The government has stated that there are no direct budgetary consequences resulting from the executive orders issued by former U.S. President Donald Trump to suspend aid to Tanzania.
This was revealed in Parliament in Dodoma by the Minister for Finance, Dr. Mwigulu Lameck Nchemba (MP), when responding to a supplementary question from the Member of Parliament for Moshi Rural, Prof. Patrick Alois Ndakidemi.
The MP had inquired about the extent to which President Trump's orders to halt aid to Tanzania had affected ongoing development projects in the country.
Dr. Nchemba explained that the Government of Tanzania did not have direct government-to-government financial cooperation with the U.S. for development projects. Instead, the U.S. was operating through its institutions, which partnered with Tanzanian institutions.
“With regard to the institutions that were receiving funds from U.S. institutions, the Government has already conducted an assessment not just based on the U.S. statement, but considering the overall flow of development partner funds and has already begun taking action,” said Dr. Nchemba.
He noted that in the past, aid funds were sometimes included in the budget for development projects. However, the Government is now implementing development projects using domestic funds to cover the gap left by the withdrawal of donor-supported budget contributions.
Dr. Nchemba added that in response to recent developments related to changes in donor foreign policies, the Government has revised its budget allocations and managed to secure more than TZS 220 billion, which was particularly needed in affected areas such as the health sector. Over TZS 88 billion has been directed to the health sector to ensure project continuity.
He emphasized that, following the Government's assessment, development projects previously funded by development partners will continue to be implemented to ensure Tanzanian development and livelihoods are not harmed by policy shifts from any single development partner.
In response to a primary question on how the Government is prepared to cope with changes in policies from some wealthy countries that support Tanzania’s economic growth, Dr. Nchemba stated that the Government continues to make various efforts to increase domestic revenue to ensure that a large portion of the national budget is funded internally.
He further noted that recognizing the importance of budgetary needs, including funding for development projects, the Government will continue to promote private sector participation in financing development projects through alternative approaches such as public-private partnerships (PPPs).
Dr. Nchemba concluded by stating that this approach will help reduce the Government’s borrowing burden for development projects and lessen dependence on budget support from development partners.