Macro - Country Economic Forecasts - Netherlands

The US aid freeze, effective from January 25, has disrupted over 60 non-governmental organisations operating in Tanzania's critical sectors such as healthcare and agriculture. The 90-day halt has raised concerns about the long-term repercussions, as many essential services rely heavily on foreign support to sustain their operations. In the 2023/24 fiscal year, Tanzania was the second-largest recipient of USAID health funding in Africa ($337m) while ranking 10th in overall USAID funding received ($455m), underscoring the significance of this funding. While the government and its partners are working to retain the supply of key goods like medicine, the freeze has disrupted operations, risking medicine shortages, service closures, and reduced agricultural productivity. A permanent freeze in funding could lead to a widening in the country's fiscal deficit or a rise in borrowing.