase from the previous year), is not merely a fiscal plan but a direct intervention in the daily economic realities of households and businesses. Anchored on a 6.0% GDP growth target, inflation control within 3–5%, and increased domestic revenue mobilisation to 16.7% of GDP, the budget seeks to balance cost-of-living pressures, income growth, and business competitiveness in a tightening global economic environment.
For households, the budget’s meaning is reflected in how it influences prices, access to basic services, disposable income, and employment opportunities. With headline inflation at 3.5% (October 2025)—within the government’s target—macroeconomic stability has largely been preserved. However, this stability is unevenly felt. Food inflation stands at 7.4%, significantly above overall inflation, directly affecting low- and middle-income families who allocate a larger share of income to food. To cushion these pressures, the budget allocates TZS 708.6 billion for fertilizer subsidies, TZS 444.7 billion for education, and TZS 414.7 billion for healthcare, lowering essential household expenditures and supporting rural livelihoods. At the same time, new levies—such as the TZS 10 per litre fuel levy and increased excise duties on selected products—introduce modest upward pressure on transport and energy costs, particularly for urban middle-income households.
For businesses, the budget signals both opportunity and adjustment. Strong revenue performance (106.1% of target by September 2025) and high development expenditure execution (98.5%) indicate an active government spending environment that benefits contractors, suppliers, and service providers. Access to finance has improved, with private sector credit growing by 16.1% year-on-year, supported by stable interest rates and increased liquidity. Sectorally, the budget prioritizes manufacturing (18.12% of total allocation), energy, transport infrastructure, and agriculture, where credit growth reached 25.6%, reinforcing agribusiness expansion. Export-oriented activities are further supported by strong external sector performance, with exports growing by 19.8% and the current account deficit narrowing by 23.3%, contributing to a 9.5% appreciation of the Tanzanian shilling, which lowers import costs for firms reliant on imported inputs.
However, the budget also raises the cost of compliance and taxation for some businesses. The increase in the Alternative Minimum Tax to 1%, the introduction of a 10% withholding tax on retained earnings, and new excise duties on selected manufactured and imported goods may constrain reinvestment and margins, especially for small and medium-sized enterprises. Notably, despite the large budget allocation to manufacturing, credit growth to the sector remains low at 5.2%, suggesting a gap between fiscal ambition and on-the-ground financing outcomes.
Overall, the 2025/26 Budget means that households benefit from macroeconomic stability and sustained social spending, though rising food prices remain a key concern, while businesses operate in a generally supportive growth environment characterized by improved infrastructure, expanding credit, and stable demand—but with heightened tax and compliance expectations. In essence, the budget redistributes resources toward long-term growth and stability, while requiring households and firms to navigate short-term cost adjustments as the economy transitions toward higher productivity and domestic revenue reliance. Read More: Tanzania Economic Updates December 2025
The early implementation of the 2025/26 Budget shows that macroeconomic stability is translating into tangible benefits for households, although these gains are being partially offset by rising food and energy costs.
First, inflation remains within the government’s target range, with headline inflation recorded at 3.5% in October 2025. This has helped preserve household purchasing power, particularly for non-food items such as clothing, utilities, and basic services, where price increases remain subdued.
Second, the appreciation of the Tanzania shilling by 9.5% year-on-year, from TZS 2,693 per USD in October 2024 to TZS 2,452 per USD in October 2025, has reduced the cost of imported goods. This benefits households through lower prices for imported food items, fuel-related inputs, medicines, and consumer goods, while also helping to contain inflationary pressures.
Third, strong government revenue performance—106.1% of the target by September 2025— has enabled continued funding of essential public services. This supports sustained delivery of education, healthcare, water, and social services, reducing out-of-pocket expenditure for households and improving access to basic needs.
Fourth, employment and income opportunities are expanding, supported by private sector credit growth of 16.1%. Increased lending to sectors such as agriculture, trade, tourism, and mining is translating into higher economic activity, job creation, and more stable household incomes, particularly for informal and SME-linked households.
Finally, borrowing costs for households have declined modestly, with the average lending rate falling from 15.67% to 15.19%. While still relatively high, this reduction improves affordability of personal loans, mortgages, and SME-related household enterprises, supporting consumption and small-scale investment.
Despite these gains, food inflation remains the most significant pressure on household welfare. Food inflation stood at 7.4% in October 2025, more than double the headline rate, disproportionately affecting low- and middle-income families who spend a larger share of their income on food.
