President Samia Suluhu Hassan this week publicly admitted that the country's "battered" global image due to the political crisis over her disputed re-election last month, would make it harder to secure funding from international institutions, amid criticism by Western powers, including US senators and European Union legislators. This announcement seemed to have been meant to rally Tanzanians to brace for tough times as her new administration looks inward for sources of income to finance its budget, which this year rose 15 percent to $21.88 billion from $18.98 billion last year."Most of the time we depend on the outside. Loans from various international institutions, international banks, but what happened in our country has destroyed our image a little," the President said while swearing in her new Cabinet in Dodoma on Tuesday. "That might reduce our reputation to get those loans easier as we did in our first term.... the bad image we gave ourselves might take us back."Two days later Committees of the European Parliament formally objected to a plan by the European Commission to give Tanzania €156 million ($179.46 million) in development funds in 2026.
Read: Samia warns Tanzania’s battered image may hurt foreign fundingThe objection, raised by the Foreign Affairs and Development committees signals a political message to Dodoma about the EU's concerns regarding human rights, repression, and a lack of a level playing field during the recent election.
This came as the country continued to take in emerging evidence of killings of youth by security forces during anti-government demonstrations across the country and increasing quest for truth and justice.
On Thursday, the Tanzanian leader fulfilled a promise she made in her inauguration address to the 13th Parliament to constitute a team to look into the events around the election to find ways of resolving the political crisis.
She unveiled a nine-member “Independent Commission of Inquiry” to probe and make recommendations that she hopes to use to heal the acute legitimacy problem at both domestic and global levels.
Even then, financial and political analysts say Tanzania’s international image will impact its economic outlook in the next five years.“Tanzania’s image on the global stage has been badly damaged, and that will have economic consequences with global partners as well as regional trade where Kenyans might be a little more hesitant to invest. Kenya is one of the biggest markets for Tanzania’s products,” said Ken Gichinga, economist at Mentoria Economics.“That level of unrest could create a lot of tension moving forward. That youthful unrest could affect business operations, just like we saw in Kenya in June 2024. That violence witnessed in Tanzania could lead to lower collection of revenue. This would put them in a difficult position with their debt profile in terms of servicing and meeting their obligations. Expenditure is the same but, due to a weak revenue collection, the country could find itself in a fiscal deficit.”During the swearing-in of her new Cabinet on November 18, 2025, Samia urged them to find domestic funding sources to support development projects.
Tanzania has been dependent on external financing, with aid accounting for some 23 percent of government revenue in 2024, although this is declining.
Its GDP growth, projected by the World Bank to continue to reach 6.0 percent by the end of 2025 and remain around that level in 2026 -- driven by agriculture, manufacturing, tourism, and increased investment, alongside reforms to improve the business environment -- is now in jeopardy.
Tanzania planned to borrow $3.6 billion externally in the 2025/2026 fiscal year, with a portion already disbursed from past agreements.
Former Finance Minister Mwigulu Nchemba, now Prime Minister, is tasked with leading the implementation of his $21 billion budget and will have to relook at what he presented in June 2025.
Read: Mwigulu Nchemba, Samia’s new right-hand manThe EU has come out as the first donor to push for funding cuts to Tanzania, already reeling from the US cuts and increased trade tariffs after Donald Trump came into power.
On Thursday, by a joint vote in the European Parliament Committee on Foreign Affairs and the European Parliament Committee on Development, legislators overwhelmingly adopted the objection to the European Commission’s plan under the Neighbourhood, Development and International Cooperation Instrument (NDICI-Global Europe) Regulation, with a vote of 53 in favour, two against, and one abstention.“This is a clear political signal that the EU cannot proceed on the basis of documents that ignore repression, fraudulent elections and the government’s authoritarian rule,” said David McAllister, chairman of the AFET committee, following the vote.
Even though the EU Parliament’s committees have a right of scrutiny and objection, for the objection to formally halt funding, it must be ratified by a majority of the full Parliament’s members (353 Meps) within two months.
This means that while the initial committee vote reflects serious displeasure and raises the diplomatic stakes, the commission is not yet legally prevented from moving forward, granting Samia some time to breathe and get her house in order.
Dodoma, meanwhile, has secured a 40-month Extended Credit Facility and a 23-month Resilience and Sustainability Facility from the IMF. But with the US now focused on the happenings in the country, there could be hurdles.
US Senators Jeanne Shaheen and Jim Risch, high-ranking members of the Foreign Relations Committee, on November 17 called for a review of bilateral relations, accusing the Tanzanian government of political repression.
In a joint statement, Risch and Shaheen said: "Tanzania’s election was decided well before October 29. In response to these less-than-credible elections, Tanzanians took to the streets to display their deep frustration and anger.
