The International Monetary Fund (IMF) has approved an Extended Credit Facility amounting to $1.071 billion to help Tanzania’s post-COVID-19 recovery efforts.
IMF says the medium-term programme is expected to help Tanzania cope with spillovers from the war in Ukraine, preserving macroeconomic stability, and advancing the structural reform agenda toward sustainable and inclusive growth.
The funding will further support Tanzania in mobilizing domestic revenue in order to avail finances for human capital and increase spending on social programmes.
Additionally, the funding is backed to stimulate private sector investment, boost structural reforms and strengthen financial deepening stability.
“The program’s fiscal policy will focus on enhancing growth while maintaining fiscal and debt sustainability. Key priorities include increasing domestic revenues to create fiscal space through credible medium-term revenue mobilization plans and a comprehensive revenue strategy,” says Charalambos Tsangarides who lead the IMF staff team in a meeting with the country’s authorities.
IMF says the country’s fiscal situation has also been affected through a large reduction of tax revenue, turning the overall balance to a deficit of about 3.9pc of GDP in FY2020/21, while the current account deficit widened to 3% in 2021.
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