Tanzania Budget Highlights 2023/24

Budget at a Glance 

The Minister for Finance and Planning, Hon. Dr. Mwigulu Nchemba, presented the 2023/2024 budget estimates, marking the third year in the implementation of the Third Five-Year National Development Plan (2021/22-2025/26). The theme for this year’s budget is “Accelerating Economic Growth and Enhancing Recovery: Adaptation, Mitigation, and Strengthening Productive Sectors for Improved Livelihoods.”

Key Government Priorities for 2023/24

The government’s focus for the 2023/24 fiscal year includes the completion of flagship and strategic projects such as the Standard Gauge Railway (SGR), the Julius Nyerere Hydropower Project, the Liquefied Natural Gas (LNG) project, and the J.P. Magufuli Bridge (Kigongo-Busisi). Additionally, there is a strong emphasis on deepening industrialization, enhancing service provision, promoting investment and trade, and advancing human capital and skills development.

Budget Overview

The proposed TZS 44.39 trillion budget outlines strategies to boost revenue collection in the 2023/24 fiscal year. The key initiatives include:

Improving the investment and business environment to attract both local and foreign investors.
Expanding the tax base and enhancing compliance through targeted measures.
Strengthening the use of ICT systems to improve efficiency and transparency in revenue collection.

Raising public awareness to encourage investment and foster collaboration with Development Partners.

What to Expect

These highlights reflect key proposals from the Minister’s budget speech. However, further changes may arise once the Finance Bill 2023 and subsequently the Finance Act 2023 are published.

Global / National Economic Update

Global update

The global economic growth rate declined from 6.3% in 2021 to 3.4% in 2022.
The global economy is projected to grow by 2.8% in 2023.
Economic growth in Sub-Saharan Africa slowed to an average of 3.9% in 2022, compared to 4.8% in 2021.
The Southern African Development Community (SADC) region saw an average growth of 4.1% in 2022, down from 5.3% in 2021.
The East African Community economies experienced average growth of 5.3% in 2022, compared to 6.3% in 2021.

National update

Tanzania’s Real GDP is projected to grow by 5.2% in 2023, up from 4.7% in 2022.
Inflation is expected to remain stable within the single-digit range, averaging between 3% and 7% in the medium term.
Tax revenue is estimated to increase to 12% of GDP in 2023/24, compared to 11.5% in 2022/23.
Domestic revenue is anticipated to reach 14.9% of GDP in 2023/24, up from 14.4% in 2022/23.
The budget deficit, including grants, is forecasted to stay below 3% of GDP.
Foreign reserves are expected to be maintained at levels sufficient to cover at least four months of imports of goods and services.

Amendments to Various Government Fees and Levies

The government has introduced amendments to various fees and levies across different agencies as part of its ongoing efforts to enhance the business environment. These adjustments are aligned with the implementation of the Blueprint for Regulatory Reforms to improve the business climate and ease the cost of doing business in Tanzania.
The amendments are expected to streamline procedures, reduce compliance costs for businesses, and promote investment by creating a more favorable regulatory environment. The changes reflect the government’s commitment to facilitating growth through more efficient and business-friendly regulations.

Stay informed as these updates take effect and explore how they may impact your operations or industry.