Rewriting the Rules: Tanzania’s Vision for Just Financing in a Changing World

 Speaking at the Fourth International Conference on Financing for Development in Spain, Vice President Philip Mpango emphasised the need for urgent reforms to the global financial development funding systems to make them more equitable, predictable, sustainable, and aligned with the needs and priorities of developing countries. He stressed the importance of innovative financing approaches, including debt-for-development swaps, which redirect debt repayments towards critical projects such as environmental conservation. His message was clear: developing countries like Tanzania need fair, predictable, and inclusive financing, not charity, but a seat at the table. This global advocacy aligns directly with Tanzania’s national priorities, as the country seeks to reduce its reliance on external aid, expand its tax base, and invest in a more self-sustaining economy.

Why it Matters Now

Tanzania is at a critical juncture. In the 2025/26 budget, the government has set an ambitious domestic revenue target of TSh 34.1 trillion, with plans to fund 70% of its national budget from internal sources. Yet, the country still lags behind its East African peers in its tax-to-GDP ratio, which currently stands at 13.3%, well below the East African Community’s target of 25%.

While domestic reforms are ongoing, from digital taxation and VAT expansion to tightening tax exemptions, they alone cannot fill the financing gap. As concessional aid declines and debt obligations rise, Tanzania’s voice at global forums like FfD4 signals a strategic shift: building an economy that is both locally resilient and globally supported. But what would fairer financing mean for Tanzania?

Domestic Revenue Focus

This would require Tanzania to shift toward self-reliance in its domestic policies. This would require reforms that push for policies that formalise the informal sector, thereby expanding the tax base and, in turn, increasing revenue collection. Importantly, Tanzania is also taking steps to rationalise its tax incentive regime. The phasing out of 10-year tax holidays in Export Processing Zones (EPZs) and Special Economic Zones (SEZs), particularly for firms selling domestically, is expected to raise an additional TSh 75.9 billion. These bold moves demonstrate that the government is serious about closing fiscal leakages and reclaiming lost revenue. In addition, phasing out the numerous tax incentives would create great strides in reducing Tanzania’s reliance on foreign aid.

Access to Innovative Global Finance

Tanzania now qualifies for new and emerging tools such as green bonds, climate resilience funds, and debt-for-nature swaps. These mechanisms provide alternative pathways to development finance by harnessing the country’s rich natural capital and robust environmental policy frameworks. For example, a debt-for-nature swap could cancel portions of external debt in exchange for protecting high-value ecosystems, such as the Eastern Arc Mountains. Similarly, green bonds could fund renewable energy, sustainable agriculture, and climate-resilient infrastructure —areas already prioritised in Tanzania’s national development plans. This approach expands fiscal space without raising debt levels, aligning finance with climate resilience and sustainable growth.

Increased Regional and Global Leverage

Tanzania’s presence at FfD4 enhances its visibility as a thought leader in development finance, particularly given the limited representation of African countries at the high-level event. This global spotlight strengthens Tanzania’s diplomatic leverage to push for reforms that would benefit not just itself, but the broader region. Key advocacy areas include fairer trade terms, technology transfers, and reformed debt sustainability assessments that reflect the real economic capacity of developing nations. Tanzania is also well-positioned, through its roles in the EAC and AfCFTA, to lead Africa’s charge for a fairer global financial order.

Strengthened SDG Agenda

Tanzania’s development strategy is closely aligned with the Sustainable Development Goals (SDGs), with the country achieving around 60% of its targets as of 2024. This performance boosts policy credibility and strengthens Tanzania’s position in securing co-financing, concessional loans, and climate adaptation funds. Global financiers are increasingly focused on results. By aligning fiscal reforms with SDG progress, Tanzania is signalling that financing should follow where progress is already being made.

In conclusion, Tanzania’s demand for fairer financing is not rhetorical; it’s a fiscal necessity. The country is implementing difficult but necessary reforms, including the digitisation of tax systems and the formalisation of the informal economy. But no nation can go it alone. As global financing rules evolve, Tanzania must not only adapt but also shape the new development landscape. Fairer, more inclusive financial systems would not only stabilise the country’s fiscal outlook but also accelerate its journey toward Vision 2050, a future defined by resilience, inclusion, and economic sovereignty.