IMF Board Approves Sh1.3 Trillion Emergency Support Fund For Tanzania

The Executive Board of the International Monetary Fund (IMF) has approved a disbursement of $189.08 million under the Rapid Credit Facility (RCF) and a purchase equivalent to $378.17 million under the Rapid Financing Instrument (RFI), a total of $567.25 million.

This emergency financing will help finance Tanzania’s urgent balance of payment needs stemming from the outbreak of the Covid-19 pandemic.

According to the statement issued on September 7, 2021 by IMF the fund aims to help Tanzania’s economic outlook as it has taken a hit due to the impact of the Covid-19 pandemic.

While presenting in parliament the budget for the fiscal year 2021/22, Finance Minister Mwigulu Nchemba said Tanzania just like any other country in the world has been affected economically and socially due to the outbreak of Covid 19 especially in key sectors including health, tourism, trade, transportation, arts and entertainment.

Nchemba said this led the government to enter the negotiations with IMF for the provision of a $571 million RCF loan as a concessional one to address the economic and social impact of Covid.

The fund was approved following the Executive Board’s discussion, whereby IMF Deputy Managing Director, Mr. Bo Li, who chaired the meeting said with the collapse in tourism in the wake of travel restrictions, the Tanzania’s economy reportedly decelerated to 4.8 percent growth in 2020, and growth is expected to remain subdued in 2021.

Referring to IMF data Tanzania faces an urgent balance of payment need of about 1.5 percent of GDP as the authorities implement a comprehensive plan to mitigate the effects of the pandemic and preserve macroeconomic stability.