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The International Monetary Fund (IMF) has extended a financial lifeline to Tanzania, approving a disbursement of $204.5 million.
The decision follows the completion of reviews under two key programs, reflecting confidence in Tanzania’s economic management and reform agenda.
This approval includes $148.6 million under the Extended Credit Facility (ECF), a program designed to support countries in maintaining macroeconomic stability and implementing growth-enhancing reforms. Additionally, $55.9 million was allocated through the Resilience and Sustainability Facility (RSF), which focuses on addressing climate challenges and fostering long-term resilience in vulnerable economies.
The IMF’s review praised Tanzania for its commitment to economic reforms despite global and domestic challenges. It emphasized the importance of creating fiscal space by boosting domestic revenue, improving spending efficiency, and safeguarding debt sustainability. Enhanced public financial management and closer oversight of state-owned enterprises were also highlighted as critical steps to reduce fiscal risks.
Tanzania’s efforts to address currency pressures were acknowledged, with recommendations for greater exchange rate flexibility and continued tightening of local currency liquidity. The IMF also encouraged the modernization of monetary policy frameworks to improve economic management. These measures are intended to stabilize the financial system and promote sustainable growth.
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In tackling climate-related vulnerabilities, the IMF called for a stronger focus on adaptation and mitigation policies. Structural reforms, including simplifying business regulations and enhancing governance through anti-corruption initiatives, were identified as vital to fostering an inclusive and resilient economy.
The approved funds will be channeled toward priority infrastructure, social projects, and climate initiatives, offering Tanzania the tools to advance its development goals while safeguarding fiscal and financial stability.
