The International Monetary Fund (IMF) Executive Board has concluded the fourth review of Tanzania's Extended Credit Facility (ECF) arrangement and the first review under the Resilience and Sustainability Facility (RSF). The ECF, approved in July 2022, grants Tanzania a total access of SDR 795.58 million, approximately US$1,046.4 million at the time of approval. With this latest review completion, Tanzania gains immediate access to US$148.6 million, bringing the total disbursement under this arrangement to about US$754.3 million.
The RSF, approved in June 2024 with a total access of US$791.6 million, allows an immediate disbursement of approximately US$55.9 million following the review's completion. This facility supports Tanzania's climate policy reforms aimed at enhancing economic resilience.
Tanzania's reform program under the ECF remains on track with all quantitative performance criteria met by end-June 2024. However, performance on structural benchmarks varied; some were completed on time while others faced delays or were not completed. Authorities have requested to reset these benchmarks to end-March 2025 for sufficient completion time.
Economic growth in Tanzania has accelerated with real GDP growth rising to 5.4% year-on-year in the first half of 2024 from 5.1% in 2023. Inflation is within target and fiscal consolidation is ongoing. The current account deficit narrowed due to strong service exports and reduced imports.
Looking ahead, growth is expected to strengthen but risks remain tilted downwards. Key priorities include fiscal consolidation while maintaining social spending and continuing exchange rate flexibility.
Following discussions, Mr. Li, Deputy Managing Director and Acting Chair stated: “Tanzania’s reform program supported by the Extended Credit Facility (ECF) remains on track, and the growth outlook is favorable... Continued increase in the allocation of funds to priority social spending is needed to close Tanzania’s human capital and social development gaps.”
He emphasized easing pressures in foreign exchange markets through monetary policy and improving liquidity management: “Pressures in the foreign exchange market have eased... The Bank of Tanzania (BoT) should continue its efforts to improve liquidity and price discovery in the FX market.”
Mr. Li also highlighted progress towards financial stability: “Upgrading financial supervision and regulatory frameworks... will help buttress financial sector stability.”
Finally, he noted structural reforms are crucial for private sector development: “Structural reforms are essential to promote private sector development... Closing gender gaps would also support growth and inclusion.”