In addition, energy and utilities inflation increased to 4.0%, reflecting higher fuel-related costs. The introduction of a TZS 10 per litre fuel levy and other transport-related charges has added upward pressure on commuting and logistics costs, indirectly feeding into household expenses.
Urban middle-income households are experiencing mixed outcomes. While they benefit from stable inflation and exchange rate gains, higher transport costs, vehicle-related levies, and selective excise duties are eroding disposable income, particularly for salaried workers.
Overall Assessment for Households:
Grade: B+ – The budget is delivering on macroeconomic stability and service provision, but rising food prices remain a critical challenge that weakens household welfare gains.
For businesses, the budget is creating a generally supportive operating environment, anchored in strong public spending execution, expanding credit, and improved external sector performance. However, tax and compliance pressures are weighing on investment decisions, particularly in manufacturing.
Credit availability has improved significantly, with private sector credit expanding by 16.1% year-on-year. This indicates stronger bank lending appetite and improved liquidity, supporting business expansion, working capital financing, and investment across multiple sectors.
Sectoral performance data shows that mining (29.7%), agriculture (25.6%), and tourism-related activities (23.2%) are responding strongly to the budget and broader economic conditions. These sectors are benefiting from targeted incentives, export demand, infrastructure development, and improved access to finance.
Cash flow conditions for compliant businesses have improved due to VAT refunds being processed within 30 days, reducing liquidity constraints—especially for exporters and capital-intensive firms.
Public investment is translating into real economic activity, with development expenditure execution reaching 98.5% by September 2025. Ongoing infrastructure projects in transport, energy, and logistics are lowering operational costs, improving market access, and generating business opportunities in construction, supply chains, and services.
Externally, export growth of 19.8%, led by gold and traditional exports, has expanded market opportunities for producers and exporters, while improved foreign exchange availability supports import-dependent businesses.
Despite these positives, the manufacturing sector is underperforming relative to budget priorities. While it received 18.12% of the total budget allocation, credit growth to manufacturing remains low at 5.2%, indicating weak transmission of fiscal support into private investment.
Tax policy changes are also affecting business sentiment. The increase in the Alternative Minimum Tax to 1% raises the tax burden for low-margin and loss-making firms, while the 10% withholding tax on retained earnings reduces internally generated funds available for reinvestment and expansion.
Additionally, new compliance and administrative requirements, including enhanced electronic invoicing and reporting obligations, are increasing operating and compliance costs—particularly for SMEs and informal-sector businesses transitioning into the formal economy.
Overall Assessment for Businesses:
Grade: B – The business environment remains broadly positive, supported by credit growth, infrastructure spending, and export performance, but manufacturing sector response and tax-related investment constraints require urgent policy attention.
| Indicator | 2024/25 | 2025/26 Target | Impact |
| Real GDP Growth | 5.5% | 6.0% | More economic opportunities |
| Inflation Rate | 3.1% | 3.0-5.0% | Stable prices for households |
| Domestic Revenue | 15.8% of GDP | 16.7% of GDP | Higher tax collection |
| Tax Revenue | 12.6% of GDP | 13.3% of GDP | More government services |
| Budget Deficit | 3.4% of GDP | 3.0% of GDP | Improved fiscal stability |
| GDP Size | TZS 148.5 trillion | TZS 156.6 trillion | Growing economy |
A. DIRECT HOUSEHOLD BENEFITS
| Sector | Allocation (TZS Billion) | What It Means for Households |
| Education | 444.7 | Free education continues, reducing family costs |
| Healthcare | 414.7 | Improved access to medical services, lower healthcare costs |
| Fertilizer Subsidies | 708.6 | Lower farming costs for rural families |
| Student Loans | 636.0 | Access to higher education for youth |
| Energy Development | 2,200.0 | Rural electrification improving living standards |
| Water Projects | 378.7 | Better access to clean water |
| Item | Previous | New | Household Impact |
| Motorcycle Annual Tax | TZS 290,000 | TZS 120,000 | Savings of TZS 170,000 for bodaboda operators |
| Commercial Motorcycle Fee | Paid annually | TZS 170,000 (once every 3 years) | Lower transport costs |
| VAT on Online Purchases | 18% | 16% | Cheaper online shopping |
| Fertilizers | Standard VAT | Zero-rated for 3 years | Lower food production costs |
| Textiles | Standard VAT | Zero-rated for 1 year | Cheaper clothing |
| Newspapers | Standard VAT | VAT exempt | Lower information access costs |
| Item | New Tax/Levy | Household Impact |
| Fuel Levy | TZS 10 per liter | Higher transport and energy costs |
| Alcohol Excise Duty | USD 0.02-0.05 per liter | More expensive alcoholic beverages |
| Vehicle Import Levy | Up to TZS 200,000 | Higher car ownership costs |
| Airline Tickets | TZS 1,000 levy | More expensive air travel |
| Train Tickets | TZS 500 levy | Increased rail transport costs |
| Electronic Cigarettes | 30% excise duty | Higher costs for e-cigarette users |
| Gaming Stakes | 10% excise duty | Higher costs for betting |
New excise duties on alcohol, the TZS 10 per liter fuel levy, and vehicle import levies may increase household expenses, particularly for middle-income families. However, sustained subsidies, education support, and healthcare allocations directly benefit low-income households.
