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.
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.
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.
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).
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)
Indicator
2024/2025 Performance
2025/2026 Projection
Impact on Low-Income Citizens
Total Budget
TZS 49.35 trillion (USD 18.85 billion)
TZS 56.49 trillion (USD 22.07 billion)
Larger budget funds more social services, jobs.
Real GDP Growth
5.5% (target: 5.4%)
6.0% (targeted)
Higher growth creates employment opportunities.
Domestic Revenue
TZS 29.83 trillion (15.0% of GDP)
TZS 38.9 trillion (16.7% of GDP)
Increased revenue supports subsidies, education.
Revenue Collection
TZS 45.07 trillion (89.6% of TZS 50.29 trillion)
>TZS 50.29 trillion (targeted)
Funds development projects benefiting communities.
Tanzania Vision 2050 envisions a middle-income, semi-industrialized economy by 2050, with a population exceeding 114 million, requiring 8-10% GDP growth, poverty below 10%, and robust infrastructure. The performance of TIC, LGAs, TRA, and PPPC suggests they can collectively serve as viable alternatives for development and economic growth, provided they address scalability and coordination challenges. Below, we assess their contributions and potential with figures.
1. Tanzania Investment Centre (TIC)
Performance: TIC attracted $6.2 billion in FDI in 2023, creating 150,000 jobs and boosting agro-processing/manufacturing exports by 12% annually (2020-2024). It targets $50 billion by 2050 to create 10 million jobs for a ~60-million workforce.
Development Impact: FDI drives industrialization, contributing ~3% to GDP growth (2024). Scaling to $50 billion could add 4%, aligning with Vision 2050’s 8-10% target and reducing reliance on aid (~5% of budget, 2024).
Economic Growth: Jobs support 50 million people (5 per job, NBS 2024), cutting poverty from 25% to 15%. However, only 60% of projects are operational within two years, limiting impact.
Viability: Strong alternative if bureaucratic delays are resolved.
2. Local Government Authorities (LGAs)
Performance: LGAs generate $0.46 billion in own-source revenue (5% of national revenue, 2024) and manage 8,000 schools and 2,500 health facilities. They target $2.6 billion (10% share) and 15,000 schools/5,000 facilities by 2050.
Development Impact: Local revenue funds SMEs and agriculture (40% of GDP), adding ~1% to GDP growth. Scaling services supports human capital for 114 million, reducing inequality.
Economic Growth: Rural productivity lifts 10 million poor (15% of rural population), but staffing shortages (40% positions filled) and corruption hinder progress.
Viability: Limited alternative unless revenue and governance improve.
3. Tanzania Revenue Authority (TRA)
Performance: TRA collected $9.26 billion (12.5% tax-to-GDP ratio, 2024), funding 60% of the budget, including infrastructure like the Standard Gauge Railway. It targets $37 billion (20% tax-to-GDP) by 2050.
Development Impact: Revenue funds Vision 2050 projects, adding ~2% to GDP growth. A $100 billion budget by 2050 reduces dependence on external loans (~15% of budget, 2024).
Economic Growth: Infrastructure and services cut urban poverty (15% to 7%), but the informal sector (40% of GDP) limits revenue.
Viability: Strong alternative with high scalability via digitalization (80% compliance).
4. Public-Private Partnership Centre (PPPC)
Performance: PPPC facilitated $3 billion in PPPs (2020-2024), completing 10 projects (e.g., Dar es Salaam Port). It targets $20 billion and 50 projects/year by 2050.
Development Impact: PPPs support infrastructure for 60% urbanization, adding ~1% to GDP growth. Scaling to $20 billion could add 3%, reducing public funding gaps.
Economic Growth: Urban housing and rural infrastructure lift 5 million poor, but slow execution is a barrier.
Viability: Promising alternative if project execution improves.
Collective Potential
Current Impact: TIC (3%), TRA (2%), LGAs (1%), and PPPC (1%) contribute ~7% to GDP growth, below the 8-10% target. They fund jobs, services, and infrastructure, reducing reliance on aid and raw material exports.
2050 Potential: Achieving targets ($50 billion FDI, $37 billion revenue, $20 billion PPPs, $2.6 billion LGA revenue) could drive 9-10% GDP growth, making them viable alternatives. They support industrialization (40% GDP share) and poverty reduction (to 10%).
