By The Respondents Reporter
Tanzania’s economy grew by 5.9 percent in 2025, supported by strong private sector lending, infrastructure investments and gains in key productive sectors, Finance Minister Amb. Khamis Mussa Omar told Parliament on Thursday while presenting the 2025/26 budget implementation review and outlining priorities for 2026/27.
Presenting his first budget before the 13th Parliament following the 2025 General Election, the minister said the economy had remained stable and resilient, with inflation contained at 3.4 percent and foreign exchange reserves rising to $5.72 billion, enough to cover 4.4 months of imports.
He said the performance reflected continued macroeconomic stability despite global and regional pressures, including food demand from neighbouring countries.
The finance minister noted that growth was mainly driven by increased credit to the private sector, expansion of infrastructure projects and improved performance in mining and services sectors.
Financial and insurance services led sectoral growth at 15.7 percent, followed by electricity and gas at 11.8 percent, mining and quarrying at 9.4 percent, and information and communication services at 8.8 percent.
On budget performance, Amb. Omar said the revised allocation for the Ministry of Finance and its institutions stood at TZS 19.94 trillion in 2025/26.
By April 2026, the ministry had received TZS 14.08 trillion, representing 70.6 percent performance, while expenditure execution remained highly efficient.
The National Audit Office recorded a 97.1 percent budget execution rate after receiving TZS 118.92 billion out of TZS 122.52 billion.
On revenue mobilisation, the government collected TZS 29.35 trillion in domestic revenue between July 2025 and April 2026, representing 85.9 percent of the annual target.
The Tanzania Revenue Authority accounted for the bulk of collections, contributing TZS 29.32 trillion, while non-tax revenue and development grants also supported fiscal operations.
Tax performance exceeded expectations, reaching 105.1 percent of target, driven by improved compliance, digital systems and expanded economic formalisation.
During the same period, the government allocated TZS 9.74 trillion for debt servicing, meeting 68.5 percent of the annual requirement. Of this, TZS 4.45 trillion was used for external debt and TZS 5.29 trillion for domestic obligations.
The minister said Tanzania’s strong debt management framework had received international recognition, including the Commonwealth Public Debt Management Award and recognition as Africa’s best government debt management office.
He further highlighted major reforms in public financial management, including digital systems aimed at improving transparency, efficiency and accountability.
The Universal Billing System has reached its second phase at 70 percent completion, designed to streamline government revenue collection and reduce costs for users.
The Government Accounting System (MUSE) has also been integrated with the National e-Procurement System (NeST), allowing real-time tracking of payments and enabling direct mobile money transactions, particularly benefiting rural communities receiving compensation and social payments.
In addition, the Tanzania Pension Payment System has been linked with eight commercial banks and the Public Service Social Security Fund audit system, strengthening oversight and service delivery.
Government asset management has also expanded significantly, with more than 4.15 million assets valued at TZS 39.2 trillion now registered under the Government Asset Management Information System across 644 institutions.
On investment and infrastructure development, the minister said Public-Private Partnership frameworks had advanced, with feasibility and advisory work completed for major projects including phases of the Dar es Salaam Bus Rapid Transit system, the Kibaha–Morogoro express toll road and airport commercial developments.
The government also launched the National Supply Chain Management Policy 2025, aimed at strengthening procurement systems and increasing participation of local enterprises, especially small and medium businesses.
Looking ahead, Amb. Omar said the 2026/27 budget will align with the ruling party manifesto, the Fourth Five-Year Development Plan (2026/27–2030/31) and Vision 2050.
He said priority areas will include infrastructure development, energy, fiscal sustainability, debt management, social protection and private sector growth to accelerate job creation and inclusive economic development.
