DAR ES SALAAM (Reuters) -Tanzania's budget spending will increase by about 12% next fiscal year to roughly 56.5 trillion Tanzanian shillings ($22 billion), driven by efforts to complete flagship infrastructure projects, Finance Minister Mwigulu Nchemba said on Thursday.
The government plans external borrowing of 8.7 trillion shillings and domestic borrowing of 6.3 trillion shillings in the fiscal year starting in July, Nchemba told parliament.
President Samia Suluhu Hassan's administration is pushing ahead with projects including a 2,560-km (1,590-mile) railway network ahead of elections due in October.
Hassan, who assumed office in 2021 following the death of her predecessor John Magufuli, has confirmed she will seek another presidential term.
Nchemba said the East African nation's budget had been affected by the shifting policies of development partners including the United States. Washington drastically cut its aid spending on programmes worldwide earlier this year.
Planning and Investments Minister Kitila Mkumbo said economic growth was seen rising to 6% in 2025, up from 5.5% last year, helped by the start of electricity generation at the Julius Nyerere hydropower dam.
The budget deficit is seen at 3.0% of gross domestic product in 2025/26, down from 3.4% of GDP this year, Mkumbo added.
($1 = 2,560.0000 Tanzanian shillings)
(Reporting by Nuzulack Dausen;Writing by George Obulutsa; Editing by Hereward Holland and Alexander Winning)
