THE budget ceiling for the 2025/2026 financial year has increased to 57.040trn/-, with the government planning to allocate 19.471trn/-, or 34.1 percent of total estimates, for development expenditure.

Finance Minister Dr Mwigulu Nchemba told the Budget committee of the National Assembly here yesterday that this represents a significant increase from the 15.959trn/- or 31.7 percent of the 50.291trn/- allocated for fiscal 2024/2025.

Out of the development budget funds 13.320trn/- will be mobilised from domestic sources, while 6.150trn/- will be sourced externally, while  the government intends to enhance private sector participation in financing development projects via public-private partnerships (PPP), he stated.

He cited major areas of government expenditure as servicing the government debt, public service salaries, strengthening peace, stability and security, as well as preparations for the 2027 continental soccer tournament.

The budget will include preparations for implementation of the National Development Vision 2050, taking into account the potential impacts of policy changes by development partners.

The budget is expected to be financed through revenues amounting to 40.9trn/- and loans from domestic and external sources totalling 16.07 trn/-, where revenues include taxes projected at 31.8trn/-, non-tax revenues of 6.2trn/-, local government revenues of 1.6trn/- along with bilateral and multilateral grants of 1.24trn/-.

“Domestic revenues are expected to cover 69.7 percent of the entire 2025/26 budget as part of the government’s strategy to reduce dependence on unpredictable or high-cost and conditional sources,” the minister stated.

Expected loans include 6.2trn/- from domestic sources and 9.79 trn/- from external sources, with Planning and Investment state minister Dr Kitila Mkumbo noting that priorities in the 2025/2026 budget plan are aligned with expected outcomes of the third five- year development plan.

To ensure effective implementation of the plan, the government is working with the private sector for high-impact flagship projects stimulating the economy and enhancing the country's competitiveness at regional and international levels.

Maintaining macroeconomic stability, improving the investment and business environment along with developing the transport infrastructure are key areas of the plan, he said, pointing at strengthening industrial production and service delivery.

Promoting investment and trade is a pillar of policy action, whereby projects in this category focus on improving institutional frameworks, tax policies and regulations to create a conducive investment environment.

The 2025/26 estimates  are geared to accelerating development programmes focused at improving management, administration systems and infrastructure in education, health, water and environmental sectors.

Accelerating land planning, surveying, occupancy titles and registration in urban, rural and strategic areas, as well as enhancing youth skills and providing hands-on training opportunities for higher education graduates.

The budget will also support developing human capital of which programs and strategies aimed at advancing knowledge and skills development from early childhood education to higher education to promote self-employment among the youth.

Additionally, it includes efforts to improve the quality of technical and vocational education and specialized skills training, crucial for increasing productivity and competitiveness in utilizing national resources for development.

Progress in the implementation of the 2024/25 plan shows that as of January 2025, a total of 9,711 development programmes and projects were at various stages of implementation as part of the third five-year plan.

The government is implementing 17 flagship projects aimed at accelerating economic growth and social well-being, he added.