Tanzania has received significant Official Development Assistance (ODA) over the years, with disbursements peaking at $761M in 2013 before gradually declining to $389M in 2024 and a projected $118M in 2025. ODA accounted for 8.55% of GNI, with major donors including the World Bank ($1.095B) and the United States ($429.5M). As Tanzania's GNI reached $79B (2024) and tax revenue stood at 11% of GDP, the decline in aid signals a transition towards economic self-reliance.

An overview of official development assistance (ODA) disbursements to Tanzania in U.S. dollars, showing the financial support received from international donors over the years:

1. Disbursements Overview

• Definition: Disbursements represent the actual funds paid by federal agencies in a fiscal year to fulfill government obligations.
• Trends: The total ODA received by Tanzania has fluctuated over the years, peaking in 2013 at $761M, followed by a decline and recovery in later years.

2. Key ODA Donors to Tanzania

These organizations and countries provided the highest amounts in recent years:

• World Bank Group: $1.095B (largest donor)
• United States: $429.5M
• Global Fund: $225.0M
• France: $132.4M
• Canada: $101.8M

3. Economic and Social Indicators

• Population: 70.5 million (with 38.9% urban and 61.1% rural)
• Gross National Income (GNI): $79 billion
• GNI per capita: $1,200
• ODA as % of GNI: 8.55% (Tanzania's economy is significantly supported by foreign aid)
• ODA per capita: $41.13 (per person aid distribution)
• Government Tax Revenue: 11% of GDP (shows the domestic revenue generation capacity)

4. Trends in ODA Disbursements to Tanzania (2001-2025)

• 2001-2005: Disbursements ranged between $44M - $98M, showing slow but steady growth.
• 2006-2013: Rapid increase from $121M in 2006 to a peak of $761M in 2013.
• 2014-2019: Decline and fluctuation, reaching $647M in 2019.
• 2020-2024: Decline in disbursements, dropping to $389M in 2024.
• 2025 (Projected): A sharp decline to $118M, indicating a possible reduction in ODA support.

5. Insights

• The significant peak in 2013 suggests major funding projects or increased donor confidence.
• The decline post-2014 suggests changes in donor priorities, Tanzania’s economic status, or governance reforms.
• The projected drop in 2025 could indicate Tanzania’s transition away from dependency on foreign aid.

Key figures and trends for Tanzania’s ODA disbursements, economic indicators, and donor contributions:

Table: Tanzania’s ODA Trends and Economic Indicators (2001-2025)

ODA disbursements to Tanzania reveals several key insights about the country's economic reliance on aid, fiscal trends, and potential shifts in donor priorities:

1. Tanzania's Economic Dependency on ODA

• ODA as a Percentage of GNI (8.55%): This indicates that a significant portion of Tanzania’s economy still depends on foreign aid. A high ODA-to-GNI ratio suggests limited domestic revenue generation capacity.
• ODA Per Capita ($41.13): Each Tanzanian receives an average of $41.13 in aid, reflecting Tanzania’s classification as a low-income country.

2. Trends in Foreign Aid

• 2001-2005: Low Disbursement ($44M - $98M)
  • Aid was relatively low, likely due to limited donor commitments or governance concerns.
• 2006-2013: Rapid Increase in Aid ($121M - $761M)
  • This period saw a significant increase in aid, peaking in 2013 ($761M), possibly due to large-scale development projects or donor confidence.
• 2014-2019: Decline and Fluctuation ($599M - $647M)
  • Aid dropped post-2013, which could indicate a shift in donor priorities towards other regions or sectors.
• 2020-2024: Continuous Decline ($588M - $389M)
  • This drop might reflect Tanzania’s economic growth, reducing eligibility for certain types of aid.
• 2025 (Projected): Sharp Decline ($118M)
  • If this projection holds, it suggests that donors are reducing their financial commitments significantly.

3. Shift in Tanzania’s Financial Landscape

• Government Tax Revenue (11% of GDP)
  • Relatively low compared to international benchmarks (15-20%), showing limited domestic revenue collection.
• GNI ($79B) & GNI Per Capita ($1.2K)
  • As GNI improves, Tanzania may move towards middle-income status, leading to reduced ODA eligibility.

4. Implications for Tanzania

• Reduced Future Aid: Tanzania may need to increase domestic revenue generation through better tax policies and private sector growth.
• Economic Independence: Declining aid could push Tanzania towards self-reliance, but it requires stronger public finance management.
• Donor Shifts: The decline could mean donors are redirecting funds to other priority countries or investing in different economic sectors.
• Public-Private Partnerships (PPP): To fill the funding gap, Tanzania must attract private sector investments for infrastructure and development.

Final Thought

Tanzania is transitioning away from heavy aid dependence, which is a sign of economic progress. However, the country must strengthen its domestic revenue base, improve fiscal policies, and attract private investment to sustain growth without relying on ODA.

Table: Tanzania’s ODA Disbursements (2001-2025)