Presenting its opinion on the 2025/2026 national budget estimates before august House, the committee acknowledged the contributions made by the two institutions but noted that both remain undercapitalised and constrained in their ability to fulfil their strategic mandates.
TADB, which was established in 2015 to stimulate the agricultural sector through short, medium and long-term lending, has a capital amounting to 924bn/-.
Budget Committee Chairperson Oran Njeza, informed the House that TADB has so far disbursed loans worth 971.89bn/-. The loans, he said, have benefitted more than 1.94 million farmers and supported 686 businesses, including 478 sustainable enterprises.
“However, unlike commercial banks, TADB does not mobilise deposits — a limitation that hinders its ability to expand loan offerings. To meet growing demand and fully realise its mission, the bank requires 2.95tri/-, leaving a significant shortfall of 2.026tri/-,” he said.
Mr Njeza added that TIB plays a key role in financing development projects that promote an inclusive, diversified and competitive economy, but has seen its financial performance deteriorate in recent years.
“TIB’s income has dropped sharply from 62.7bn/- in 2022 to 35.6bn/- in 2024, primarily due to reduced lending activities caused by insufficient capital,” said the chairperson of the Budget Committee.
He revealed that as of December 31st, 2024, the bank’s core capital stood at 90.226bn/-, well below the 200bn/- minimum required under the 2021 Development Financial Institutions Regulations set by the Bank of Tanzania.
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“Development banks in upper-middle-income countries typically hold capital equivalent to two per cent of their nation’s GDP. As Tanzania eyes that economic status, financial empowerment of our development banks is no longer optional — it is essential,” Mr Njeza stated.
The Budget Committee also called on the government to take urgent steps to boosting remittance inflows from the Tanzanian diaspora—an area seen as vital for both household welfare and national economic growth.
Mr Njeza underscored that diaspora remittances have become a crucial financial stream globally, contributing not only to individual livelihoods but also to macroeconomic stability through increased foreign currency reserves.
“In 2024, Tanzania received just 757 million US dollars in remittances, far below regional counterparts,” the Chairperson noted, revealing, “Kenya, for instance, recorded 4.4 billion US dollars in the same year—an amount that surpassed its earnings from coffee exports and tourism combined.” The Committee attributed this disparity largely to Kenya’s expanded use of digital financial services, which have made sending money quicker and more affordable.
The Committee urged the government to conduct a comprehensive study into how Tanzania could better leverage this financial resource.
“We must act swiftly to transform this underutilised income stream into a driver of inclusive development,” said Njeza.
The Budget Committee also warned against persistent structural barriers affecting the country’s business and investment environment. It cited an excess of regulatory bodies, overlapping taxes and levies, and widespread bureaucracy were cited as ongoing impediments that continue to discourage private sector participation and foreign direct investment.
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“These challenges have long been raised by stakeholders,” Njeza told the House, warning; “They make it harder for businesses to operate efficiently, particularly small and informal enterprises, which form the majority of the private sector.” Streamlining the business environment, the Budget Committee chairperson argued, would not only attract more investment but also encourage the formalisation of informal enterprises—expanding the country’s tax base and improving service delivery.
“By addressing these issues head-on, we can unlock the true potential of the private sector and build a more robust, inclusive economy,” he asserted.
