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The creative and cultural sectors face policy challenges that lead to inconsistent engagement between sector players and relevant ministries/institutions, subsequently apparent unbalanced development of creative and cultural sector; disorganized, mismanaged, fragmented associations in creative and cultural industries, low entrepreneurship skills and non-existent funding mechanisms for the sector. These challenges result from weak and non-existence of appropriate creative and cultural policy.

This was said during a recent Policy Forum monthly breakfast debate held on the 31st of May 2019 which was dedicated to discussing a report titled “ Assessing Creative Industries for Policy-Making in Tanzania”.

A presentation by Dr. Charles Ruyembe from CHIMABA, focused on the theme “Industrialisation for Economic Transformation: What are the Policy Reforms Required to Achieve the National Industrialisation Agenda?”  highlighted that there is a need of reviewing policies related to creative businesses, which includes, review of existing cultural policy, Intellectual Property Law and relevant public policies such as education, tourism and environment or trade.

Furthermore, to clearly define the role of the government in supporting young people to build a portfolio of core arts, culture, heritage, technical and digital technology inclusion in their future creative occupations, the government should establish a sustainable mechanism which will develop career management skills for all young people aspiring to join and work within the creative workforce.

Dr. Ruyembe accentuated that the social transformation or change must be connected to learning and performance to equip young people and women with adequate knowledge and skills, so that, as they graduate, they will have the ability to participate fully in creative jobs as active members in the Tanzanian society. Learning and performance are influenced by the culture but at the same time, shapes rather expectations of young people’s bright future and makes them able to create new ideas and contribute to the country’s economic development.

Significantly, the Executive Director of Copyright Society of Tanzania (COSOTA), Ms. Doreen Sinare said the main aspect of Copyright and Neighbouring Rights Law (IPRs) need to be strategically addressed in the public policy documents due to the fact that all creative industries are subject to Intellectual Property Law. The current Copyright and Neighbouring Rights Act is out-dated and needs amendment and thorough enforcement. It seems that there is lack of understanding the importance of Copyright and Neighbouring Rights Law Number 7 of 1999 on national economies, the arts, culture, heritage and creative industries business and creative sectors contribution to GDP and creative workforce opportunities.

Nevertheless, Ms. Sinare alleged that the policy has to come up with clear statements on the role of creative entrepreneurs, the local community or civil society with a vision to improve access and availability of modern apprenticeships all linked to the sustaining of creative and cultural provisions.

Similarly, Dr. Ruyembe insisted that the policy has to come up with a clear statement on the role of parents, guardians, teachers and the civil society on how the identification, measuring and profiling of current and future skills embedded in the creative capital of young people in Tanzania will be done. The evidence-based survey found that the government and the society have ignored nurturing the creative skills of young people, promoting creative jobs and putting clear opportunities in the creative industries for talented young people to see and join the creative industries and creative jobs and businesses of their interest.

However, the issue of inter-ministerial coordination needs to be addresses by the National Cultural Policy. The government with relevant ministries, agencies and institutions under their respective ministries and the private sector need to be mobilised to enliven the relationship between the creative sector and structure of the Tanzania’s public policies. Hence, there is no clear inter-ministerial coordination to connect policy making, planning, programming and establishment of a framework for policies that cut across Ministries for systematic implementation and positive outcomes.

In conclusion, through enhancement of “cultural resources” embodied in people’s creativity, skills and talents (creative workforce) creates a knowledge-based society which refers to: social relations (mobilize local communities and the Government to materialize and advance social change) , there should be a facilitation of young people and women to learn new things as they are the targeted group of this sector. Reinforcement of  old ideas (cultural heritage) to enable young people to create their own artistic language and contribute to their global development (innovation) and advertisement of the tourism industry should also focus on the creative industry.

The 2017/2018 CAG’s report has indicated areas of corruptive and fraudulent transactions amounting to TZS 207.12 billion. The amount is derived from weakness in the management of transit goods TZS 7.975 billion, human resources and pensions 2.59 billion, procurement and contract management TZS 133.17 billion, the expenditure management and budget execution TZS 54.48 billion and in management and collection of own source revenues TZS 8.66 billion. This was accentuated during the Policy Forum’s April Breakfast Debate entitled “2017/2018 CAG’s Report: Current Financial Accountability Trends in Tanzania” presented by Yona Kilaghane from Wajibu Institute of Public Accountability (WIPA).

Kilaghane highlighted that the National debt amount excludes Government obligations with Pension Funds of TZS 4,588.39 Billion. There is an increase of the national debt by 10.5% compared to previous year. Even though the national debt is sustainable, it will impact the society/development due to, servicing of the national debt is a first charge in government spending, which reduces funds for development expenditure and domestic borrowing is too expensive and that the Government should strive to target concessional debts.

Dr. Richard Mushi from the University of Dar Es Salaam tinted that the Financial Year 2017/18, the CAG’s report highlighted that the Parliament of the United Republic of Tanzania approved a budget of TZS 31,711.99 billion against actual revenue collection of TZS 27,695.96 billion resulting into under collection of TZS 4,016 billion (12.7%). And also, the total amount issued from the Consolidated Fund amounted to TZS 26,947.41 billion against total receipts of TZS 26,531.56 billion resulting in a deficit of TZS 415.844 billion.

KIlaghane uttered poor utilization of project funds in Local Government Authorities that hindered the implementation of development projects. The Government released only 51% of the LGAs budgeted development funds of which 34% was utilized and 17% was not utilized by Local Governance Authorities.

He also stressed on Public entities without board of directors and trustees stating that the CAG noted an increase trend of public authorities without board of directors from 20 entities reported last year to 27 entities in 2017/2018. This weakens internal oversight functions.

Although the word “Udhaifu” created a saga between the Parliament of United Republic of Tanzania and the Controller and Auditor General. The Former Controller and Auditor General Mr. Ludovick Utouh intervened by describing the word as a technical term which is utilised in different institutes to accentuate weaknesses and not a term used to suppress individuals nor organizations.

