The IMF announced on Thursday that its executive board has approved a funding package for Tanzania amounting to $786.2 million to aid in addressing climate change. Additionally, a separate review has been completed, allowing for the disbursement of $149.4 million for budget support.
Commitment to economic reforms
The IMF stated that Tanzanian authorities are dedicated to continuing reforms aimed at preserving macro-financial stability, strengthening economic recovery, and promoting sustainable and inclusive growth. Over the past three years, President Samia Suluhu Hassan’s administration has implemented various economic reforms to restore the country’s economic growth to its pre-pandemic real GDP growth rate of 6 percent to 7 percent.
Economic performance
According to the IMF, Tanzania’s economic reform programme remains robust, with economic growth rebounding in 2023 after a slowdown in 2022. The current account deficit is narrowing due to fiscal consolidation, easing commodity prices, and tight external financing conditions. While economic recovery is expected to gain momentum, the IMF warned of challenges from an ‘unfavorable global economic environment.’
Sector resilience
Tanzania’s economy, which is heavily reliant on tourism, mining, agriculture, and manufacturing, has shown resilience in the face of extreme weather events and climate change. The World Bank credits a surge in the services sector for this resilience. According to Minister of State for Planning and Investment Kitila Mkumbo, the economy is forecasted to accelerate to 5.4 percent this year, up from 5.1 percent in 2023.
This funding from the IMF is seen as a crucial step in supporting Tanzania’s ongoing economic reforms and recovery efforts, ensuring the country’s growth remains sustainable and inclusive amidst global economic challenges.
