Tanzania’s Sh57.04 trillion budget framework for 2025/26 has drawn praise but raised concerns about an increasing reliance on loans for financing major expenses. Analysts emphasize the risk of further debt accumulation and stress the importance of financial oversight, timely salaries, and self-sustainability in funding essential programs. The government’s strategy to focus on existing initiatives rather than launching new projects aims to ensure financial discipline and effective resource allocation.
Tanzania’s government has unveiled a budget framework of Sh57.04 trillion for the 2025/26 fiscal year, which has garnered mixed reactions from stakeholders. Economists and the public are increasingly concerned about the nation’s dependency on loans for financing significant expenditures such as the General Election, debt repayments, and preparations for the Africa Cup of Nations (AFCON). These commitments could potentially hinder funding for essential development projects.
To address these concerns, the government has announced its decision to refrain from initiating new projects in the forthcoming fiscal year. Instead, the focus will shift towards completing existing initiatives, thus promoting financial discipline. In his budget presentation on March 11, Finance Minister Dr. Mwigulu Nchemba emphasized six primary priorities: settling government debts, paying salaries, election preparations, enhancing democracy, and maintaining peace and stability.
Dr. Nchemba indicated that the budget would be comprised of Sh40.09 trillion (69.7 percent) sourced domestically, while Sh16.7 trillion (30.3 percent) would be obtained from external funding. Expert Zacharia Jackson from Mwanza acknowledged that although the budget is not fundamentally flawed, there is a rising concern regarding the potential increase in government borrowing. He stated, “The set priorities are critical and demand substantial funding, which may lead to more debt accumulation.” Jackson highlighted the necessity for stringent financial oversight to ensure the proper allocation of funds.
Sablina Kaijage, a financial analyst, shared similar apprehensions, asserting that a significant portion of the budget is allocated for elections, which could further postpone ongoing projects. She advised, “We must focus on maximizing domestic revenue rather than over-relying on external financing,” noting that external aid frequently declines during election periods, thus emphasizing the importance of self-sufficiency.
Moreover, Aidan Chedego, a vendor at Saba Saba Market, underscored the critical nature of timely salary disbursements for civil servants. He remarked, “Peace and stability are important, but for us traders, business is the top priority. If salaries are paid regularly, people will continue shopping, which keeps the economy moving.”
As discussions continue, analysts stress the significance of financial prudence and effective resource allocation to navigate the fiscal challenges that lie ahead.
In conclusion, while Tanzania’s budget framework has been positively received for its outlined priorities, stakeholders remain concerned about the nation’s growing reliance on borrowing. The government’s commitment to completing ongoing projects rather than initiating new ones indicates a strategic focus on financial discipline. However, the need for sound financial management and revenue generation is critical to ensure sustainable development and economic stability moving forward.
Original Source: www.thecitizen.co.tz