Recommendations that emanated from the debate;

  1. The Management of Ministry, Departments and Agencies should strictly ensure procurement complies with the Public Procurement Act 2011 to promote competitiveness and to obtain value for money for the goods and services.
  2. Compliance with the procurement law and its regulations, WAJIBU is recommending for the amendment of the procurement regulations to enhance transparency in the procurement process (e.g. publication of received tenders on the website, publication of the original and final cost of concluded projects) and law enforcing organs should be more pro-active in taking action on non-compliance with the procurement law.
  3. The law enforcing organs including PCCB, DCI, DPP to enforce the implementation of the amended Sect. 27 of the Public Audit Act No. 11 of 2008. In addition, Public Auditors need to adhere to the requirements of ISSAI 1224.
  4. The accountancy profession needs to review the basis of auditing and financial reporting in the public sector in view of issuing of audit opinion (financial and non-financial considerations).
  5. The CAG to give more explanations on the short-deposited funds in the Consolidated Fund and the overpayment from the Consolidated Fund.
  6. The TRA should increase its efforts in widening the Tax base and improving Tax compliance in order to increase the Tax/GDP ratio.
  7. Government to institute and establish a documented Fraud Prevention Plan & Fraud Risk Management

Despite the improvement in the audit opinions issued, accountability is still a challenge with regards to observations made in the Controller and Auditor General’s reports.

Monthly breakfast debates allow participants from various fields to debate issues, brainstorm on new ideas, discuss different perspectives on problems and exchange views with likeminded colleagues from different organizations. The aim of these debates is to deepen and broaden public discussion and participation in key contemporary development issues.


The tax system can directly reduce inequality by redistributing income from rich to poor, by taxing the rich more heavily and giving the government revenues to spend on public services. In Tanzania, there is a challenge of a large and increasing informal sector which has often gone untaxed hence subjecting a higher tax burden on the few within the formal sector. This in a way contributes to inequality because the informal sector partly constitutes relatively High Net Worth Individuals (HNWIS) whose incomes are not often subjected to tax.

Also, inequality may be rising because those within the informal sector have often been subjected to a presumptive tax which may at times be higher than what they actually earn. Due to the largeness of the informal sector, a smaller section of the population has been subjected to a huge burden of tax thus encouraging growth of the inequality gap in Tanzania.

Informal sector in Tanzania is among the strategic sector yet contributes marginally to tax revenue generation. It consists of micro, Small and Medium Scale Enterprises. Main characteristics of the sector includes: semi-organized and unregulated activities undertaken largely by the self-employed people, minor and decreasing barriers to entry thus, creating a potential base for rapid expansion once the opportunities and incentives are present and it is relatively more labor-intensive and can generate more jobs with smaller capital.

Trend of informal sector in Tanzania

There is a significant increase in the number of people engages in informal sector activities in the country. The number of people employed increased from 1,682,383 in year 2006 to 4,344,580 in 2014 and estimated to be 5,416,107 people in year 2017. It is estimated that informal sector employs to about 31.2 percent of currently employed persons in the country. Retail trade is the dominant industry that composed of many of the informal activities accounting for 47.9 percent of total informal employment in the country. However, the presence of highly growing informal sector in Tanzania has been viewed as the challenge for taxation, regulation, financing, reforms, and provision for social services with efforts to alleviate poverty overtime. Many operates in retail trade (41%), manufacturing (14%), and accommodation and food service activities (12%). The critical masses are business owners, managers, operators and have basic (primary and secondary) education and limited entrepreneurial education, training, and other skills. Majority SMEs activities are increasing located in urban centers and many operate their business activities in the rented areas. Most of SMEs start their businesses with minimum capital investments of less than 5 million Tshs with moderate capacity utilization and profit levels.

Revenue collection from informal sector using presumptive tax system

The government of Tanzania encourages informal SMEs to fully enter the formal sector through registering for and paying taxes. Through presumptive income tax it promotes the culture of compliance and sets the stage for the firms to grow and become a bigger taxpayer. Presumptive tax system in operation is a special tax measures or tax preferences and pervasive element in the income tax system of Tanzania. It has made sense in the Tanzania environment where the otherwise desirable income tax base is difficult for the tax authorities to measure, verify, and monitor. The general objectives for the presumptive income tax are: to create a culture of taxation and the regularization of the rule of law, provide education and training on how to monitor business activities, increase the size of the formal sector and promote growth.

The overall impact and effects have been significantly improvement in the domestic revenue mobilization, introduction of some tax incentives, increase accounts preparation awareness among the informal sectors and improvement of tax collection strategies have contributed to the persistent increase in both kinds of tax payers. However, while presumptive income taxes for the first category has been high suggesting that TRA has instituted tax incentives to encourage firms preparing and keeping formal accounts, it is true for the second category that the presumptive tax system has not been very effective and significant enough to change the behavior of the informal sector.

For many micro and small entrepreneurs in developing economies, the choice to pay tax or remain in the informal sector is a socio-economic complex decision. Most firms will choose to stay in the non-tax paying informal sector by default since the perceived short-term and temporary benefits outweigh the perceived immediate costs.  If compliance costs both financial and time are added into a firm’s cost-benefit analysis of paying taxes, the disincentive to comply with tax requirements becomes even stronger.


The size of informal sector is growing overtime and it is owned by mostly youths and adult groups. This implies that, government revenue collection base gets narrowed hence increase the burden of tax to the formal sector and government itself to cover the provision of public services.

The government should strengthen the formalization process of informal sector in the country as the way of increasing tax base. The government and other stakeholders should invest in the provision of business education to the business operators. Education system and curriculum should be improved by giving room for graduates who are job creators and not seekers. The government through the small and medium industries should continue to promote SMEs development through the provision of advisory services, infrastructure facilities, market access, financial support and many other supporting services. Civil Society Organizations (CSOs) and other related stakeholders should improve the provision of further entrepreneurial education, skills, seminars and workshops to the business operators.






The Policy Forum (PF), a network of 79 civil society organisations brought together in their interest in public money accountability, has prepared this position statement to stimulate and inform ongoing discussions on the 2019/20 budget. The submission, with inputs from member organisations coordinated by the network’s Budget Working Group (BWG), focuses on the implementation of the Five-Year Development Plan (FYDP II 2016/17 to 2020/21) whose theme is ‘Nurturing Industrialisation for Economic Transformation and Human Development’ will culminate in the next financial year (2020/21). Soon thereafter, the longer-term National Development Vision 2025 whose aspiration was that of transforming the economy into middle income and semi-industrialised state, will also have concluded.