| Household Type | Overall Impact |
| Low-Income/Rural | Positive - benefits from subsidies, education, healthcare outweigh new taxes |
| Middle-Income Urban | Mixed - benefits from some tax reliefs but faces higher fuel and vehicle costs |
| High-Income | Slightly negative - more taxes on luxury items and retained earnings |
| Sector | Allocation (TZS Trillion) | % of Budget | Business Opportunities |
| Manufacturing | 10.24 | 18.12% | Major government focus, incentives for production |
| Agriculture | 1.90 | 3.36% | 203.6% increase from 2021/22, farming opportunities |
| Tourism | 0.36 | 0.64% | Infrastructure development for AFCON 2027 |
| Energy | 2.20 | 3.89% | Rural electrification, hydropower projects |
| Transport Infrastructure | Major allocation | - | SGR, ports, roads development |
| Measure | Details | Business Benefit |
| VAT Refunds | Within 30 days of application | Improved cash flow |
| Tea Processing | Exempt from Alternative Minimum Tax for 3 years | Relief for struggling tea businesses |
| Gold Sales to BoT | 0% VAT | Increased profitability for gold traders |
| Charitable Institutions | Income tax exempt | Support for NGOs in health/environment |
| Local Manufacturers | VAT exemptions on fertilizers, pesticides, edible oils | Lower production costs |
| Hotel Levy | Reduced from 10% to 2% | Lower costs for hospitality businesses |
| Service Levy | Capped at 0.25% of gross income | Reduced burden on service providers |
| Loading/Offloading Fees | Abolished | Lower logistics costs |
| Measure | Details | Business Challenge |
| Alternative Minimum Tax | Increased from 0.5% to 1% | Higher minimum tax burden |
| Withholding Tax on Retained Earnings | 10% WHT on undistributed profits | Reduces funds available for reinvestment |
| EPZ/SEZ Local Sales | Removal of 10-year tax holiday | Higher taxes for export processing zones |
| Gaming Commissions | 10% WHT | Reduced margins for gaming operators |
| Electronic Receipts | Mandatory fiscalized receipts for tax deductions | Compliance costs |
| Excise Duties | New duties on crisps, ice cream, sausages, imported soaps, margarine | Higher costs for food processors and importers |
| Carbon Emissions Levy | TZS 22,000 per ton | Environmental compliance costs |
| Mandatory Travel Insurance | USD 44 for foreign visitors | Potential tourism deterrent |
| Requirement | Impact on Business |
| Integration of invoicing systems with TRA | Enhanced tax compliance monitoring |
| IPSAS reporting and new audit deadlines | Stricter financial reporting for public entities |
| VAT collection agency mechanism | 3% VAT collection on vendor payments |
| Monthly contributions from public entities | 15-60% of gross revenue contributions required |
| Measure | Impact |
| TZS 708.6 billion fertilizer subsidies | Lower input costs, higher productivity |
| Zero-rated VAT on pesticides and fertilizers | Reduced operating costs |
| Tanzania Agricultural Development Bank loans | Access to capital for expansion |
| Irrigation projects | Improved farming efficiency |
Outlook: The sector contributed 26.5% to GDP and benefits from continued subsidies to boost yields. Highly positive for agribusinesses.
| Opportunity | Details |
| TZS 10.24 trillion allocation | Massive government investment |
| VAT exemptions for local producers | Cost advantages over imports |
| Support for cotton-based clothing | Local textile industry support |
| Removal of IDL on clinker | Lower costs for cement manufacturers |
Outlook: The government emphasized manufacturing as key to boosting GDP and employment, receiving 18.12% of the national budget. Very positive for manufacturers.
