By Evans Exaud

Tanzania stands at a critical crossroads. Earlier, the Minister of Foreign Affairs reassured the nation that the European Parliament’s decision to cut funding for strategic investment projects will not leave Tanzanians starving. Yet reassurance alone is insufficient. What Tanzanians need now are smart, actionable policies that protect businesses, promote growth, and ensure prosperity.

The pressing question is whether Tanzania has strategies to offset this reduction in external support. Between 2014 and 2024, the EU disbursed over €500 million to Tanzania for strategic sectors such as infrastructure, agriculture, energy, and private sector development. Without clear fiscal planning, local businesses could face higher taxes to cover budget gaps, and citizens remain uncertain about how public spending will be adjusted.

Critical sectors such as tourism, agriculture, and manufacturing are central to sustaining the economy. Tourism alone contributes approximately 3.7% of GDP and employs over 500,000 people directly, but faced significant disruptions on October 29, 2025, during national elections, when demonstrations and heightened security concerns affected visitor arrivals. Agriculture contributes around 24% of GDP and employs more than 65% of the population, yet only 23% of Tanzania’s 44 million hectares of arable land is currently under cultivation. Manufacturing, contributing roughly 28% of GDP, remains heavily dependent on agricultural inputs and requires targeted policies and investment to grow. The performance of these sectors will determine how well Tanzania weathers reduced external funding.

Tanzania’s wealth lies not only in natural resources, including gold, natural gas, and minerals worth billions of dollars annually, but also in its human capital and strategic geographic position as a gateway to East Africa. Maximizing this potential requires policies that encourage investment, entrepreneurship, and innovation while ensuring businesses are not overburdened by taxes. The recently launched development blueprint, Dira ya Maendeleo, provides a roadmap for economic growth, but it remains to be seen whether it can bridge the gap left by external funding cuts and continue to attract investment.

In conclusion, Tanzanians can remain cautiously optimistic. The country’s ability to leverage its resources, strengthen key economic sectors, and implement clear, credible fiscal policies will determine whether sustainable and inclusive growth is achievable. Reduced international support is a challenge, but Tanzania’s long-term prosperity hinges on resilient domestic planning, strategic economic management, and the ability to transform potential into measurable results.