This brief analysis, therefore, takes stock of what has been accomplished since the inception of the FYDP II in 2016/17 and tries to capture information on priority areas addressed in the annual plans, allocations and disbursements based on both domestic revenue and external sources and implementation progress in some selected sectors. The submission puts forwards some key policy recommendations that warrant policy makers’ attention if some desired objectives of the current plans are to be realised.

An Overview of the Budget at the National Level

From 2016/17 to 2019/20, the national budget has been gradually increasing between the range of 2% to 7% with the highest increase of 6.8% observed in 2017/18 (TZS 31.7 trillion from TZS 29.5 trillion in 2016/17) and the lowest increase of 1.9% observed in the proposed 2019/20 budget (TZS 33.1 trillion from TZS 32.5 trillion in 2018/19).  A similar gradual trend is observed when the budget is further broken down into development and recurrent expenditures. See figure 1 for these allocations.


Tax Revenue (bil)

Non tax Revenue (bil)

Domestic & External Borrowing

Grants and Concessional loans (bil)

Total Budget (bil)

























Table 1: Sources of Funding from 2016/17 to 2019/20

Revenue Collection and Disbursement Trend

During this period (2016/17 to 2018/19), tax revenue has remained the only source of funding that has been performing well compared to others. External borrowing, assistance and General Budget Support have, on the other hand been inadequate, calling for strategic measures of improving domestic resource mobilisation. In the 2016/17 budget of TZS 29.5 trillion, for instance, the government managed to collect TZS 25.3 trillion with tax revenue collecting over 90% of the target and external borrowing, assistance and General Budget Support contributing 53.5% of the target.

Tax revenue has over the years seen consistent growth both as share in the budget and in collection. Generally, tax revenue constitutes over 50% of the funding. Other sources of funding (non-tax revenue, domestic and foreign borrowing and grants and concessional loans) to the budget show an inconsistent pattern. Table 1 shows the contribution of different sources to the budget over the period under review.

Despite the continuous increase in the budget from 2016/17 to 2019/20, levels of disbursements have not been encouraging. This to a large extent is attributed to missing revenue collection targets from both domestic sources and foreign ones. The development side of the budget has been the mostly affected expenditure category in terms of disbursement.

While the 2016/17 budget for development expenditure almost doubled from TZS 5.9 trillion in 2015/16 to TZS 11.5 trillion, actual expenditure by the end of the year was only TZS 4.2 trillion representing 52% of the targeted expenditure[1].

According to the report by the Controller and Auditor General for the year ending June 2018, the government managed to collect TZS 27,696 billion for its 2017/18 budget. This represents 87% revenue collection performance from both domestic and foreign sources. This revenue collection was realised from tax revenue, non-tax revenue, domestic borrowing, grants, external concessional loans and external non concessional loans at the rate of 89%, 55%, 92%, 88% 89% and 109%, respectively.

While the government had planned to collect TZS 20,894.6 billion as domestic revenue in its 2018/19 budget, until January 2019 it had collected over 50% of the target (TZS 11,005.6 billion). On the other hand, during the same period grants and concessional loans had been received to the tune of TZS 125.4 billion, which is only 5% of the target (TZS 2,676.6 billion).

In terms of disbursement during the financial year 2018/19, until January 2019 the government had released TZS 1,034.8 billion. Out of this, TZS 10,962.1 billion was for recurrent expenses (which is 53.6% of the target) while development expenditure had received TZS 2,788.5 billion which is only 23% of the allocation (TZS 12,007.3 billion).

The recent report by the Controller and Auditor General for the financial year ending June 2018 continue to manifest serious problems in the use of public resources. It is also noted that in terms of working on the recommendations to improve financial discipline, there are inadequate improvements compared to last year owing to the inadequate management follow-up to address the outstanding audit recommendations.

Based on previous years budget allocations and disbursements, the estimates for 2019/20 seem to be a bit realistic. It is high time that our government plans based on resources it can potentially and realistically collect. An increase of a merely 2% of the budget can be realised if we keep enhancing mobilisation of domestic resources by closing all revenue leakage loopholes.

Trend in some selected sectors

  1. The Allocation Trend of Education Sector Budget

The government has for a while now taken the sole responsibility of financing basic education in the country through fee-free policy. By this decision, stakeholders and the general public would expect the budget for the sector to increase significantly. Surprisingly, for the past three financial years, the trend of allocation in the education sector has declined.

The education sector budget in the last three FYs has dropped from TZS 4,770 billion in 2016/17 to TZS 4,706 billion in 2017/18 and now to TZS 4,628 billion in this (2018/19) FY.  This drop is equivalent to TZS 142 billion (equivalent to 3%) from TZS 4770 billion allocated in FY 2016/17 to TZS 4628 billion allocated and approved for FY 2018/19 expenditures. 

Further, the proportion of education sector budget has declined from 17% in 2015/16 to 14% in 2018/19. This decline has not only lessened education sector’s position in government’s sectors priority lists but has also been short of regional and international commitments such as the Dakar commitment to allocate at least 20% (inclusive of the national debt) of the national budget to education sector.


[1] Report of the Controller and Auditor General for the year ending June 2017.

(Source: Budget books & citizen budget for 2016/17 – 2018/19)

It is important to note that during the financial year 2016/17 and 2017/18 Science, Technology and Innovation (STI) was not amongst the government priorities in the education sector, and as such no specific allocations were made toward this area. In the 2018/19 budget however, there was 0.6% of the budget for the education sector set for STI. Although it is a small amount, but we commend the government for this step; hoping that it will attract more resources in the future.

Budgeting for fee-free effect

Fee free policy has led to increased enrolment in both primary and secondary schools by 17% and 12.6% respectively.  With an increasing enrolment and decreasing budget, the education sector is haunted by several challenges including but not limited to shortage of classrooms, latrines and teachers’ houses.

According to the Controller and Auditor General (CAG)’s Audit Report for FY 2016/17, Primary schools have 85% classrooms shortages, 83% pit latrines shortage, 66% teachers’ houses and 14% students’ desks shortages. Further, secondary schools have 52% shortage of classrooms, 84% laboratories, 86% desks, 85% teachers’ houses, 88% dormitories and 53% pit latrines shortage. Therefore, with these challenges, it is indeed imperative that the government consider proper and adequate financing for the sustainability of the sector.

