Here are a couple of things that have happened with Tanzania: the International Monetary Fund recently upgraded its risk of debt distress from low to moderate. The country’s debt also increased by 20% to $37.1 billion in 2021. These have not stopped the country’s leadership, headed by President Samia Suluhu Hassan, from unveiling ambitious plans to borrow more money. She’s currently in talks with the IMF for a $700 million loan facility, barely seven months after Tanzania got a $576 million intervention to support its recovery from the effects of the coronavirus pandemic. If the talks are successful, the country will receive its first IMF policy reform assistance package in more than a decade. The first episode of Business Edge for April, which is the final day of the week, focuses on the discussions between Tanzania and the IMF over the $700m loan aimed at developing infrastructural projects in the East African country, Tolulope Adeleru-Balogun is joined by Dr XN Iraki of the University of Nairobi.
A few years ago, Tanzania was upgraded from a low-income country to a middle-income one. This seemingly innocuous move has had a major impact on Tanzania’s economy and caused a positive perception of its ability to improve by international financial institutions, such as the IMF. “By upgrading Tanzania to a middle-income country, it shows that the economy is doing much better,” says Dr Iraki, adding that even though the country was badly affected by the COVID19 crisis like most countries across the world were, it was able to maintain a semblance of normalcy while the lockdown lasted, and has since embarked on the road to recovery.
Another striking factor is the cordial relationship current president Samia Suluhu Hassan has with international lenders and financial institutions, unlike that of her predecessor which was by and large strained and rocky. “She understands that if Tanzania is to catch up with the rest of the world, you must work with lenders and partners that can bring in investors.”
Dr Iraki also shares his thoughts on if indeed Tanzania will receive the seven hundred million dollars from the IMF or not. Watch the full episode of Business Edge above.
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