Tanzania Investment and Consultant Group Ltd

| Economic Research Centre

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:

Impact on Low-Income Citizens:

Challenges:

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:

Macroeconomic Targets (Budget Speech):

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:

2025/2026 Budget Priorities:

Projected Impact:

b. Industry (Manufacturing, Mining, Construction)

2024/2025 Performance:

2025/2026 Budget Priorities:

Projected Impact:

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

2024/2025 Performance:

2025/2026 Budget Priorities:

Projected Impact:

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):

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

Projected Performance of 2025/2026 Budget

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

Comparative Budget Performance:

Challenges:

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

Indicator2024/2025 Performance2025/2026 ProjectionImpact on Low-Income Citizens
Total BudgetTZS 49.35 trillion (USD 18.85 billion)TZS 56.49 trillion (USD 22.07 billion)Larger budget funds more social services, jobs.
Real GDP Growth5.5% (target: 5.4%)6.0% (targeted)Higher growth creates employment opportunities.
Domestic RevenueTZS 29.83 trillion (15.0% of GDP)TZS 38.9 trillion (16.7% of GDP)Increased revenue supports subsidies, education.
Revenue CollectionTZS 45.07 trillion (89.6% of TZS 50.29 trillion)>TZS 50.29 trillion (targeted)Funds development projects benefiting communities.
Development ExpenditureTZS 15.75 trillion (95.1% of TZS 16.54 trillion)TZS 16.4 trillion (29.0% of budget)Infrastructure (SGR, JNHPP) creates jobs.
Inflation3.1% (target: 3.0–5.0%)3.0–5.0% (targeted)Stable prices protect purchasing power.
Exports (% of GDP)20.3%>20.3% (6.0% growth)Forex earnings stabilize commodity prices.
Trade DeficitUSD 5,157.2 million<USD 5,157.2 million (projected)Reduced import costs benefit consumers.
Public Debt (% of GDP)40.3% (TZS 107.70 trillion)~46.5% (sustainable)Fiscal stability supports social spending.
Fertilizer SubsidiesTZS 708.6 billion (2021/22–2023/24)Continued (inferred)Lowers farming costs for low-income farmers.
Education SpendingTZS 444.7 billion (fee-free), TZS 636.0 billion (loans)Sustained or increasedImproves access, reduces poverty.
Healthcare SpendingTZS 414.7 billion (medicines), TZS 47.2 billion (hospitals)Sustained or increasedEnhances health affordability.
Energy AllocationTZS 574.8 billion (rural electrification, JNHPP)TZS 2.2 trillion (energy projects)Cheaper energy supports small businesses.

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)

2. Local Government Authorities (LGAs)

3. Tanzania Revenue Authority (TRA)

4. Public-Private Partnership Centre (PPPC)

Collective Potential

Table: Performance and Viability for Vision 2050

InstitutionCurrent Metric (2024)2050 TargetGDP Growth ImpactDevelopment RoleViability Score (1-10)
TIC$6.2B FDI$50B FDI3% → 4%Jobs, industrialization8
LGAs$0.46B revenue$2.6B revenue1% → 1.5%Services, rural growth5
TRA$9.26B revenue$37B revenue2% → 4%Budget, infrastructure9
PPPC$3B PPPs$20B PPPs1% → 3%Infrastructure, urbanization7

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

InstitutionMetricCurrent Value (2024/2025)Vision 2050 Target (2050)Contribution to 8-10% GDP GrowthImpact on Development (2050)
TICForeign Direct Investment (FDI)$6.2B (2023)$50B~3% (current) → ~4%10M jobs, poverty from 25% to 15%
Job Creation150,000 jobs10M jobsSupports industrial GDP (25% → 40%)Supports 50M people (5 per job)
Export Growth12% annually (2020-2024)20% annuallyBoosts manufacturing exportsEnhances rural/urban livelihoods
LGAsOwn-Source Revenue$0.46B (5% national revenue)$2.6B (10% share)~1% (current) → ~1.5%Funds SMEs, rural growth
Service Coverage8,000 schools, 2,500 health facilities15,000 schools, 5,000 facilitiesSupports human capitalServices for 114M, 60% urban
Staffing Levels40% positions filled (some regions)80% positions filledEnhances local productivityReduces inequality
TRATax-to-GDP Ratio12.5% ($9.26B revenue)20% ($37B revenue)~2% (current) → ~4%Funds $100B budget
Informal Sector Formalization50,000 SMEs formalized1M SMEs formalizedExpands tax base5M SME jobs, urban poverty cut
Digital Compliance80% of businesses95% of businessesScales revenue collectionSupports infrastructure
PPPCPPP Investment$3B (2020-2024)$20B~1% (current) → ~3%Urban housing, rural infrastructure
Completed PPP Projects10 projects50 projects/yearBoosts trade, urbanizationLifts 5M poor, 60% urban
Local Private Sector Share15% of projects40% of projectsEnhances local capacityDrives inclusive growth

Notes:

Explanation of Key Figures

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