Key recommendations to the government:

  1. On the employment of Teachers: A teacher is a fundamental pre-requisite for students’ learning. The government in FY 2018/19 employed 4,840 for primary and secondary schools and in February 2019 announced to employ around 4,549 at different levels. The government is reminded to implement a promise of employing 10,140 primary teachers as stated in 2018 in the upcoming FY.
  2. While applauding the government’s decision of removing Value Added Tax (VAT) for disposable female’s sanitary pads made during the 2018/19 budget, we strongly recommend setting a mechanism of implementing such decision. We further suggest that the VAT deduction shouldn’t not only be in disposable pads but to reusable pads that are widely used too.
  3. There is a need to visibly stipulate innovation fund in the budget, instead of indirectly reflecting it in another ministries’ budgets. Also, the fund should be used to accumulate internal sciences, technology and innovation (STI) capabilities through investing in human capital and institutions as well as strengthening innovation system.


  1. Water Sector

Tanzania, being a member of the United Nations signed and thus has accountability to the Sustainable Development Goals (SDGs) which cover a wide range of drivers across the three pillars of sustainable development, and include a dedicated goal on water and sanitation (SDG 6) that sets out to ensure availability and sustainable management of water and sanitation for all. SDG 6 expands the MDG 7 focus on drinking water and basic sanitation to now cover the entire water cycle, including the management of water, wastewater and ecosystem resources, with water at the very core of sustainable development.

Trend of Funding for the past three years (2016/17-2018/19)

While the development budget for the water sector during the last three years has largely depended on internal sources, the development budget for the irrigation sector has on the other hand depended largely on external sources. See table 2 below.


Total Development Budget (Water sector exclusion of irrigation)

Internal sources


External sources



























Table 2: Development Budget sources of funding:

 Source: 2016/17-2018/19 Water and Irrigation budget speech                                           

Budget disbursement in the sector

Based on the implementation of the 2016/17, 2017/2018 and 2018/19 budgets, the gap between allocations and actual disbursement potentially affect aspirations of addressing key gender sensitive challenges in the sector. For instance, only 56% of the total development budget for the 2017/18 fiscal year had been released by March 2018.

In 2015/2016 and 2016/17 only 28% and 27.7% of the budgeted money was disbursed, respectively. In the last financial year only 22% of the budget was disbursed by March 2018. This confirms that despite an increase of about 5% in the 2018/2019 FY, the challenge remains on the release of this budget to address challenges on the ground even though the increment may suggest the commitment of the government to address challenges in this sub sector.

Dependence on foreign funding sources comes with its challenges. In many occasions, there are experiences of delays in disbursement. A typical example is in the construction, rehabilitation and extension of water projects in district headquarters, towns and national level projects. In 2016/17 a total of TZS 47 billion were set from internal sources and TZS 33 billion from external sources. While up until March 2017, TZS 13 billion of internal funds were disbursed and nothing was disbursed from external sources during the same period. (See Sub vote 3001 of FY17/18 Budget).

General observations in the water and irrigations sector budget for the past three years (2016/17-2018/19

  1. There is lack of strategic gender mainstreaming and sex-disaggregated data in most budget speeches and reports which limit the integration of gender into budgeting documents.
  2. The water sector budget is broadly aligned to sector policy priorities but the delays in disbursement of development funds to LGA are set to persist. 
  3. There is no doubt that the budget set for water sector for 2017/18 is too low as compared to the magnitude of the problem. On the other hand, there is no reason to come up with an unrealistic budget that cannot be realized. It is far better to plan and implement small than being overambitious beyond what the country can afford.

Our key recommendations:

  1. The government must establish timely and sufficiently allocation and disbursement of water sector budget particularly for development projects in order to meet policy targets by 2020 and 2025 as well as the Global Agenda by 2030.
  2. The government needs to establish separate budget lines and allocate enough funds for scaling-up investments on sanitation and hygiene for households/community, schools and health.
  3. The government to improve and harmonise gender disaggregated data on water and sanitation sector with a very strong and real database informed by a Monitoring and Evaluation Framework to inform evidence during planning and budgeting process.


  1. Health Sector

Share of the health sector in national budget

For the FY 2018/2019, the Government of Tanzania has allocated TZS 2,054 billion for the health Sector, which is 8.9% of the National budget exclusive of Consolidated Funds (CFS) or 6.1 inclusive of CFS[1]. The overall allocation for Health Sector has gone down by 8% (TZS 2,222 billion in 2017/18 to TZS 2,054 billion in 2018/19) and is almost even with the allocation for 2016/17 of TZS 2,055 billion.

[1] Calculations of health as a percentage of total government budget are made using total government budget figures inclusive of consolidated funds services, which includes mandatory debt repayments, government contribution to pension funds, and other non-discretionary expenditures.

The Health Sector Budget allocation trend has not been in line with the increasing demand based on population growth and high disease burden. Figure 5 shows a declining trend, which is far from attaining the Abuja target (15%) of which the Government is a signatory.

Budget Allocation vs. Strategic Plans

The fourth Health Sector Strategic Plan (HSSP IV) has estimated financial resources required to enable its implementation in improving health and wellbeing of citizens. However, there is a notable financing gap as the trend of fiscal budget allocation to the health sector has been lower than the annual targets by about 50% as shown in figure 6. This financial gap directly affects the public per capita allocation; therefore, significant policy and systemic implementation measures need to be undertaken to cover this gap.

Compositions of Health Sector Budget (Development Vs. Recurrent)

The increase in trend of development budget allocations for the years 2015/16 to 2017/18 indicate efforts towards increase in the use of technology, decrease of manpower and attaining the LMIC status (Figure 7).  The slight decrease of 2018/19-budget development share calls for attention to attain the 2025 goal.

Compositions of Health Sector Budget (Domestic vs. Foreign)

Composition of health sector Budget (Domestic Vs. Foreign) shows an increase in domestic contribution by 5% from previous year and by 10% since 2015 in real terms.  The domestic budget allocation for FY 2018/19 is TZS 1,736.1 Billion, which is equal to 85% of the total budget. The increase in domestic allocation is a realization of continued efforts made by different Stakeholders who advocate for increased domestic share for the health budget. Equally, it demonstrates commitment by the Government to allocate more domestic resources to finance the Health Sector.

