The International Monetary Fund’s (IMF) board approved a $1.05 billion extended credit facility for Tanzania and plans to disburse $151.7 million immediately.
The 40-month package will assist with economic recovery and help address the repercussions of Russia’s invasion of Ukraine on the East African nation. The financing will also help enhance macro-economic stability and underpin structural reforms, the Washington-based lender said Monday in an emailed statement.
“IMF financial support is also expected to help stimulate private-sector investment and catalyze financial support from development partners,” according to the statement.
The IMF said that the spillover from Ukraine is stalling Tanzania’s recovery from the coronavirus pandemic and is exacerbating the nation’s challenges. Authorities forecast the economy will expand by 4.7% this year, compared with 4.9% in 2021 and 4.8% in 2020.
Tanzania plans to borrow 5.78 trillion shillings ($2.49 billion) from the domestic market, 3.03 trillion shillings from non-concessional sources, and 4.65 trillion shillings in grants and concessional loans this fiscal year, Finance and Planning Minister Mwigulu Nchemba said in June.
The project announced on Monday, which is part of the Extended Credit Facility (ECF), should help finance reforms improve Tanzania’s financial stability, carry out public investments and support the private sector.
“Recognizing Tanzania’s strong track record in reform implementation, directors supported the authorities’ requests for an ECF arrangement to meet pressing financing needs,” said Bo Li, an IMF official quoted in the statement.
Among other objectives, he also mentioned the importance of continuing vaccination campaigns on a larger scale.
Read also; IMF Approves $1.1 Billion to Support Tanzania’s Economic Recovery Efforts.
