President Samia Suluhu Hassan says Tanzania is seeking at least $700 million from the IMF as it alters its borrowing strategy to take on more concessional loans and decrease the danger of financial crisis.
The action is part of Hassan’s larger strategy to strengthen Tanzania’s fiscal situation, which came after the IMF upgraded Tanzania’s risk of debt distress from low to moderate in September. In recent years, the government has increased commercial borrowings to support infrastructure projects, including $1.5 billion from Standard Chartered to assist fund the construction of a new train.
Increased borrowings during the epidemic, along with a drop in tourism earnings, which contributes for nearly a quarter of Tanzania’s GDP, resulted in an increase in the country’s debt. If the discussions go well, the country will receive its first IMF policy-reform assistance plan in a decade. Tanzania received roughly $570 million from the organization in 2021 as part of the institution’s emergency financing provision for recovery from the coronavirus outbreak.
If the discussions go well, the country will receive its first IMF policy-reform assistance package in a decade. Last year, the organization disbursed $570 million to Tanzania as part of an emergency loan program to help the country recover from the coronavirus outbreak.
According to the World Bank, the country’s debt increased by 20% to $37.1 billion in 2021, implying that the fiscal deficit might rise to 4.2 percent of GDP this year, up from 1.4 percent in the previous fiscal year, according to a January study.
Today, we will be focusing on Tanzania, IMF working on $700 million facility on News Central TV’s Business Edge on StarTimes channel 274 with Dr. XN Iraki. Economist, Faculty Business & Management Sciences, University of Nairobi.