Key recommendations:

  1. Budget allocation should consider population growth and increasing disease burden.
  2. Future budget plans should take into consideration strategic documents, which have been developed by different stakeholders and the Government itself.
  3. It is important to close the funding gap in the costing of HSSP IV to ensure that the country remains on track to complete the objectives set in the plan, which ends in 2020.



Share of the sector in the national budget

Agriculture financing in the country experiences challenge of meagre resources allocation as compared to other sectors. The declining trend of agriculture sector financing clearly indicates its low priority in the current administration (Figure 8). Based on this, the agriculture transformation and industrialization agenda that have impact on economic growth and poverty reduction will be a mere dream.


  1. Development vs recurrent budget

Low budget allocation to development expenditure over time is observed, however it is important that the government plans what it can realistically be able to implement.



Budget Estimates (TZS)

Recurrent Expenditure

Development Expenditure


















Table 3: Development VS Recurrent budget figures

Sources: MoA (Vote 43) 2017/18 to 2019/20


  1. Development Partners (DPs) commitments in financing in agriculture


The issue of honouring commitments is a challenge to both government and Development Partners, which in turn affect project implementation.
















Table 4: Development Partners (DPs) Commitments to the Agriculture Financing (2014/15-2017/18)

Source: MoA

  c. Financing through the Agricultural Development Bank (TADB)

Despite its potential to transform the economy and its contribution to GDP, the agricultural sector in the country is still largely underfinanced. The Agricultural Development Bank (TADB), however, was established in 2012 to strengthen the agriculture financing value chain including the facilitation of rural lending.

According to the CAG report of report 2016/17, TADB experienced challenges early on during the delivery of this mandate. It was reported to have invested a significant part of its funds in fixed deposits instead of issuing loans to farmers (CAG report 2016/7). According to the report, as to the end of 2016, the bank placed TZS 54.7 billion in fixed accounts, which is equivalent to 91% of the total advance towards share capital. The report also highlighted that, out of total loan portfolio of 3.95 billion, loans and advance to staff stood at TZS 1.71 Billion while TZS 2.23 Billion went to farmers as loans.

In order to implement recommendations made by the CAG, TADB proceeded to develop a pipeline of agricultural projects for financing. The bank adopted the clustering and value chain financing approach which has identified eight clusters and respective value chains of focus which are in consonance with the country’s agri-ecological zones defined by the ASDP II programme.

In terms of outcomes, TADB financed 91 projects in eight of the clusters (21 regions) with loans worth TZS 712.9 billion advanced to over 1.7 million farmers. TZS 600 billion of total loans were advanced to finance the off-taking of cashew in the 2018/19 season while 112Billion have been advanced to other crop value chains.

Disbursed loans increased from TZS 662 million in March 2016 to TZS 2.65 billion in December 2016 and rose to TZS 10.49 billion by the end of 2017. In 2018, disbursed loans rose by TZS 284.0 billion and reached TZS 295.04 billion by the end of the year. TZS 428.9 billion was disbursed in 2019 to make cumulative disbursements reach TZS 712.9 billion by March 31, 2019.

In addition to lending, TADB is managing the Smallholder Credit Guarantee Scheme which incentives – through risk sharing – commercial banks to increase lending to smallholder farmers. The scheme is implemented in partnership with five commercial banks. Loans worth TZS 3.34 billion were issued to 871 smallholder farmers in various regions as of March 31, 2019.


  1. Prioritize the agriculture as an important development agenda through enough budget allocation to key investment areas such as irrigation, extension services, markets, research, inputs subsidies and climate mitigation.
  2. Both government of Tanzania (GoT) and Development Partners (DPs) financing agriculture need to honour their commitments/pledges for agriculture projects undertaking.

Summary of our key policy recommendations:

  1. Keep enhancing mobilisation of domestic resources to improve budget credibility. This could among others be done through improving the business environment and registering eligible tax payers those that are not in the tax net yet.
  2. Improved mobilisation of domestic resources without financial discipline will not get the country to any positive stride. It is encouraged to improve management in the use of public resources and work on the recommendations provided in the audit reports.
  3. There is a need to promote research, development and innovation in order to achieve industrialization given the roles of such parameters in influencing industrial growth.
  4. The government should improve and harmonise gender disaggregated data on water and sanitation sector with a very strong and real database informed by a Monitoring and Evaluation Framework to inform evidence during planning and budgeting process.
  5. Call for increased allocation and disbursement trend of the education and health sectors’ budget especially development budget including the sector’s development budget disbursement challenges being addressed.
  6. Deliberate efforts and strategies are needed to ensure enough investment in health in terms of planning, allocation, disbursement and efficient execution of resources.

UPDATE: After publication of this Pre-Budget Position statement in The Guardian newspaper of the 29th of April, 2019. The Agricultural Development Bank (TADB) contacted Policy Forum with updates on their implementation of the recommendations of the Controller and Auditor General’s report of 2016/17. The update provides a more realistic representation of the status of loans provided to-date and hence warranted inclusion herein.

The agriculture sector section of this Pre-Budget Position statement which makes reference to TADB has hence been updated and the full rejoinder from the bank is included below.


In order to implement recommendations made by the CAG, TADB proceeded to develop a pipeline of agricultural projects for financing. The bank adopted the clustering and value chain financing approach which has identified eight clusters and respective value chains of focus which are in consonance with the country’s agri-ecological zones defined by the ASDP II programme.

In terms of outcomes, TADB financed 91 projects in eight of the clusters (21 regions) with loans worth TZS 712.9 billion advanced to over 1.7 million farmers. TZS 600 billion of total loans were advanced to finance the off-taking of cashew in the 2018/19 season while 112Billion have been advanced to other crop value chains.

In addition to lending, TADB is managing the Smallholder Credit Guarantee Scheme which incentives – through risk sharing – commercial banks to increase lending to smallholder farmers. The scheme is implemented in partnership with five commercial banks. Loans worth TZS 3.34 billion were issued to 871 smallholder farmers in various regions as of March 31, 2019.

Other achievements recorded include growing the bank’s service outreach by operationalising three zonal offices; TADB Eastern Zone office in Dar es Salaam, TADB Lake Zone office in Mwanza and TADB Central Zone office in Dodoma. TADB is at final stages of opening its Southern Highlands Zone office in Mbeya and a liaison office in Kigoma. Additionally, the bank has trained over 20,000 smallholder farmers and livestock keepers in numerous regions.

