A staff team from the International Monetary Fund (IMF), led by Nicolas Blancher, visited Tanzania from April 2 to April 17, 2025. The team conducted the 2025 Article IV consultation, the fifth review under the Extended Credit Facility (ECF), and the second review under the Resilience and Sustainability Facility (RSF). Upon approval by the IMF Executive Board, these reviews will release 326.47 million SDRs (approximately $440.8 million) under the ECF and 255.72 million SDRs (around $343.6 million) under the RSF.
Nicolas Blancher noted, "I am pleased to announce that the IMF team and the Tanzanian authorities have reached a staff-level agreement on the policies needed to complete the fifth review under Tanzania’s ECF-supported program, and the second review of the RSF arrangement."
Tanzania's economy has been performing well, with a real GDP growth of 5.5% in 2024 and a projected 6% in 2025. Inflation stood at 3.3% in March, below the Bank of Tanzania's target of 5%. However, the economic outlook faces downside risks due to an uncertain global environment and potential domestic fiscal pressures from upcoming national elections.
Blancher stated, "Fiscal consolidation is expected to pause in FY24/25 with the adoption of a supplementary budget in February 2025 aimed at increasing public spending by about 0.4 percent of GDP relative to the initial budget." He emphasized the necessity to resume fiscal consolidation in FY25/26 to maintain debt sustainability and fiscal space.
Tanzania's current account deficit has narrowed due to strong mineral and agricultural exports, along with tourism growth. The deficit reduced to 2.6% of GDP from 3.8% the previous year. High gold prices are expected to support exports further.
The mission discussed the Tanzanian economy's longer-term prospects, emphasizing the importance of investing in education and health to achieve the goals of the Tanzania Vision 2050. Efforts to enhance financial access and streamline regulations are viewed as essential reforms.
Climate reform implementation, supported by the RSF, is underway to enhance Tanzania's sustainability. The government is strengthening institutional frameworks for climate policies, with assistance from the IMF, World Bank, and development partners.
During the visit, the IMF team met with Finance Minister Dr. Mwigulu Nchemba, Bank of Tanzania Governor Emmanuel Tutuba, and other officials, as well as development partners and civil society. The team thanked the Tanzanian authorities for their hospitality and productive discussions.