Tanzania’s Tsh62.33 trillion ($24 billion) budget for 2026/27 is anchored on raising at least 75 percent of its funding from domestic sources, as the government seeks to offset an expected decline in external support amid lingering concerns over the country’s civil rights record.

 

Finance Minister Khamis Mussa Omar identified strategic government projects as key spending priorities for the new fiscal year, including the cross-country standard gauge railway, road infrastructure expansion, improved water services and clean energy projects.

The government plans to raise Tsh46.8 trillion ($18 billion) from domestic sources as an alternative to funding from Western partners that have threatened to cut support over accountability concerns linked to last year’s disputed general election.

About 30 percent of the budget, or Tsh20.82 trillion ($7.9 billion), has been allocated to development programmes, while the remainder will finance recurrent expenditure.

Revenue driveThe government says it will focus on expanding the taxpayer base and strengthening revenue collection systems through digital solutions aimed at improving efficiency, compliance and administrative processes.

Among the measures announced by Mr Mussa are the formalisation of informal businesses and optimisation of tax incentives for private investors.

Beyond taxation, Tanzania’s revised domestic revenue strategy places renewed emphasis on mining and tourism, traditionally among the country’s key foreign-exchange earners. The government also aims to increase productivity in agriculture, manufacturing and renewable energy.

As part of efforts to reduce expenditure, Mr Mussa directed government agencies and state-owned enterprises to replace diesel- and petrol-powered vehicles with electric cars, citing the prolonged fuel crisis linked to conflict in the Middle East.

Growth blueprintMr Mussa was presenting his first budget since his appointment to the Treasury in November. He described it as a catalyst for implementing Tanzania’s new development blueprint, Dira 2050, launched in June last year with the goal of building a $1 trillion economy by 2050.

In a State of the Economy report tabled in Parliament on Thursday, Planning and Investment Minister Prof Kitila Mkumbo said Western pressure linked to the disputed election had necessitated an international diplomacy approach based on “pragmatism based on the reality of things at any given time.”He also addressed growing scepticism about Tanzania’s commitment to non-alignment in global political and economic relations following President Samia Suluhu Hassan’s recent visit to Russia.

To quote (former China president) Deng Xiaoping, it doesn’t matter whether the cat is white or black so long as it catches mice,” said Prof Mkumbo, whose ministry falls under the President’s Office.

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