TADB has made profits for three consecutive years and posted TZS 5.9 billion in retained earnings which among other factors, contributed to growth in shareholder’s funds by TZS 7.5 billion to TZS 67.5 billion by the end of the first quarter of 2019.

Going forward, TADB is implementing its Funding Strategy which aims to raise resources to facilitate the transformation of the agriculture sector. Priority projects include irrigation projects, nucleus farms and agro-processing projects, construction of modern storage facilities, establishment of farm clinics and mechanisation centres, and aggregating smallholder farmers into commercialised producer groups and then training them and linking them to markets.

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[1] Report of the Controller and Auditor General for the year ending June 2017.

[2] Calculations of health as a percentage of total government budget are made using total government budget figures inclusive of consolidated funds services, which includes mandatory debt repayments, government contribution to pension funds, and other non-discretionary expenditures.

The 2017 -2020 strategic plan (SP) of Policy Forum focuses more on strengthening the Monitoring, Evaluation and Learning (MEL) practices within the network by fusing Results Based Management with ‘Process Tracing’ to deepen the understanding of the impact of the advocacy and policy influencing work that PF facilitates and help strengthen the ‘contribution claims’ by examining the processes where change is thought to have occurred and improve the credibility of the claims. Currently, Policy Forum is gathering evidence of the dynamics, causal links, the positive or negative changes and lesson learned throughout the two years of implementing the new SP for program improvement. Embedded is a video showcasing a positive result of the morning Breakfast Debate coordinated by PF as a platform for its members and other stakeholders to discuss systemic policy issues.


Back in 2006, the Integrated Labour Force Survey (ILFS) noted that the number of informal sector operators in Tanzania was growing fast and their share to the GDP was significant with implications on Government loses in revenue if they were not taxed.

A recent study by Policy Forum in 2018 corroborates this observation but stresses that in order to adequately determine the extent of revenue losses, an appropriate measure of the size of the informal sector is needed. The report “The Nexus between Taxation of the Informal Sector and Inequality in Tanzania,” notes that it depends on how the concept of informality is treated, operationalized, managed and what empirical information is relevant and available to enhance policy.

To this end, it was useful for stakeholders to meet and discuss this topic on informal enterprises and what it means to a Tanzania striving to become a middle-income country. The Policy Forum’s March Breakfast Debate entitled “Transforming Trade and Industry in Tanzania: Facilitating the Formalization of Micro-enterprises” convened on micro-enterprises to air their views on how policy issues impacting small firms.

Dr. Olomi from IMED (Institute of Management and Entrepreneurship Development) stressed that youth and adults participate in the informal sector as a way of generating income and opportunity for self-employment. Through self-employment, there is more employment opportunities creation, technological progress, and increase in per capital income as well as reduction of absolute poverty, (Tanzania Human Development Report, 2014). Informal Sector entrepreneurs can also mobilize their own savings. This reduces its vulnerability to external shocks compared with the levels faced by the formal sector.

In Tanzania, the informal sector includes non-agricultural enterprises owned by individuals or households that are not constituted as separate legal entities independent of their owners, have limited set of accounts and produce some of their goods and services for sale, (Integrated Labor Force Survey, 2014). It consists of mainly the registered, unregistered and hard-to tax groups such as micro scale traders, street vendors, retailers and in rare cases wholesalers who trade in products such as food, clothes and electronic appliances, small manufacturers, craftsmen, individual professionals and other small-scale businesses.

Specifically, on youth, he continued to say that the government recognizes them as a significant group in national development strategies. Several programmes are targeting youth entrepreneurship  and  transformation  to  formal  sector  that  can  be  more  sustainable  and  enable  government collect tax.

More broadly, Tanzania has piloted several approaches to formalize the micro enterprises. Faraji Mbulalina from President's Office Regional Administration and Local Government said that entrepreneurs have been provided with special areas to conduct their businesses and continued by noting that PORALG, through H.E John Magufuli, has initiated the process of providing the informal sector with identity cards in order to recognize their businesses.

Ambassador of Denmark to Tanzania , H.E. Einar Jensen stressed informal businesses are an untapped resource. The reality of substantial, important and valuable economic activity taking place in small firms has not yet been reflected in the legal, regulatory and policy framework to any great extent. Both the TRA and the local government authorities are more preoccupied with the short-term objective of maximizing revenue from small firms than in strengthening their performance in the regional, national and local economy, the source of long-term prosperity.

Japhet Makongo, Policy Forum’s Board - Chairperson stressed that government should use all participatory best practices in the current small-business formalisation drive in Tanzania. The government, through the small and medium industries should continue to promote SMEs development through the provision of advisory services, infrastructure facilities, market access, financial support and many other supporting services. This may help a number of Small and Medium Enterprises program to develop with the vision of improving the competitiveness at the market and at the end be formal business.

Furthermore, in the process of formalization, it is upon the government to revise the business registration processes by reducing the cost of registration imposed by BRELA and smoothen the registration requirements so as to attract more informal business to register their business. This will improve processes of registration and incentivize entrepreneurs and business operators to register their business and enhance formalization

One of the participants from the SMEs commented that when the government introduced the tags, they were sold but asked whether they are any services provided to facilitate the ease of doing business and also suggested that SMEs should be involved in making and implementing the PORALG business manual.

The Embassy of Switzerland in Dar es Salaam through the Swiss Agency for Development and Cooperation (SDC) has launched the third phase of its Social Accountability Programme (SAP) which provides support to key national Civil Society Organizations (CSOs) who are working to improve accountability in Tanzania.

Switzerland is committed to further its support towards enhanced responsiveness and accountability of public authorities for better services to women, men and youth in Tanzania. Switzerland will contribute USD 7.64 million (TZS 18 billion) over the next four years to key accountability organizations: The Foundation for Civil Society (FCS), Policy Forum, and Twaweza.

The Embassy of Switzerland is proud to be partnering with these CSOs who are key policy actors working for the betterment of the lives of ordinary Tanzanians. Switzerland firmly believes that a vibrant civil society is key to Tanzania’s ambitious development agenda of becoming a middle income country by 2025.

