The International Monetary Fund’s July 2025 Staff Report on Tanzania’s program indicates that over 20,000 Tanzanians working directly and indirectly in the health sector will be affected by the USAID shutdown. Additionally, 30,000 health workers who received supplemental income through USAID support are also expected to be impacted.
“Most foreign assistance cuts have affected the health sector, both supplies and staff. For instance, USAID employed over 20,000 workers, both directly and indirectly (including CSO and community workers), mostly involved in HIV, malaria, family planning, and child health treatments. Another 30,000 health workers were paid by USAID to carry out additional activities beyond their official duties,” the report reads.
The IMF report highlights that Tanzania was among the largest recipients of USAID support in Sub-Saharan Africa, receiving USD 400 million, equivalent to about 0.5 percent of Tanzania’s GDP and accounting for approximately 40 percent of the country’s total health expenditure. The report estimates that around 0.2 percent of GDP per year in high-priority health spending will be affected by the funding cuts.
As part of its initial response to the USAID exit, the Tanzanian government adopted a supplementary budget in the second half of the 2024/25 financial year. According to the Ministry of Health, Tsh 93 billion was allocated to offset the anticipated budget shortfall.
“Through the coordination of the Prime Minister’s Office, we have conducted a comprehensive assessment. We have reviewed what we currently have, what we have ordered, and what we expect to receive. We have already put in place a strategic plan for the short term, medium term, and long term,” Tanzania’s Minister of Health, Jenista Mhagama, told reporters on April 25, 2025, regarding the USAID exit.
“For malaria medications and diagnostic supplies, we have enough stock to last until February 2026. For other medications, such as HIV drugs and others, we have already taken action. As of now, we have sufficient supplies to last us until June,” she continued.
The Ministry also highlighted that it will also structure some of the roles which were supported by USAID programs to be under direct government budgetary support, an initiative that is done in coordination with the President’s Office, Public Service Management, and Good Governance’s
“We have already received funding from the government as part of our short-term plan. We have received 93 billion shillings from the government, and we have already placed orders for medicines for all other diseases that were previously funded by those projects,” Mhagama asserted.
In its 2025/26 budget, Tanzania introduced alternative domestic revenue sources to make up for the shortfall. Key sources include revenue from beer, electronic communication, fuel, minerals, betting, imported vehicles, and heavy machinery, as well as air and ticket transport. These revenues are earmarked to support HIV prevention and the Universal Health Fund.
The government anticipates collecting over Tsh 500 billion, of which 70 percent will be remitted to the AIDS Trust Fund, and 30 percent to the Universal Health Fund.
