The Ministry of Finance has sought Parliament's approval for a Sh21.3 trillion budget for the 2026/27 financial year, with the government targeting stronger economic growth, enhanced domestic revenue mobilisation and improved public financial management.
Presenting the ministry's expenditure estimates in Parliament on Tuesday, Finance Minister Ambassador Khamis Mussa Omar said the proposed budget would finance both recurrent and development expenditure across the ministry and its eight institutions.
Of the total amount, Sh19.4 trillion has been earmarked for recurrent expenditure, while Sh1.8 trillion will fund development projects.
The minister said the government expects the economy to grow by 6.3 percent in 2026, up from an estimated 5.9 percent in 2025, while inflation is projected to remain within the target range of three to five percent.
“Our priority is to continue managing the economy prudently while strengthening fiscal discipline and enhancing efficiency in domestic revenue collection,” Mr Omar told lawmakers.
In a move aimed at addressing long-standing payment arrears, the government has also set aside Sh100 billion every month to settle outstanding claims owed to public servants, contractors, suppliers and service providers.
The minister said the allocation is expected to reduce the burden of unpaid government obligations and improve liquidity among businesses that depend on public sector contracts.
On the revenue side, the government projects total collections of Sh55.2 trillion in the coming financial year, with the Tanzania Revenue Authority (TRA) expected to contribute more than Sh39 trillion.
Mr Omar also requested Parliament to approve Sh132.2 billion for the National Audit Office to strengthen oversight of public expenditure and support the construction of office facilities in several regions.
He said the budget has been prepared in line with the National Development Vision 2050, the Fourth National Five-Year Development Plan and the ruling CCM's 2025 election manifesto.
The minister used the occasion to present a review of the ministry's performance during the 2025/26 financial year, noting that Parliament had approved Sh20.18 trillion for the ministry and its institutions.
However, following a mid-year budget review, the allocation was revised downward to Sh19.94 trillion, comprising Sh19.45 trillion for recurrent expenditure and Sh485.99 billion for development projects.
As of April 2026, the ministry had received Sh14.08 trillion, equivalent to 70.6 percent of the revised budget, and spent Sh14.05 trillion, representing 99.8 percent of the funds disbursed.
The minister said the government collected and mobilised Sh41.37 trillion from domestic and external sources between July 2025 and April 2026, achieving 82.4 percent of the annual target.
During the same period, the government spent Sh9.74 trillion on debt servicing, including Sh4.45 trillion for external debt and Sh5.29 trillion for domestic debt obligations.
Mr Omar said Tanzania's commitment to meeting its debt obligations on time has strengthened investor confidence and enhanced the country's reputation in regional and international financial markets.
“I am pleased to inform this august House that Tanzania emerged as the overall winner of the Commonwealth Public Debt Management Award and also received the award for Best Government Debt Management Office in Africa,” he said.
The minister noted that Tanzania's economy expanded by 5.9 percent in 2025, compared with 5.5 percent recorded in 2024, driven by growth in private sector lending, infrastructure development, agriculture, mining, construction and strategic investment projects.
Meanwhile, inflation remained stable at an average of 3.4 percent, while foreign exchange reserves reached $5.72 billion, sufficient to cover more than 4.4 months of imports of goods and services.
The figures, according to the minister, demonstrate the resilience of the economy despite ongoing global economic uncertainties and position the country for stronger growth in the coming year.