SAP complements Switzerland’s support to key accountability actors of the Government of Tanzania, including a long standing partnership with the Prevention and Combating of Corruption Bureau (PCCB) in enhancing its investigative capacity, as well as the Swiss contribution to the Good Financial Governance (GFG) programme. The GFG programme, implemented by GIZ, provides capacity building and technical support to the National Audit Office, the Internal Auditor General Division and select local government authorities for improved financial governance and increased domestic resource mobilization.

Switzerland has supported bilateral and regional projects in Tanzania since the early 1960s and continues to provide around USD 22 million in assistance annually, covering the health, employment and income, and governance sectors. 

About FCS

FCS is a grant making and capacity building organization, supporting grassroots CSOs across the country. FCS provides grants and capacity support to an average of 150 CSOs annually under their key thematic focus areas. For more information:

About Policy Forum

Policy Forum is a national policy advocacy network with a membership of 79 CSOs focusing on an accountable use of public resources in various sectors. For more information:

About Twaweza

Twaweza is a regional CSO focusing on citizen agency and civic space. Twaweza works to protect civic space, enable citizen voices to be taken seriously in decision-making and showcase citizens solving their own problems. For more information:

Photo credit to Reinout


Stakeholders of the wildlife conservation have urged the government to align conflicting Acts that affect wildlife and tourism sectors for better conservation and management. The stakeholders voiced their concern during the Policy Forum’s February Breakfast Debate entitled “Challenges of Managing Natural Resources with Conflicting Legislation: The Case of The Wildlife Act”. One among the conflicting legislation is the Wildlife Act and Mining legislation. The chairperson of Tanzania Parliamentarian Friends of Environment (TAPAFE), Hon. Jitu Vrajlal Soni, Member of Parliament from Babati accentuated that the Wildlife law prohibits mining activities in Reserved Lands. However, Mining legislations give power to the Minister responsible to issue permits and licenses for a person or a company to conduct Mining activities in any area of Land in Mainland Tanzania. On the same line, it was emphasized that, a reserved land therefore can be de-gazetted to allow Mining activities to be undertaken. Since Mining as an activity is more perceived to generate more money and could be used as basis for reserved to be converted into a mining cite more easily than Mining area to be converted into reserved land even if it is ecologically sound to do so.

Another conflict between legislation was stressed by Advocate Edward Lekaita from Ujamaa Community Resource Team, he highlighted that, the Wildlife Act prohibits settlement in the areas surrounding some parts of Loliondo. These areas are regarded as reserved land despite being inhabited by several villages settlement which are recognized by the Village Land Act and some of them possess Village Land Certificates.

On the other hand, in Tanzania all land is vested in the President as a trustee on behalf all citizens. The Land Act of 1999 states that the president can transfer land from one category to another (section 4(2)):

”The President and every person to whom the President may delegate any of this functions under this Act, and any person exercising powers under this Act, shall at all times exercise those functions powers and discharge duties as trustee of all the land in Tanzania so as to advance the economic and social welfare of the citizens”

Significantly, Hon. Yusuph Salim Hussein, Member of Parliament from South Pemba mentioned that result of the conflict of among laws and policies have created a serious hindrance on effective implementation and more importantly the aspects of benefit, rights, access, control and ownership of natural resources.

The morning discussion went further by discussing on how the Wildlife and Conservation Act 2009 gives less power for local communities to control, own, access and benefit from wildlife products compared to Forest legislation on utilization of products. Forest Legislation is considered to be the most progressive since it gives more powers and flexibility to local communities to utilize forest products with less control from state organs.

Natural resource laws need to be integrated in order to give communities more rights and flexibility to explore more benefits from the Forest, Wildlife, Land and Other Natural Resources without barriers.

Also, there should be provision of National dialogues to enhance learning and discussions between the government, communities, CSOs and Private Sector on management of natural resources at least once per year to build capacity of key institutions in order to improve both management and governance of natural resources.

Over the years the law-making process has lacked inclusivity and transparency. There is little involvement of the community members however, the government must ensure that Natural Resource Management Policy and Legislative making process are inclusive and must be done collaboratively. The government alone or for a few privileged classes of the society or experts cannot be the key drivers of the process. “We need the government to change the way community is involved in preparation of country laws and regulations” said one of the attendees.

Due to the fact the important policy, regulations and laws on Natural Resource Management are in English and the community that benefits from natural resources are Swahili speaking, translation of the laws should be done to allow the community to easily follow and understand their rights.


Development and the use of social media has been increasing all over the world serving the purpose of communication and information sharing amongst the public and institutions including the government, triggering the state to adopt social media as one of the important alternatives to reach out to the masses. In Tanzania, this also seems the case as the government attempts to accomplish various e-government goals providing public services to its citizens.

This was revealed at the Policy Forum Breakfast entitled “Is Social Media an Alternative Forum under the Context of Shrinking Space in Tanzania? ” based on a research by Dr. Aikande Kwayu aimed at exploring whether civic activities have shifted to social media in Tanzania.

Expounding on her research, she acknowledged that most entities in Tanzania including political party leaders have engaged social media as a tool for outreach to vocalizing their agenda to the community allowing candidates to communicate directly with citizens, keeping control of the content, distribution and timing of their messages, as well as reducing their dependence on traditional intermediaries such as journalists

Articulating her testimony Dr. Kwayu responded that she was personally affected by the Online Content Regulations as she was forced to shut down her blog not because of the annual fees that was put up against bloggers but because the regulations were too general and not clear on what they aim to achieve.

However, the government has also used social media to inform the public on new presidential appointments and development related issues for instance on Instagram , the state house has a page known as @ikulu_mawasiliano which is applied for communication between the state house and a wide range of Tanzanians who are also Instagram users.

“Fake news is real!” said Dr. Muhidin Shangwe of the University of Dar es Salam who was the discussant of the debate. There is a huge importance in the accuracy of information disseminated as it may mislead the end user.

Highlighting on internet censorship, Dr. Shangwe indicated more than two million people in China are employed by the government to monitor web activity, providing a rare glimpse into how the state tries to control the internet[i]

It was debated that social media can be used as a tool to instigate collective actions such as Arab Spring protests. Some of these digital protests may succeed and others may prove futile such as an incident that happened on April 26th , 2018 whereby a Tanzanian blogger who resides in the United States known as Mange Kimambi mobilized people on Instagram to protest against the current regime.