| Measure | Impact |
| 20% of gold output for local processing | Value addition requirements |
| 0% VAT on gold sales to BoT | Tax benefits |
| 0.1% mining levy | Funds universal health insurance |
Outlook: Mixed - benefits from VAT relief but faces mandatory local processing requirements.
| Sector | Growth Rate 2024 | Budget Support |
| Information & Communication | 14.3% | Digital infrastructure investment |
| Finance & Insurance | 13.8% | Strong credit growth to private sector |
| Tourism | - | TZS 359.9 billion for AFCON 2027 preparations |
| Arts & Entertainment | 17.1% | Highest growth sector |
Outlook: Services sector shows strong growth, particularly ICT and finance.
| Project | Investment | Business Impact |
| Standard Gauge Railway (SGR) | TZS 1.68 trillion (2024/25) | Reduced transport costs, improved logistics |
| Julius Nyerere Hydropower Plant | Major ongoing project | Cheaper electricity, energy security |
| Rural Electrification | TZS 574.8 billion (2024/25) | Expanded market reach |
| AFCON 2027 Stadium Construction | Included in budget | Construction and hospitality opportunities |
| Ports and Airports | Part of TZS 2.75 trillion transport allocation | Improved trade infrastructure |
| Revenue Source | Amount (TZS Trillion) | Percentage |
| Domestic Revenue | 38.9 | 68.9% |
| - TRA Collections | 26.73 | - |
| - Non-tax Revenue | 4.66 | - |
| Grants and Concessional Loans | 5.47 | 9.7% |
| Domestic Borrowing | 5.44 | 9.6% |
| Non-concessional Loans | 2.10 | 3.7% |
| Total Budget | 56.49 | 100% |
| Expenditure Category | Amount (TZS Trillion) | Purpose |
| Subsidies and Transfers | 23.04 | Social services, institutions, local government |
| Salaries and Pensions | 7.71 | Government employees |
| Goods and Services | 7.81 | Government operations |
| Capital Payments | 7.72 | Debt repayment |
| Interest Payments | 6.49 | Debt servicing |
| Development Projects | 16.4 | Infrastructure, strategic projects |
| Indicator | Budget Target | Current Status (Oct 2025) | Assessment |
| Headline Inflation | 3.0-5.0% | 3.5% | ✓ Within target range |
| Food Inflation | Not specified | 7.4% | Rising pressure on households |
| Core Inflation | Not specified | 2.1% | Well controlled |
| Energy & Utilities Inflation | Not specified | 4.0% | Moderate increase |
| Non-food Inflation | Not specified | 1.0% | Very stable |
| Category | Weight (%) | Monthly Change | Impact on Budget |
| Food and non-alcoholic beverages | 28.2 | -0.2% | Slight relief this month |
| Housing, water, electricity | 15.1 | -0.5% | Lower utility costs |
| Transport | 14.1 | -0.7% | Reduced transport expenses |
| Clothing and footwear | 10.8 | +0.1% | Minimal increase |
| Furnishings & household equipment | 7.9 | +0.3% | Moderate increase |
| Revenue Source | Monthly Target (TZS Billion) | Actual Collection | Performance | % Achievement |
| Total Revenue | 3,503.9 | 3,718.2 | Exceeded | 106.1% |
| Tax Revenue | 2,804.6 | 3,124.2 | Exceeded | 111.4% |
| - Taxes on imports | 981.5 | 1,052.0 | Exceeded | 107.2% |
| - Income taxes | 1,185.4 | 1,354.9 | Exceeded | 114.3% |
| - Taxes on local goods | 445.1 | 543.9 | Exceeded | 122.2% |
| - Other taxes | 192.6 | 173.4 | Below target | 90.0% |
| Non-tax Revenue | 548.1 | 446.2 | Below target | 81.4% |
| Expenditure Category | Estimate (TZS Billion) | Actual (TZS Billion) | % Execution |
| Total Expenditure | 4,366.3 | 4,284.2 | 98.1% |
| Recurrent Expenditure | 2,563.3 | 2,508.6 | 97.9% |
| - Wages and salaries | 1,084.7 | 1,079.7 | 99.5% |
| - Interest payments | 530.5 | 437.3 | 82.4% |
| - Other goods/services | 948.1 | 991.6 | 104.6% |
| Development Expenditure | 1,803.0 | 1,775.6 | 98.5% |
| - Locally financed | 1,370.8 | 1,461.7 | 106.6% |
| - Foreign financed | 432.2 | 313.8 | 72.6% |
| Indicator | Oct 2024 | Oct 2025 | Annual Growth | Target Implications |
| Extended Broad Money (M3) | TZS 49,243 bn | TZS 59,807 bn | 21.5% | Strong liquidity |
