Fuel levy reforms boost Road Fund collections

DAR ES SALAAM: THE Road Fund has received over 70bn/- in July, the first month of implementing new fuel-levy collection reforms, while the Tanzania National Roads Agency (TANROADS) secured about 47bn/- in the same period for road projects across various regions.

Minister for Works Abdallah Ulega said in Dar es Salaam yesterday that early results showed that the reforms were improving the flow of funds to infrastructure agencies and helping address delays in contractor payments.

Speaking at the opening of a two-day Annual Consultative Meeting in Dar es Salaam, Mr Ulega said under the new arrangement, 70 per cent of fuel-levy collections is channelled directly to four funds, the Road Fund, Water Fund, Rural Energy Agency (REA) Fund and Railway Development Fund while the remaining 30 per cent goes to the Consolidated Fund.

“Following the legal changes, once the Tanzania Revenue Authority collects the fuel levy, 70 per cent is remitted directly to the respective funds. In the first month of implementation, July, more than 70bn/- was deposited into the Road Fund,” he said.

Mr Ulega noted that the arrangement has improved resource availability for infrastructure development, with TANROADS already receiving about 47bn/- for projects nationwide.

“Within this week, TANROADS has received approximately 47bn/-, which has been allocated to regions. Every region will benefit,” he said.

The development comes as the government rolls out its 2026/27 infrastructure priorities. The Ministry of Works has been allocated 2.564tri/- for the financial year, including 2.467tri/- for development expenditure. The budget also provides for 1.047tri/- in domestic development financing through the Road Fund, underlining its key role in supporting road infrastructure.

At the national level, the 2026/27 budget of 62.33tri/- prioritises strategic infrastructure such as roads, the Standard Gauge Railway, water and energy projects to drive economic growth.

Mr Ulega said the government is also addressing outstanding payments to contractors, noting that delays have affected project execution and service delivery.

He said the government has set aside 100bn/- monthly from the Consolidated Fund to clear contractor debts.

In July, the Treasury paid contractors 68bn/-, including 57bn/- disbursed earlier and an additional 11bn/-.

“Contractors, I assure you, what lies ahead is encouraging. These steps will ease payment challenges and strengthen project implementation,” he said.

The minister urged contractors to uphold quality, professionalism and ethical standards, stressing that public investment must deliver value to citizens.

He also directed the Contractors Registration Board (CRB) to document resolutions from the meeting and submit them to the Ministry for implementation. Additionally, the Board was tasked with preparing a report on projects handled by young contractors to help the government track progress and address challenges.

CRB Registrar Engineer Rhoben Nkori said local contractors account for 97 per cent of registered firms but executed only 35 per cent of the total value of projects in the financial year ending July 2026.

In contrast, foreign contractors, who make up just three per cent, executed 66.3 per cent of the total project value.

Eng Nkori said CRB registered 5,452 projects worth 16.598tri/- during the year, alongside 1,336 new contractors, bringing the total number of active contractors to 12,872.

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He said the Board is strengthening local contractors through capacity building, joint ventures and riskbased inspections, while working with the government to resolve outstanding debts.

“We recognise the debt challenge facing contractors. The government is committed and is finalising a lasting solution to enable you to fully contribute to national infrastructure development,” he said.

Acting TANROADS Chief Executive Engineer Ephatar Mlavi, representing Works Permanent Secretary Ambassador Engineer Aisha Amour, said the 50/50 policy and principles of equality would expand opportunities for local contractors and professionals to participate in major projects.

He emphasised that infrastructure development remains central to economic growth, covering roads, railways, water, electricity and other strategic sectors. The meeting was held under the theme: “Dira 2050: Opportunities and Role for Contractors in the Development of Sustainable Infrastructure.”