Dr. Kwayu highlighted as closing remarks the following as recommendation; Civic space is not given to an individual , it needs to be created it by being more vigilant and there is a need to filter the relevance of news differentiate fake news from real.




Stakeholders in Tanzania have been reminded that in order to fight corruption successfully, it was important to bear in mind that the vice was more of a structural problem than one of individual moral turpitude, and as such, it can only be addressed by comprehensive structural change.

This was said during a recent Policy Forum monthly breakfast debate held on the 30th of November 2018 which was dedicated to the launch of the review of the functions of the Prevention and Combating of Corruption Bureau (PCCB) to determine whether the public was obtaining value for money in the fight against corruption in Tanzania.

Entitled “Tanzania Governance Review: Are Efforts to Prevent and Combat Corruption Good Value for Money?”, the main presentation was made by Brian Cooksey from the Tanzania Development Research Group in partnership with Paul Mikongoti and Fundikila Wazambi from the Legal Human Rights Center (LHRC).

Paul Mikongoti commenced by introducing the bureau and its functions as being “responsible for corruption control in Tanzania’s criminal justice system” and “answerable to the President’s office, not to parliament.  PCCB can only bring to court cases approved by the Director of Public Prosecutions (DPP)”.

Mikongoti continued by saying Tanzania’s last three presidents (Mkapa, Kikwete and Magufuli) all found fault with their predecessors’ anti-corruption record, but external pressures have also been instrumental in shaping Tanzanian anti-corruption efforts.  As CCM’s presidential candidate in the country’s first competitive elections (1995), Benjamin Mkapa ran on an anti-corruption platform. Both local and external observers perceived that economic liberalisation under President Ali Hassan Mwinyi (1985-95) had been accompanied by a quantum leap in the incidence of corruption in state institutions and in relations with elements of the private sector. Mkapa’s accession to power coincided with the emergence of the global anti-corruption movement, and the rise of ‘good governance’ as an influential concept in the aid lexicon.

He highlighted from the findings after its establishment in 2007 and said PCCB grew rapidly in both staffing and national outreach. “PCCB claims to have a presence in every region and most districts in the country. Yet the number of corruption cases brought to court is a small fraction of the cases reported and investigated, and the number of convictions is remarkably low. While the expansion of the Bureau outside Dar es Salaam has increased the number of petty corruption cases brought to court, there has been little progress in sanctioning top officials and businesspeople involved in grand and political corruption.”

Furthermore, Brian Cooksey highlighted the perspectives of the review and how it was conducted and said that PCCB refused to endorse it citing security reasons which made it difficult to acquire accurate data.

Cooksey stated that due to the efforts and strategy of Policy Forum with continued engagements with PCCB, it somehow provided a way for the study to be completed.

The exception—the arrest in June 2017 of the principals in the Escrow/IPTL scandal—was a clear break with PCCB’s past record of protecting some of the most corrupt elements in the country. Still there is a growing log-jam of high-profile cases that have yet to be brought to court

Presenting on the Legal perspective, Fundikila Wazambi from LHRC said cases are heard in magistrates, district and high courts, and since 2016 there has been a High Court Division dealing exclusively with corruption.

“While corruption is prosecuted under the 2007 Prevention and Combating of Corruption Act (PCCA), the Bureau can also prosecute under the Public Procurement Act, and the National Audit Office (NAOT) provides the Bureau with information on district councils or development projects that are suspected of corruption. Parliament’s oversight role is minimal; the Bureau’s voted budget is not known in detail, and actual expenditure even less so. There have been repeated demands in parliament to review the 2007 legislation to make fines and sentences better reflect the seriousness of the crime,” he added.

Wazambi continued by saying that it has become increasingly evident that PCCB lacks adequate numbers of skilled lawyers and financial resources to investigate and prosecute complex corruption cases, most of which involve an international dimension.

“Bringing cases to court is also problematic. Witnesses can be bought off or threatened and are known to contradict their sworn statements in court.107 Judges sometimes recuse themselves from hearing ‘sensitive’ cases. The few high-profile corruption cases that reach court routinely drag on with constant adjournments and an excess of technical over substantive procedures.  The result is a slow and inefficient criminal justice system in which justice is rarely done or seen to be done. Inadequate staff and finance and low technical capacity in PCCB are part of a much bigger malaise affecting the entire judiciary,” he said.

Wazambi also stressed that punishing a few ‘minnows’ for petty corruption with disproportionate fines and prison sentences, while letting the ‘sharks’ get away with systematic looting, imposing trivial fines on the rare occasions that some of them are found guilty, but not confiscating property or handing out substantial jail sentences, arguably amounts to an abuse of human rights

The backlog of cases yet to be brought to court is growing steadily as more investigations are ordered by President Magufuli’s government.  The number of corruption cases brought to court is a small fraction of the cases reported and investigated, and the number of convictions is remarkably low,” Wazambi said.

Bahame T. Nyanduga from the Mwl. Nyerere Foundation cited the TANU Constitution “Rushwa ni Adui wa Haki, Sitatoa wala Kupokea Rushwa” and then stressed that for over 60 years we have been fighting corruption but still we cannot discuss it FREELY.

Nyanduga correspondingly highlighted the Corruption Perception Index 2017 conducted by Transparency International, Tanzania  was listed 103 with the score of 36 forming a tie with Bahrain, Ivory Coast and Mongolia.

Moroever, Mr. Bahame, the main presenters and others came up with recommendations to improve the situation regarding corruption in Tanzania:


  • The government should encourage free speech regarding Corruption
  • Pursuing individual cases of corruption on an ad hoc basis across the country is akin to swotting mosquitos in a room where all the doors and windows have been left open.  The few cases of (mostly petty) corruption prosecutes successfully cannot be considered a deterrent to corruption. It is worth repeating that corruption is a structural issue, not one of individual moral turpitude, and as such can only be addressed by structural change.
  • The anti-corruption model adopted by the Government  of Tanzania is based on  false assumptions concerning the nature of ‘corruption’ and therefore the best means to control and combat it;
  •  Systemic corruption can only be addressed through collective action, involving multiple agents, not by a stand-alone agent of state power.
  • Initiate  a broad-based public debate on alternative approaches to corruption prevention and control from value-for-money, governance and human rights perspectives.


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