WASHINGTON— The International Monetary Fund (IMF) has approved a 40-month $1.04 billion credit facility to Tanzania to catalyze growth and withstand spillover effects from the war in Ukraine.
Following the approval by the IMF Executive Board Monday, the East African country will receive an immediate release of $151.7 million as part of the Extended Credit Facility (ECF).
Tanzania had already accessed an emergency support from the lender amounting to $561.5 million last year.
The loan is further expected to help Tanzania sail through the spillover effects as a result of the war in Ukraine after COVID-19 pandemic.
Additionally, the loan will support Tanzania preserve macroeconomic stability, and advance the structural reform agenda toward sustainable and inclusive growth.
Though the lender lauded the country’s COVID-19 response and measures rolled out to mitigate adverse effects of the war in Eastern Europe, it said there are still considerable development and reform challenges and external headwinds which risk eroding hard-won economic gains.
“Against this backdrop and recognizing Tanzania’s strong track record in reform implementation, Directors supported the authorities’ requests for an ECF arrangement to meet pressing financing needs. They underscored that the Fund supported program would help catalyze additional external financing, support a gradual recovery while increasing social and development spending, and anchor the country’s National Development Plan. Directors also noted the importance of scaling up vaccination efforts,” said Bo Li, IMF Deputy Managing Director.
IMF also welcomed the authorities’ commitment to rebalance expenditure towards social spending and improve its efficiency and execution.
Source: NAM NEWS NETWORK