The International Monetary Fund (IMF) on Monday announced it has approved the first review of Tanzania’s three-year extended credit facility, reported Reuters. It has ordered immediate disbursement of about $153 million in budgetary support to the country.
The IMF said the economic reform program is working effectively in Tanzania’s economic environment. However, the body said that Tanzanian authorities need to take steps to boost domestic revenues and boost structural reforms to streamline bureaucracy and tackle corruption.
The monetary body said the now-approved financial support brings total disbursements under the $1.04 billion loan arrangement approved for Tanzania last year to about $305 million.
IMF Deputy Managing Director Antoinette Sayeh said the decision was taken after accessing the strong performance of the economic reform program in Tanzania. She said the program’s quantitative performance and indicative targets which were set for December 2022 were found to be satisfactorily fulfilled, and two of the three structural targets were also completed right on time.
The IMF official said that the steps undertaken to increase domestic revenue mobilization and improve spending efficiency would help in financing priority investment and social spending in Tanzania while safeguarding debt sustainability at the same time.
She said that it is important to improve public finance management and the working of state-owned enterprises to contain fiscal risks. She added that the Tanzanian authorities should clear all domestic arrears and prevent the accumulation of new ones by strengthening cash management and commitment controls.
Sayeh said Tanzania’s risk of debt distress remains moderate, but the government must continue prioritizing low-interest financing and ensure that risks from potential liabilities were well-contained.
Notably, Tanzania had an average growth rate of 6-7% over the last decade, despite a decline in the growth rate recorded in the COVID-19 pandemic years of 2021-2022. In 2022, the country’s growth rate was around 4.6%.
