The main aim of this paper is to analyze Tanzania's educational policy. Its starting point is an examination of the strong interrelationship between the country's educational policy and its social and economic objectives. How the educational policy has been implemented, how the various levels and types of education have developed, and what the trends of expenditure and costs have been are presented. An attempt is made to see how the educational system might evolve on the basis of its own dynamic, on the basis of changes being contemplated at present, and on the basis of the government's long-term objectives. Finally, the effect of this development on costs and expenditures is assessed. At present all educational expenditures are financed by the central budget. The increase in educational expenditures will, therefore, depend largely on the trends of public revenue and on the allocation of public resources to the various functions of the state. (Author/IRT)