Tanzania government vows to tame illicit financial flows, defends economic progress

Dar es Salaam. The government and ruling party leaders have reaffirmed their commitment to curbing illicit financial flows (IFFs) and building a skilled workforce, while defending the country’s economic progress under President Samia Suluhu Hassan’s administration.

Speaking during a Cafetalk Tanzania session, an emerging public forum for dialogue among journalists, citizens and policymakers, officials and political leaders from across the spectrum engaged in a robust discussion on governance, economy, and reform.

The CCM Elders’ Wing chairman, Mr Ally Hapi, said Tanzania loses nearly $1.83 billion annually through illicit financial flows. He outlined government efforts to strengthen oversight institutions and embrace digital technology to tackle this challenge.

“We have expanded e-government and cashless systems to reduce human contact in service delivery,” Mr Hapi said. He cited the upgrade of mobile money platforms like M-Pesa, Airtel Money, and Mix by Yass as key tools for improving transaction traceability.

He also spoke of the role of institutions such as the Prevention and Combating of Corruption Bureau (PCCB) and the introduction of card-based fare payments on the Bus Rapid Transit (BRT) system as examples of technological interventions aimed at enhancing transparency.

While affirming that Tanzania already has strong legal frameworks, including the Anti-Money Laundering Act, Mr Hapi emphasised the need for enforcement. “Laws don’t implement themselves. Institutions do,” he said, calling for stronger cybercrime units, independent investigations, and audits in the judiciary.

Responding to criticism that growth hasn’t sufficiently alleviated poverty, Public-Private Partnership Centre (PPPC) Executive Director David Kafulila said the sixth-phase administration has focused on tackling the structural bottlenecks that constrain inclusive development.

Quoting research by local think tank REPOA, Mr Kafulila said that halving poverty in Tanzania would require agriculture to grow at 10 percent annually for three years. “When President Samia took office in 2021, agriculture was growing at 2.6 percent. It is now at 4.2 percent,” he said.

He noted that irrigation had expanded from 560,000 hectares in 2021 to over 900,000 hectares, with a target of 1.2 million hectares within the next few years.

“In the 60 before 2021, only 500,000 hectares were developed. But 400,000 hectares have been added in just four years,” he said, calling the gains “transformational.”

He also noted the rise in fertiliser subsidies, over Sh700 billion, has increased application from 19 to 24 kilogrammes per hectare, further boosting yields. Trade performance was also improving. “Tanzania’s trade value has grown from $17 billion in 2021 to over $32 billion today, an 84 percent increase,” he said.

Rejecting claims that economic data is manipulated to attract donor funds, Mr Kafulila pointed to Tanzania’s sovereign credit ratings issued by global agencies such as Fitch, Moody’s, and Standard & Poor’s. “These agencies rate all major economies. Tanzania cannot influence their verdicts,” he said.

He also said access to key services tells the true story of economic progress. “Over 2,000 villages have been electrified in three years. Emergency hospitals have increased from seven to 117,” he added.

The Rural and Urban Roads Agency (Tarura) budget, he said, had risen from Sh260 billion to Sh1.06 trillion, further improving access and reducing poverty linked to service costs.

On skills development, Mr Kafulila said curriculum reforms are being introduced to match training with job market needs.

He said countries like Brazil, Argentina and Paraguay have achieved workforce productivity gains through closer cooperation between academia, industry and government.

“Human capital is a pillar in the Vision 2025–2050 strategy. Strengthening it will make other development challenges easier to tackle,” he said, referencing a 2014 Oxford study that found 62 percent of the wealth of top economies came from human capital.

Good gains, but gaps remain

Opposition parties also weighed in on the discussion. Chaumma Secretary General Salumu Mwalimu acknowledged positive economic gains, including a 5.6 percent growth rate and a projected 6.1 percent.

But he said many Tanzanians still live in extreme poverty, citing a recent UNCTAD report.

He advocated greater investment in agriculture and ICT to ensure inclusive growth.

“Of the 44 million hectares of arable land, less than one million is cultivated. That must change,” he said, proposing that up to 50 percent of the national budget go to agriculture.

He added that the youth must embrace innovation beyond traditional farming practices.

ACT-Wazalendo Vice Chairman (Mainland) Issihaka Mchinjita focused on the enforcement of laws. “Our problem is not lack of laws—it’s failure to implement them,” he said, questioning the effectiveness of institutions like the PCCB.

He cited former Controller and Auditor General Prof Mussa Assad’s 2019 revelation of Sh1.5 trillion in unaccounted funds, claiming it led to his marginalisation instead of action.

He also pointed to the March 2025 CAG report which showed that Sh389 billion was disbursed to 12 government entities outside the official budget. “Who approved this? Who has been held accountable?” he asked.

“When people can’t demand accountability, public trust in government erodes,” he said. “The challenge is not in making laws but enforcing them fairly and consistently.”