## IMF Staff Completes 2020 Article IV Mission to Tanzania

_IMF News, March 5, 2020_

## Source details

**Canonical URL:** [IMF Staff Completes 2020 Article IV Mission to Tanzania](https://www.imf.org/en/news/articles/2020/03/05/pr2081-tanzania-imf-staff-completes-2020-article-iv-mission)

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## Bibliographic details
- Published: March 5, 2020

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### Mission overview and macroeconomic snapshot
- Mission dates: February 20 to March 4, 2020.
- Press release date: March 5, 2020.
- Key macroeconomic conditions (staff estimates):
  - Real GDP growth: about 6 percent; staff also states "close to 6 percent."
  - Annual inflation: 3.7 percent; described elsewhere as "under 5 percent."
  - Foreign exchange reserves: equivalent to near 5 months of imports.
  - Public debt: below 40 percent of GDP.
- IMF Executive Board timing: The IMF Executive Board is expected to discuss the 2020 Article IV Consultation report by May 2020.

### Main findings from the mission
- Recent drivers of activity:
  - Increased public investment, a rebound in exports, and an increase in credit to the private sector have prompted an increase in the pace of economic activity.
  - Activity is buoyant in the construction and mining sectors.
- Overall assessment:
  - Prudent fiscal and monetary policies have delivered economic stability.
  - The economic environment is described as benign with stable exchange rate conditions and manageable public debt.
- Data and transparency:
  - Authorities committed to improve the quality and timeliness of indicators of economic activity and of GDP through improvements in economic surveys and publication of high-frequency indicators and surveys’ results, as well as improvements in fiscal accounts.

### Policy priorities and recommendations
- Tax policy and administration:
  - Implement tax reforms to improve the business climate and increase government revenues.
  - Improve governance in tax administration and adhere to efficient means of tax collection and control, notably through use of risk-based audits.
  - Expand the number of taxpayers and improve tax administration and compliance in line with established protocols and regulations.
  - Conduct a comprehensive review and further rationalization of tax exemptions, particularly income tax incentives.
- Government spending and arrears:
  - Implement planned measures to clear the backlog of expenditure arrears, account for them on a timely basis, and prevent the accumulation of new ones.
  - Increase spending on health and education in coming years while ensuring quality of services and addressing key infrastructure gaps.
  - Design and prioritize such expenditures carefully to maximize social and growth benefits.
- Financial sector and credit access:
  - Proceed with measures to further reduce non-performing loans and improve banking supervision to protect banks’ soundness.
  - Lower borrowing costs and improve access to credit by broadening the pool of acceptable collateral, improving the framework for credit information, and tackling judicial bottlenecks for recovery of unpaid loans.
- Business climate and labor skills:
  - Accelerate implementation of the Blueprint for Regulatory Reforms, starting with publication of the action plan including a timetable and delineation of responsibilities.
  - Rationalize agencies, licenses, and permits; remove nontariff barriers to trade.
  - Strengthen regular dialogue with the private sector, invest in education, expand training and vocational programs, and adopt a more flexible and expeditious system of visa/work permits for specialized foreign workers.
- Governance:
  - Continue and publicize anti-corruption stance and actions to enhance attractiveness for investing and producing in Tanzania.

### Engagement and acknowledgments
- The IMF team was led by Mr. Enrique Gelbard.
- Meetings held with: Hon. Dr. Philip Mpango, Minister of Finance and Planning; Professor Florens Luoga, Governor of the Bank of Tanzania; other senior government officials; representatives of the business and banking sectors; and development partners.
- Statement emphasis: A robust and decisive set of policies will be critical to increase private sector investment, job creation, support high economic growth, and increase resilience against risks.

*Press Release No. 20/81 — International Monetary Fund, March 5, 2020.*

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## References

- [United Republic of Tanzania and the IMF](http://www.imf.org/external/country/TZA/index.htm)
- [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2020/03/05/pr2081-tanzania-imf-staff-completes-2020-article-iv-mission_