Tanzania’s Budget Proposals: Praises and Concerns Over Increased Borrowing
The Tanzanian budget proposal for the 2025/26 fiscal year amounts to Sh57.04 trillion, raising concerns among stakeholders about the reliance on loans for major expenses such as the General Election and AFCON. While the government pledges to avoid new projects and focus on ongoing ones, experts warn that financial prudence and domestic revenue maximization are essential.
The Tanzanian government’s budget proposal for the 2025/26 financial year, amounting to Sh57.04 trillion, has drawn both praise and concern from stakeholders. While the budget highlights significant upcoming expenses including preparations for the General Election, debt repayments, and the Africa Cup of Nations (AFCON), many experts warn that this heavy borrowing could hinder the funding of essential development projects.
In light of the rising concerns regarding increasing debt reliance, the government has committed to refraining from initiating new projects in the upcoming fiscal year. Instead, the focus will be on completing ongoing projects to maintain financial discipline. Finance Minister Dr. Mwigulu Nchemba presented six key priorities during the budget briefing: settling government debts, paying salaries, preparation for elections and AFCON, strengthening democracy, and maintaining peace and stability.
The budget framework indicates that Sh40.09 trillion, accounting for 69.7 percent, will be sourced domestically, while Sh16.7 trillion, or 30.3 percent, will be secured through external funding. Analyst Zacharia Jackson expressed concerns that this reliance on loans could result in increased debt accumulation, stressing that the substantial funding required for elections and AFCON could detract from development funding if not managed properly.
Financial analyst Sablina Kaijage echoed this sentiment, highlighting that the allocation of funds for elections often leads to unforeseen expenses, which can exhaust budgets and impact ongoing projects. She advocated for maximizing domestic revenue rather than depending too heavily on external financial sources, which may diminish during election periods.
Additionally, vendor Aidan Chedego emphasized the vital role of timely salary payments for civil servants in supporting economic stability, stating, “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.”
Moving forward, stakeholders emphasize that prudent financial management and resource allocation will be essential to address the country’s fiscal challenges effectively, ensuring sustainable economic growth amid rising expenditures.
In summary, while the Tanzanian government’s proposed budget for the 2025/26 fiscal year reflects significant priorities, stakeholders express valid concerns about the rising debt levels associated with key expenditures like elections and AFCON preparations. The Government’s commitment to not initiate new projects and focus on existing ones is a step towards financial discipline. However, it is crucial for the authorities to adopt prudent fiscal strategies and enhance domestic revenue generation to safeguard the economy against potential fiscal challenges ahead.
Original Source: www.thecitizen.co.tz