| Private Sector Credit | TZS 36,518 bn | TZS 42,387 bn | 16.1% | Robust business lending |
| Reserve Money | TZS 11,766 bn | TZS 15,087 bn | 28.2% | Adequate monetary base |
| Foreign Currency Deposits | USD 4,753 m | USD 5,662 m | 19.1% | Confidence in banking |
| Economic Sector | Annual Growth Rate | Share of Total Credit (%) |
| Mining and quarrying | 29.7% | - |
| Agriculture | 25.6% | 12.9% |
| Hotels and restaurants | 23.2% | 8.6% |
| Trade | 21.8% | 13.2% |
| Transport & communication | 18.7% | 4.6% |
| Building & construction | 14.2% | 4.5% |
| Personal loans | 11.3% | 36.4% |
| Manufacturing | 5.2% | 8.5% |
| Rate Type | Oct 2024 | Oct 2025 | Change |
| Central Bank Rate (CBR) | 5.75% | 5.75% | Unchanged |
| Overall Lending Rate | 15.67% | 15.19% | -0.48% |
| Short-term Lending (up to 1 year) | 16.06% | 15.50% | -0.56% |
| 12-month Deposit Rate | 10.41% | 9.21% | -1.20% |
| Overall Deposit Rate | 8.25% | 8.36% | +0.11% |
| Treasury Bill Rate (Overall) | 11.55% | 6.27% | -5.28% |
| Interest Rate Spread | 5.65% | 6.28% | +0.63% |
| Account | 2024 (USD Million) | 2025 (USD Million) | Change |
| Current Account Deficit | -2,893.3 | -2,217.8 | Improved by 23.3% |
| Exports of Goods | 8,461.5 | 10,137.9 | +19.8% |
| - Gold exports | 3,308.9 | 4,596.5 | +38.9% |
| - Traditional exports | 1,148.3 | 1,438.2 | +25.2% |
| Imports of Goods | 14,114.1 | 14,608.0 | +3.5% |
| Services (Tourism) | 6,672.0 | 6,910.8 | +3.6% |
| Foreign Reserves | USD 5,546.9 m | USD 6,171.1 m | +11.2% |
| Import Cover | 4.5 months | 4.7 months | Above target |
| Period | TZS/USD Rate | Annual Change |
| October 2024 | 2,693.1 | -8.9% (depreciation) |
| October 2025 | 2,451.6 | +9.5% (appreciation) |
| Indicator | Sept 2025 | Oct 2025 | Change |
| Total Food Stocks | 570,519 tonnes | 593,485 tonnes | +22,966 tonnes |
| Maize Purchased | - | 24,400 tonnes | Increased stocks |
| Maize Released | - | 1,434 tonnes | Minimal distribution |
| Crop | Price Change |
| Maize | Variable increase |
| Rice | Moderate increase |
| Beans | Significant increase |
| Sorghum | Sharp increase |
| Finger millet | Notable increase |
| Debt Category | Amount | Share of Total | Change from Previous Year |
| Total National Debt | USD 50,932 million | 100% | -0.1% |
| External Debt | USD 35,386 million | 69.5% | -0.7% |
| - Central Government | USD 28,833 million | 81.7% | Increased |
| - Private Sector | USD 5,846 million | 16.5% | Stable |
| Domestic Debt | TZS 38,115 billion | - | +1.8% |
| Category | Amount (USD Million) | Trend |
| External Debt Service | 220.5 | Monthly payment |
| - Principal Repayment | 169.3 | 76.8% of total |
| - Interest Payments | 51.2 | 23.2% of total |
| Priority Sector | Budget Allocation (%) | Credit Growth (%) | Alignment |
| Manufacturing | 18.12% | 5.2% | ❌ Weak alignment |
| Agriculture | 3.36% | 25.6% | ✓ Strong alignment |
| Mining | Not specified | 29.7% | ✓ Very strong |
| Tourism | 0.64% | 23.2% (Hotels) | ✓ Strong alignment |
| Trade | Not specified | 21.8% | ✓ Strong |
| Transport | Major allocation | 18.7% | ✓ Good alignment |
| Indicator | Amount (TZS Billion) | % of Target |
| Total Revenue | 9,677.8 | 105.2% |
| Total Expenditure | 12,191.1 | 95.7% |
| Budget Deficit | -2,513.2 | - |
| Grants | 266.6 | 133.2% |
| Net Deficit | -2,246.7 | - |
| Source | Amount (TZS Billion) | Share (%) |
| Foreign Financing | 1,320.6 | 45.6% |
| Domestic Financing | 1,575.4 | 54.4% |
| Total Financing | 2,896.0 | 100% |
| Area | Target | Current Status | Impact |
| Inflation Control | 3-5% | 3.5% | Positive for households |
| Revenue Collection | Target | 106.1% achievement | Enables service delivery |
| GDP Growth Projection | 6.0% | On track (5.5% in 2024) | Job creation continuing |
| Foreign Reserves | 4.0+ months | 4.7 months | Exchange rate stability |
| Credit Growth | Positive growth | 16.1% | Business expansion supported |
| Current Account | Improvement | Deficit down 23.3% | Stronger economy |
| Challenge | Current Status | Impact on Households/Businesses |
