Board approves $1.05 billion 40-month extended credit facility Separately, AfDB agrees $73.5 million for food production
The International Monetary Fund’s board approved a $1.05 billion extended credit facility for Tanzania and plans to disburse $151.7 million immediately.
The financing is the nation’s first IMF policy-reform funding program in a decade and comes after the Washington-based lender raised Tanzania’s risk of debt distress to moderate from low in September. President Samia Suluhu Hassan told Bloomberg in March that her government was seeking IMF funding in a switch to more concessional loans to reduce the risk of debt distress for the $69.4 billion economy.
Also read: Tanzania to boost sugarcane production
The 40-month package will assist with economic recovery and help address the repercussions of Russia’s invasion of Ukraine on the East African nation. It will also help enhance macro-economic stability and underpin structural reforms, the IMF said Monday in an emailed statement.
“IMF financial support is also expected to help stimulate private-sector investment and catalyze financial support from development partners,” according to the statement.
The spillover from Ukraine is stalling Tanzania’s recovery from the coronavirus pandemic and is exacerbating the nation’s challenges, the IMF said. The nation’s authorities forecast the economy will expand 4.7% this year, compared with 4.9% in 2021 and 4.8% in 2020.
Tanzania plans to borrow 5.78 trillion shillings ($2.49 billion) from the domestic market, 3.03 trillion shillings from non-concessional sources and 4.65 trillion shillings in grants and concessional loans this fiscal year, Finance and Planning Minister Mwigulu Nchemba said in June.
Separately, Tanzania will receive $73.5 million from the African Development Bank for a program to boost food production by a million tons in three years, the lender said Tuesday.
The funds will be utilized in the $84.1 million Tanzania Agricultural Inputs Support Project spanning September 2022 to June 2025, according to an emailed statement. The government will provide the balance for the program designed to tackle a potential food crisis exacerbated by the war in Ukraine.
“It seeks to strengthen the country’s capacity to achieve self-sufficiency in wheat and edible oil production by 2030,” the AfDB said.