Tanzania Introduces New Funding System, Unlocks 330bn/- for Road Development

The Tanzanian government has introduced a new funding arrangement that has unlocked over 330bn/- for road development projects within the first month of implementation. This new system, which began in the 2026/27 financial year, allows for direct transfers of designated road and fuel toll revenues to the Road Fund and other infrastructure agencies. This change aims to reduce reliance on the central government financing system and improve the flow of resources to road infrastructure projects.

Under the new framework, 70 per cent of specified road and fuel toll collections will go to the Road Fund and Tanzania Rural and Urban Roads Agency (TARURA). Additionally, 25 per cent will be allocated to the Consolidated Fund, while five per cent will be set aside for a special account supporting infrastructure for special economic and export processing zones. This reform is intended to improve fund availability, minimize administrative delays, and ensure more predictable financing for road development and maintenance.

Prime Minister Dr Mwigulu Nchemba announced that the new arrangement has already shown positive results, with over 330bn/- deposited into the Road Fund within a month. He made this statement while addressing residents at Mwanhuzi Bus Stand in Bomani Village, Meatu District, Simiyu Region. The Prime Minister emphasized that the government has identified three priority areas for the funds: rehabilitating economically critical roads, facilitating the return of contractors who suspended work due to delayed payments, and providing advance payments to contractors awaiting project commencement.

The new funding approach aims to address longstanding challenges affecting road infrastructure development, particularly delayed payments that have disrupted construction projects. Dr Nchemba mentioned specific projects that will benefit from the new funding system. For instance, the contractor undertaking the 65-kilometre Nkoma–Lalago road will receive an advance payment to commence upgrading works to bitumen standard.

In addition to road development, Dr Nchemba directed the Minister for Works, Mr Masanja Kadogosa, to expedite the design of a road connecting Simiyu and Singida regions through Meatu and Iramba districts. This will enable its inclusion in the next financial year’s budget. The Prime Minister also addressed healthcare services, warning health workers against charging children under five for medical treatment.

Dr Nchemba stressed that government guidelines provide for free healthcare services for children under five and directed health workers to give immediate attention to pregnant women arriving at health facilities in labour. He also condemned the practice of requiring families of patients in need of emergency referrals to contribute money for fuel before ambulances can transport them to referral hospitals.

The Prime Minister's directives aim to improve healthcare services and ensure that citizens receive timely and necessary medical attention. The new funding system for road development is expected to have a positive impact on the country's infrastructure and economy. Key aspects of the new funding system include improved fund allocation, reduced administrative delays, and enhanced predictability for road development and maintenance.

Key points

• The Tanzanian government has introduced a new funding system that channels 330bn/- into the Road Fund within a month to improve road infrastructure projects.
• The new system allocates 70 per cent of specified road and fuel toll collections to the Road Fund and TARURA.
• The reform aims to improve fund availability, minimize administrative delays, and ensure more predictable financing for road development and maintenance.