The first review of Tanzania’s three-year extended credit facility was authorised by the International Monetary Fund‘s executive board on Monday, enabling an immediate distribution of roughly $153 million in budgetary support, the IMF said in a statement.
According to the IMF, Tanzania’s economic reform programme is making good progress despite the difficult global economic climate, but policymakers should work to increase domestic revenue while accelerating structural reforms to reduce bureaucracy and fight corruption.
The IMF stated that the move raises the total amount disbursed under the $1.04 billion loan agreement agreed for Tanzania last year to approximately $305 million.
“Program performance has been strong. All quantitative performance criteria and indicative targets for December 2022 were met, and two of the three structural benchmarks for December 2022 were completed on time,” IMF Deputy Managing Director Antoinette Sayeh said.
Tanzania may finance critical investments and social spending with the support of increased domestic income mobilisation and improved spending effectiveness, she added.
“Strengthening public finance management and oversight of state-owned enterprises is critical to contain fiscal risks,” and authorities should clear domestic arrears and prevent accumulation of new ones by strengthening cash management and commitment controls, Sayeh stated.
According to Sayeh, Tanzania’s risk of financial distress is still low, but it is crucial to maintain a focus on low-interest financing and make sure that risks from prospective liabilities are effectively managed.