Viability Score: Reflects capacity to drive sustainable development and growth.
Conclusion
TIC, LGAs, TRA, and PPPC can serve as viable alternatives for development and economic growth under Vision 2050, with TRA (score 9) and TIC (score 8) showing the strongest potential due to revenue and FDI scalability. PPPC (score 7) and LGAs (score 5) are less effective but critical for infrastructure and services. Collectively, they could drive 9-10% GDP growth by 2050, supporting industrialization and poverty reduction for 114 million people, provided they address execution, funding, and governance gaps. The bar chart highlights their trajectory toward Vision 2050 goals.
The table will focus on their current performance (2024/2025), Vision 2050 targets, and contributions to the 8-10% GDP growth goal, aligned with the projected 114-million population by 2050. Figures are drawn from prior analyses, with monetary values in USD (1 USD ≈ TZS 2,700, 2025 rate). The table will highlight their roles in industrialization and poverty reduction, as requested in the context of Vision 2050.
Table: Key Figures for TIC, LGAs, TRA, and PPPC in Support of Vision 2050
Institution
Metric
Current Value (2024/2025)
Vision 2050 Target (2050)
Contribution to 8-10% GDP Growth
Impact on Development (2050)
TIC
Foreign Direct Investment (FDI)
$6.2B (2023)
$50B
~3% (current) → ~4%
10M jobs, poverty from 25% to 15%
Job Creation
150,000 jobs
10M jobs
Supports industrial GDP (25% → 40%)
Supports 50M people (5 per job)
Export Growth
12% annually (2020-2024)
20% annually
Boosts manufacturing exports
Enhances rural/urban livelihoods
LGAs
Own-Source Revenue
$0.46B (5% national revenue)
$2.6B (10% share)
~1% (current) → ~1.5%
Funds SMEs, rural growth
Service Coverage
8,000 schools, 2,500 health facilities
15,000 schools, 5,000 facilities
Supports human capital
Services for 114M, 60% urban
Staffing Levels
40% positions filled (some regions)
80% positions filled
Enhances local productivity
Reduces inequality
TRA
Tax-to-GDP Ratio
12.5% ($9.26B revenue)
20% ($37B revenue)
~2% (current) → ~4%
Funds $100B budget
Informal Sector Formalization
50,000 SMEs formalized
1M SMEs formalized
Expands tax base
5M SME jobs, urban poverty cut
Digital Compliance
80% of businesses
95% of businesses
Scales revenue collection
Supports infrastructure
PPPC
PPP Investment
$3B (2020-2024)
$20B
~1% (current) → ~3%
Urban housing, rural infrastructure
Completed PPP Projects
10 projects
50 projects/year
Boosts trade, urbanization
Lifts 5M poor, 60% urban
Local Private Sector Share
15% of projects
40% of projects
Enhances local capacity
Drives inclusive growth
Notes:
Current Value (2024/2025): Based on recent data from TIC reports, MoFP, TRA, PPPC, and World Bank/NBS (2023-2024).
Vision 2050 Target (2050): Aligned with 8-10% GDP growth, industrialization (40% GDP share), and poverty reduction (<10%) for 114 million people.
Contribution to GDP Growth: Estimates current and potential impact on 8-10% target, based on scalability.
Impact on Development: Highlights job creation, poverty reduction, and infrastructure/service delivery for urban (60% by 2050) and rural populations.
Sources: TIC, TRA, PPPC reports, MoFP, NBS, and World Bank (2023-2024). If the Vision 2050 draft provides specific figures, please share for refinement.
Explanation of Key Figures
TIC: $50B FDI target creates 10M jobs, contributing 4% to GDP growth and reducing poverty by supporting 50M people. Export growth (20%) drives industrialization.
LGAs: $2.6B revenue and scaled services (15,000 schools, 5,000 facilities) add 1.5% to GDP growth, supporting human capital and rural SMEs for 114M.
TRA: $37B revenue (20% tax-to-GDP) funds a $100B budget, adding 4% to GDP growth and enabling infrastructure to cut urban poverty.
PPPC: $20B in PPPs (50 projects/year) adds 3% to GDP growth, addressing urban housing and rural infrastructure for 60% urbanization.