Unfortunately, instead of heeding calls for reforms and electoral transparency, the Government of Tanzania’s heavy-handed security response resulted in the death of hundreds."Read: Samia wins the vote: Her options to win the hearts of TanzaniansThe senators criticised Samia’s administration for internet shutdown, which they say disrupted business operations and limited communications in the country, and the ruling Chama Cha Mapinduzi for creating an environment of fear that challenges the security of the country and its neighbours.
The two have filed a petition seeking the reassessment of America's bilateral relations with Tanzania, saying, “For decades, the US-Tanzania relationship has been built on shared democratic values, global security, economic prosperity and strategic investment.
Tanzania’s continued pivot from the rule of law, reform and good governance demands a genuine assessment of the US bilateral relationship with Tanzania.”The country is now facing downside risks, including global uncertainty, climate-related disruptions to agriculture, fiscal pressures from rising debt service, and limited access to concessional financing that is crucial to its funding needs.
The challenges in securing future funding will see Tanzania borrow more internally, and this comes with its problems – from crowding out local businesses and households from the credit market to weakening the local currency.“That could force her (Samia) to look inward and start borrowing more, which would lead interests rates to go up and make borrowing costs higher and business promises to the private sector become less and less.
That is a cycle and it means unemployment increases fuelling more unrest. It can be a vicious cycle that can ruin many businesses in Tanzania,” Mr Gichinga said.
Coming from an election that, according to the government, was funded from local resources, the new Finance Minister, Khamis Mussa Omar, will have to work hard to plug the hole this has created but also find new ways of raising revenues.
Until 2020, all of Tanzania's multiparty elections were partly supported by development partners. But, in line with the then President John Magufuli's more inward-looking policies, this donor dependency was abandoned for the 2020 election, a policy Samia adopted this year.
Dr Nchemba said the government had spent Tsh741.5 billion ($287.2 million) on 2025 election preparations during the last fiscal year, an indication that the total cost of the exercise could exceed Tsh1 trillion ($387 million) or even double the amount.
This is likely to raise inflation, consumer prices and more despondency against an administration suffering a legitimacy crisis.
From Dr Nchemba’s June figures, the Tanzania Revenue Authority (TRA) has a Tsh34.1 trillion ($13.2 billion) collections target. The remaining 28.4 percent is expected to be obtained through domestic loans and external grants, but most of it was to be channelled to specific development projects sponsored by the lenders.
According to the 2025/2026 budget frame, there are only nine Basket Fund contributors this time round: The World Bank, Canada, Denmark, Britain, Ireland, Switzerland, Koica, UNFPA and Unicef. The International Monetary Fund and European Union are the only two lenders expected to cover the general budget support component.
Now, uncertainty shrouds some of this funding and the new administration is still faced with a national debt stock of $772.4 million, as at the end of September 2025, 1.4 percent higher than the stock at the end of the preceding month.
Read: Tanzania’s Vision 2050 targets $1trn GDP growth - The EastAfricanExternal debt service payments totalled $130.6 million, of which $75.3 million was for principal repayments.
As at the end of September 2025, domestic debt amounted to Tsh37,459 billion ($15.33 billion), a 0.9 percent increase from the preceding month attributed to net issuance of Treasury bonds.
Mr Gichinga says the focus on the new Ministry of the Youth, which President Samia hopes to use to placate an angry Gen Z, throws focus on the Central Bank and its monetary policy, to show how strong it is. It remains to be seen if the Bank of Tanzania will adjust the Central Bank Rate, currently at 5.75 percent.
Meanwhile, the Tanzanian shilling has started gaining against the US dollar, exchanging at 2411.3 to the greenback on Friday, compared to 2429.1 a week before. The Dar es Salaam Stock Exchange remained stable.
Civil society pressureSamia continues to face pressure from civil society organisations especially in Kenya, who have been relentless in lobbying regional bodies such as the African Union (AU) and the East African Community (EAC) to invoke protocols on good governance and human rights and hold Tanzanian President Samia’s government accountable for what happened on October 29.
Read: AU condemns Tanzania elections as undemocratic, urges reforms“During our East African Law Society meeting in Arusha president Samia called for dialogue. She should put into place mechanisms or a system whereby you bring in both members of opposition as well as those in government and independent observers both from the AU to either be mediators in the process,” said Faith Odhiambo, president of the Law Society of Kenya.“She could bring in SADC to ensure that all the challenges that have been raised, including what can change in the electoral process, how to ensure electoral malpractices are dealt with before elections can be pronounced, and also changes in the judicial system to ensure that you can challenge any presidential election based on the malpractices that have been raised.”Even South Africa’s African National Congress (ANC), a staunch CCM ally, confirmed it could not observe the polls due to a “breakdown in communications.” Provided by zaianews. (zaianews.com).