The IMF and Tanzanian authorities have reached staff-level settlement on the fifth assessment beneath the Prolonged Credit score Facility (ECF) and the second assessment beneath the Resilience and Sustainability Facility (RSF). As soon as authorised by the IMF Government Board, Tanzania will achieve entry to US$441 million in financing.Tanzania’s financial outlook is favorable, with sturdy progress, low inflation, an improved present account, and elevated overseas trade liquidity. In FY25/26, well-balanced public income measures are anticipated to keep up fiscal and debt sustainability, whereas safeguarding precedence social spending.Persevering with implementation of local weather adaptation and mitigation insurance policies, supported by the RSF, will assist strengthen resilience to climate-related dangers.
A employees workforce from the Worldwide Financial Fund (IMF) led by Mr. Nicolas Blancher, visited Tanzania throughout April 2-17, 2025, and held discussions on the 2025 Article IV session, the fifth assessment beneath the Prolonged Credit score Facility (ECF), and the second assessment beneath the Resilience and Sustainability Facility (RSF). Topic to approval by the IMF Government Board, the opinions will make obtainable SDR 326.47 million (about US$440.8 million), bringing the entire IMF monetary assist beneath the ECF association to SDR 682.21 million (about US$907.4 million), and SDR 255.72 million (about US$343.6 million) beneath the RSF.
On the conclusion of the mission, Mr. Blancher issued the next assertion:
“I’m happy to announce that the IMF workforce and the Tanzanian authorities have reached a staff-level settlement on the insurance policies wanted to finish the fifth assessment beneath Tanzania’s ECF-supported program, and the second assessment of the RSF association. The IMF’s Government Board will focus on these opinions within the coming weeks.
“Tanzania’s financial exercise has been robust, with actual GDP progress reaching 5.5 p.c in 2024 and projected to extend to six p.c in 2025. Inflation, at 3.3 p.c in March (yoy), has remained subdued and under the Financial institution of Tanzania (BoT) goal of 5 p.c. Whereas the financial outlook is favorable, dangers are tilted to the draw back. The exterior surroundings is unsure, with dangers from a slowdown within the international financial system and commerce, geoeconomic fragmentation, additional intensification of the battle within the DR Congo, and lowered overseas growth help. On the home entrance, the upcoming nationwide elections might improve dangers of fiscal pressures or, extra broadly, reform slowdown.
“Fiscal consolidation is predicted to pause in FY24/25 with the adoption of a supplementary funds in February 2025 geared toward growing public spending by about 0.4 p.c of GDP relative to the preliminary funds, via increased expenditures on schooling and well being, clearance of home arrears, and different precedence areas. Will probably be important to renew growth-friendly fiscal consolidation in FY25/26 to protect debt sustainability and rebuild fiscal area, particularly in mild of urgent social spending wants. To this impact, the authorities are dedicated to lowering the home main deficit by 0.4 share factors of GDP to 0.8 p.c in FY25/26 via income measures yielding 0.9 p.c of GDP, whereas safeguarding precedence social spending at 7.1 p.c of GDP.
“With inflation remaining under the BoT’s 5 p.c goal sustaining the CBR at 6 p.c, a stage which the mission considers to be impartial or mildly stimulatory, will assist protect value stability within the interval forward. It’s going to even be necessary to proceed permitting trade price flexibility and conducting FX interventions in keeping with the BoT’s FX intervention coverage. Elevated tolerance for trade price flexibility, along with reforms to enhance the functioning of the overseas trade market, have been profitable in bringing again FX flows into the formal market, growing its liquidity and lowering the parallel market premium.
“The present account deficit is estimated to have narrowed to 2.6 p.c of GDP in CY2024, from 3.8 p.c of GDP in CY2023. This was pushed by robust exports of minerals and agricultural merchandise, in addition to document vacationer arrivals, in opposition to a average improve in imports of capital items and declining oil imports. In 2025, excessive gold costs are anticipated to assist the export momentum and assist additional scale back the present account deficit. Gross worldwide reserves stood at an enough stage of US$5.7 billion (about 3.8 months of imports) in March 2025.”
“Within the context of the Article IV session, the mission was additionally a chance to debate longer-term prospects for the Tanzanian financial system with a variety of presidency and different counterparts. To fulfill the formidable targets specified by the Tanzania Imaginative and prescient 2050, it will likely be important to make sure that enough assets are devoted to the schooling and well being of a younger and quickly rising inhabitants, and to create an enabling surroundings for personal sector-led progress and job creation. Particularly, additional efforts to enhance the provision and entry to finance, streamline enterprise laws, and strengthen judicial and anti-corruption establishments, are key structural reform priorities.
“Persevering with the implementation of local weather reforms, supported by the RSF, will improve local weather resilience and sustainability. The federal government has already began to strengthen the institutional framework for local weather insurance policies and public funding administration in keeping with local weather dangers. Accelerating implementation of RSF reforms with technical and monetary help from the IMF, the World Financial institution and different growth companions, will assist construct resilience and catalyze assist for the local weather agenda in Tanzania.
“The mission met with Minister of Finance, Dr. Mwigulu Nchemba, Financial institution of Tanzania Governor, Mr. Emmanuel Tutuba, different senior officers, growth companions, non-public sector representatives, and civil society organizations. The IMF workforce wish to thank the Tanzanian authorities and different counterparts for his or her hospitality, and the candid and productive discussions.”
Distributed by APO Group on behalf of Worldwide Financial Fund (IMF).
