IMF Approves $1 Bln Funding to Support Reforms in Tanzania

The International Monetary Fund (IMF) has approved funding totaling $935.6 million to support economic reforms and combat climate change in Tanzania.

The funding package includes a $786.2 million loan under the Resilience and Sustainability Facility, to be disbursed over 23 months, and an additional $149.4 million loan tranche under the Extended Credit Facility agreement, signed between Tanzania and the IMF in July 2022.

The IMF statement highlighted that Tanzania has made significant progress in implementing reforms associated with the funding program despite the challenging global economic environment.

The progress includes meeting two of the three structural benchmarks by the end of December 2023 and one structural benchmark by the end of January 2024, demonstrating the Tanzanian authorities' commitment.

The IMF welcomed the reduction in the current account deficit and the rebound in economic growth.

It emphasized that Tanzania's short-term priorities include enabling exchange rate flexibility and implementing fiscal adjustment measures outlined in the budget while maintaining a focus on social spending.

The Resilience and Sustainability Facility, launched by the IMF over two years ago, aims to support low- and middle-income countries in undertaking macroeconomically impactful policy reforms.

These reforms are associated with climate change, pandemic preparedness, and enhancing financial buffers to mitigate risks from longer-term structural challenges.

This substantial financial support is expected to bolster Tanzania's efforts in addressing climate change and sustaining economic growth, providing a robust foundation for future development.