DAR ES SALAAM – The International Monetary Fund (IMF) announced on Monday that it will provided a 40-month loan of $1.046 billion to Tanzania, mainly to help the country cope with the consequences of the war in Ukraine.
“The fallout from the war in Ukraine is stalling the gradual recovery of the Tanzanian economy from the COVID-19 pandemic and is compounding the country’s development and reform challenges to unlock its economic potential,” the IMF said in a statement.
The fund’s experts therefore believe that the African country will need help to carry out its reforms and “unleash its economic potential”.
Tanzania is to receive the equivalent of $151.7 million immediately. It had already received a $567 million loan at the end of 2021 to meet its urgent needs when the COVID-19 pandemic severely hampered its economic development, particularly in the tourism sector.
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The war in Ukraine has sent food and fuel prices skyrocketing around the world, and rising wheat prices are “particularly concerning”, the IMF said in a recent report titled “A new shock and little room for maneuver”, because sub-Saharan Africa imports 85% of its cereal consumption, with Tanzania, Côte d’Ivoire, Senegal and Mozambique being the main destinations.
The project, which is part of the Extended Credit Facility (ECF), announced on Monday, aims to help finance reforms to improve Tanzania’s financial stability, conduct public investments and support the private sector.
“Recognizing Tanzania’s strong track record in implementing reforms, Directors supported the authorities’ calls for an ECF arrangement to meet urgent financing needs,” said Li Bo Li, the IMF deputy managing director quoted in the statement.
Among other objectives, he also mentioned the importance of continuing vaccination campaigns on a larger scale.
- Editor/ additional report by AFP
