{
  "title": "IMF Executive Board Approves a 40-month, US$1,046.4 million ECF Arrangement for Tanzania",
  "publication": "IMF News, July 18, 2022",
  "sourceUrl": "https://www.imf.org/en/news/articles/2022/07/18/pr22265imfexecutiveboardapproveecffortanzania",
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  "summary": "IMF Executive Board Approves a 40-month, US$1,046.4 million ECF Arrangement for Tanzania",
  "publishDate": "2022-07-18",
  "sections": [
    {
      "heading": "Approval and Financing",
      "content": "- The Executive Board approved a 40-month extended arrangement under the Extended Credit Facility (ECF) for Tanzania with access equivalent to SDR 795.58 (200 percent of quota, equivalent to US$1,046.4 million).\n- The Board’s approval allows for an immediate disbursement equivalent to US$151.7 million.\n- The ECF arrangement follows Fund emergency support to Tanzania in 2021 (100 percent of quota, equivalent to US$561.5 million).\n- The arrangement is expected to catalyze additional bilateral and multilateral financial support and help stimulate private sector investment and catalyze financial support from development partners."
    },
    {
      "heading": "Program Objectives and Reform Focus",
      "content": "- The 40-month financing package will:\n  - Assist the economic recovery and address the spillovers from Russia’s invasion of Ukraine.\n  - Help preserve macroeconomic stability.\n  - Support structural reforms toward sustainable and inclusive growth, drawing on the government’s priorities and the Five-Year Development Plan.\n- Reforms will focus on:\n  - Strengthening fiscal space for much needed social spending and high-yield public investment.\n  - Resuming and advancing the authorities’ structural reform agenda.\n  - Strengthening financial deepening and stability.\n- The program is centered on supporting recovery from COVID-19 scarring, coping with spillovers from the war in Ukraine, preserving macroeconomic stability, and advancing structural reforms."
    },
    {
      "heading": "IMF Directors’ Assessment and Policy Recommendations",
      "content": "- Directors commended authorities for their economic response to the pandemic and policies to mitigate spillovers from the war in Ukraine, while noting considerable development and reform challenges and external headwinds.\n- Directors supported the authorities’ request for an ECF arrangement to meet pressing financing needs and to:\n  - Catalyze additional external financing.\n  - Support a gradual recovery while increasing social and development spending.\n  - Anchor the country’s National Development Plan.\n- Policy recommendations and priorities highlighted by Directors:\n  - Scale up vaccination efforts.\n  - Rebalance expenditure towards social spending and improve its efficiency and execution.\n  - Create additional fiscal space by raising government revenue, improving spending quality, and containing fiscal risks from SOEs, PPPs, and local governments.\n  - Ensure measures to cope with high fuel and food prices are targeted, temporary, and limit non-concessional financing to preserve debt sustainability.\n  - Continue efforts in fiscal transparency and accountability; welcome progress towards COVID-related transparency commitments.\n  - Adopt an integrated capacity development strategy to bolster reform efforts.\n  - Tighten monetary policy as needed while allowing exchange rate flexibility to cushion shocks; strengthen the monetary policy framework and communication strategy.\n  - Improve financial regulation and supervision and implement the 2018 FSAP recommendations to address financial sector vulnerabilities.\n  - Further align the AML/CFT framework with FATF guidelines.\n  - Boost private investment and potential growth through implementation of ambitious reforms, including improvements in human capital and infrastructure spending, and closing remaining gender gaps.\n  - Improve National Accounts statistics and continue to address climate risks, building on findings from the upcoming C-PIMA."
    },
    {
      "heading": "Selected Economic Indicators, 2020/21—2023/24",
      "content": "- Output\n  - Real GDP growth (%): 2020/21 Prel. 4.9; 2021/22 Proj. 4.8; 2022/23 5.0; 2023/24 5.8\n- Prices\n  - Inflation - average (%): 2020/21 3.3; 2021/22 4.2; 2022/23 5.3; 2023/24 4.4\n- Central government finances (fiscal year)\n  - Revenue (% GDP): 2020/21 13.7; 2021/22 15.0; 2022/23 15.4; 2023/24 16.1\n  - Expenditure (% GDP): 2020/21 17.1; 2021/22 17.8; 2022/23 18.7; 2023/24 19.2\n  - Fiscal balance (% GDP): 2020/21 -3.9; 2021/22 -2.8; 2022/23 -3.3; 2023/24 -3.1\n  - Public debt (% GDP): 2020/21 41.5; 2021/22 39.5; 2022/23 38.3; 2023/24 37.2\n  - External debt (% GDP): 2020/21 29.4; 2021/22 27.3; 2022/23 25.8; 2023/24 24.7\n- Money and Credit\n  - Broad money (% change): 2020/21 11.7; 2021/22 9.2; 2022/23 10.3; 2023/24 11.1\n  - Credit to private sector (% change): 2020/21 3.6; 2021/22 9.1; 2022/23 10.7; 2023/24 11.5\n- Balance of payments\n  - Current account (% GDP): 2020/21 -1.9; 2021/22 -4.5; 2022/23 -4.3; 2023/24 -3.5\n  - Reserves (in months of imports): 2020/21 4.5\n- Exchange rate\n  - REER (% change): 2020/21 -2.6\n\nSource: Tanzanian authorities and IMF staff estimates and projections.\n\n---\n\n Content in this bundle\n\n- PR22/265 — Bodi Tendaji ya Shirika la Fedha la Kimataifa\n  - PR22/265 — Bodi Tendaji ya Shirika la Fedha la Kimataifa (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - PR22/265 — Bodi Tendaji ya Shirika la Fedha la Kimataifa (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- United Republic of Tanzania and the IMF\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2022/07/18/pr22265imfexecutiveboardapproveecffortanzania"
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    "Published: July 18, 2022",
    "The Executive Board approved a 40-month extended arrangement under the Extended Credit Facility (ECF) for Tanzania with access equivalent to SDR 795.58 (200 percent of quota, equivalent to US$1,046.4 million).",
    "The Board’s approval allows for an immediate disbursement equivalent to US$151.7 million.",
    "The ECF arrangement follows Fund emergency support to Tanzania in 2021 (100 percent of quota, equivalent to US$561.5 million).",
    "The arrangement is expected to catalyze additional bilateral and multilateral financial support and help stimulate private sector investment and catalyze financial support from development partners.",
    "The 40-month financing package will:",
    "Reforms will focus on:",
    "The program is centered on supporting recovery from COVID-19 scarring, coping with spillovers from the war in Ukraine, preserving macroeconomic stability, and advancing structural reforms.",
    "Directors commended authorities for their economic response to the pandemic and policies to mitigate spillovers from the war in Ukraine, while noting considerable development and reform challenges and external headwinds.",
    "Directors supported the authorities’ request for an ECF arrangement to meet pressing financing needs and to:",
    "Policy recommendations and priorities highlighted by Directors:",
    "Output",
    "Prices",
    "Central government finances (fiscal year)",
    "Money and Credit",
    "Balance of payments",
    "Exchange rate",
    "**PR22/265 — Bodi Tendaji ya Shirika la Fedha la Kimataifa**",
    "[United Republic of Tanzania and the IMF](http://www.imf.org/external/country/TZA/index.htm)",
    "[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)"
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