| Food Inflation | 7.4% (up from 2.5%) | Higher food costs for families |
| Manufacturing Credit | Only 5.2% growth | Not matching budget priority of 18.12% |
| Foreign-Financed Projects | 72.6% execution | Some infrastructure delays |
| Interest Rate Spread | 6.28% (widened) | Higher borrowing costs |
| Food Prices | Staples increasing | Household budgets strained |
Tanzania's 2025/26 budget of TZS 56.49 trillion lays a robust foundation for sustained economic progress, targeting 6.0% GDP growth, inflation within 3-5%, and domestic revenue at 16.7% of GDP. For households, this translates into continued macroeconomic stability, with benefits from substantial allocations to education (TZS 444.7 billion), healthcare (TZS 414.7 billion), fertilizer subsidies (TZS 708.6 billion), and rural electrification/energy projects (TZS 2.2 trillion). These measures should ease cost-of-living pressures, particularly for low-income and rural families, by reducing out-of-pocket expenses on essentials and supporting agricultural livelihoods. Tax reliefs—such as reduced motorcycle fees, zero-rated VAT on fertilizers and textiles, and lower online purchase VAT—further bolster disposable incomes. However, persistent food inflation (7.4% as of October 2025) and new levies (e.g., TZS 10 per litre fuel levy) remain challenges, disproportionately affecting middle-income urban households reliant on transport and energy.
For businesses, the budget signals strong government commitment through high development expenditure execution (98.5%), private sector credit growth (16.1%), and sectoral priorities in manufacturing (18.12% allocation), agriculture, energy, and infrastructure. Opportunities abound in export-led growth (19.8%), shilling appreciation (9.5%), and incentives like faster VAT refunds and exemptions for local producers. Yet gaps persist, notably low credit growth to manufacturing (5.2%) despite its prominence, alongside higher tax burdens (e.g., 1% Alternative Minimum Tax, 10% withholding on retained earnings) that could constrain reinvestment, especially for SMEs.
Looking ahead to 2026, successful implementation could deliver tangible gains: accelerated job creation and income growth for households, improved infrastructure reducing operational costs for businesses, and a narrower fiscal deficit supporting overall stability. Early indicators—strong revenue collection (106.1%), export performance, and liquidity—position the economy well to achieve these targets, fostering higher productivity and shared prosperity.
However, this positive outlook is now overshadowed by the political situation arising from the October 2025 elections. President Samia Suluhu Hassan's declared landslide victory (over 97% of the vote) has faced widespread disputes, including the exclusion of main opposition candidates, allegations of irregularities such as ballot stuffing, internet blackouts, and a severe post-election crackdown. This has sparked widespread protests, with reports of hundreds killed, mass arrests, internet restrictions, and international criticism from organizations including the UN, AU, and SADC. Persistent tensions, heightened security, bans on protests, and opposition demands for a transitional government create considerable uncertainty as of December 2025. This political instability threatens to deter foreign investment, disrupt tourism and trade, undermine business confidence, and divert public resources—potentially jeopardizing inflation management, credit availability, and infrastructure advancements vital for households and businesses in 2026.
In summary, although the budget offers a progressive structure for inclusive growth, achieving its benefits in 2026 hinges on quickly resolving the ongoing political crisis to rebuild stability and confidence. Absent such resolution, short-term economic interruptions may eclipse the intended long-term advantages for Tanzanian households and businesses.