IMF Executive Board Approves US$372.4 Million Rapid Credit Facility Disbursement to Tanzania to Address the COVID-19 Pandemic
IMF News, November 13, 2021
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- Published: November 13, 2021
Key decision and financing details
- Executive Board approved a disbursement equivalent to SDR265.2 million (US$372.4 million or 66.7 percent of quota) under the Rapid Credit Facility (RCF).
- The RCF disbursement is fully concessional and is equal in amount to recent early-repurchased non-concessional financial assistance under the Rapid Financing Instrument (RFI).
- The RCF financing will facilitate ongoing implementation of the authorities’ pandemic relief plans and allow Tanzania to take full advantage of its new eligibility to borrow from the Fund fully on concessional terms.
Economic context and recent performance
- Tanzania continues to experience substantial challenges from the COVID-19 pandemic and faces an ongoing urgent balance of payments need as the authorities implement a comprehensive emergency response plan, including a vaccination campaign.
- Recent reporting of COVID-19 data in Tanzania indicates an increase in the number of cases amid a third wave of the virus.
- Travel services receipts and travel arrivals continue to remain below pre-pandemic levels.
- Growth reportedly decelerated to 4.8 percent in 2020, and economic performance is expected to remain subdued in 2021.
- Tanzania’s risk of external and public debt distress remains moderate.
Purpose and expected effects of the RCF disbursement
- Address Tanzania’s urgent balance of payments needs arising from the COVID-19 pandemic.
- Provide concessional resources needed to take measures to mitigate the severe socio-economic impact of the pandemic.
- Help catalyze support from development partners.
- Support the authorities’ implementation of the Tanzania COVID-19 Socioeconomic Response Plan (TCRP).
Governance, transparency, and conditional actions
- The authorities remain committed to strengthening governance and transparency to ensure that IMF financial resources are efficiently spent on addressing the crisis.
- Measures the authorities will undertake include:
- publishing reports of RCF resources spent; and
- undertaking a post-crisis audit of all pandemic-related spending.
- The authorities will prioritize the health response, including the vaccination campaign; enhance social safety nets; and strengthen coordination, governance, and transparency of pandemic-related spending.
Official statement highlights (Mr. Bo Li, Deputy Managing Director and Chair)
- The COVID-19 pandemic continues to take a toll on the Tanzanian people and economy.
- The macroeconomic outlook depends on successful implementation of the TCRP, but downside risks remain.
- Temporarily loosening macroeconomic and financial policies has helped mitigate the pandemic’s impact and support economic recovery.
- The Fund’s emergency financing on fully concessional terms will help the country narrow its external financing gap, support the authorities’ implementation of the TCRP, and help catalyze donor support.
Source: IMF Press Release No. 21/333, November 12, 2021.
References
- United Republic of Tanzania and the IMF
- Press Releases
- PRESS CENTER
- Rapid Credit Facility
- [Fund Concessional Financial Support for Low-Income
Countries--Responding to the Pandemic](https://www.imf.org/en/Publications/Policy-Papers/Issues/2021/07/22/Fund-Concessional-Financial-Support-For-Low-Income-Countries-Responding-To-The-Pandemic-462520)