## IMF Executive Board Approves a 40-month, US$1,046.4 million ECF Arrangement for Tanzania _IMF News, July 18, 2022_ ## Source details **Canonical URL:** [IMF Executive Board Approves a 40-month, US$1,046.4 million ECF Arrangement for Tanzania](https://www.imf.org/en/news/articles/2022/07/18/pr22265imfexecutiveboardapproveecffortanzania) ## Other formats - [Markdown version](/en/news/articles/2022/07/18/pr22265imfexecutiveboardapproveecffortanzania/index.md) - [Structured JSON version](/en/news/articles/2022/07/18/pr22265imfexecutiveboardapproveecffortanzania/index.json) - [Bundle manifest](/en/news/articles/2022/07/18/pr22265imfexecutiveboardapproveecffortanzania/bundle-manifest.json) ## Bibliographic details - Published: July 18, 2022 --- ### Approval and Financing - 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. ### Program Objectives and Reform Focus - The 40-month financing package will: - Assist the economic recovery and address the spillovers from Russia’s invasion of Ukraine. - Help preserve macroeconomic stability. - Support structural reforms toward sustainable and inclusive growth, drawing on the government’s priorities and the Five-Year Development Plan. - Reforms will focus on: - Strengthening fiscal space for much needed social spending and high-yield public investment. - Resuming and advancing the authorities’ structural reform agenda. - Strengthening financial deepening and stability. - 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. ### IMF Directors’ Assessment and Policy Recommendations - 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: - Catalyze additional external financing. - Support a gradual recovery while increasing social and development spending. - Anchor the country’s National Development Plan. - Policy recommendations and priorities highlighted by Directors: - Scale up vaccination efforts. - Rebalance expenditure towards social spending and improve its efficiency and execution. - Create additional fiscal space by raising government revenue, improving spending quality, and containing fiscal risks from SOEs, PPPs, and local governments. - Ensure measures to cope with high fuel and food prices are targeted, temporary, and limit non-concessional financing to preserve debt sustainability. - Continue efforts in fiscal transparency and accountability; welcome progress towards COVID-related transparency commitments. - Adopt an integrated capacity development strategy to bolster reform efforts. - Tighten monetary policy as needed while allowing exchange rate flexibility to cushion shocks; strengthen the monetary policy framework and communication strategy. - Improve financial regulation and supervision and implement the 2018 FSAP recommendations to address financial sector vulnerabilities. - Further align the AML/CFT framework with FATF guidelines. - Boost private investment and potential growth through implementation of ambitious reforms, including improvements in human capital and infrastructure spending, and closing remaining gender gaps. - Improve National Accounts statistics and continue to address climate risks, building on findings from the upcoming C-PIMA. ### Selected Economic Indicators, 2020/21—2023/24 - Output - Real GDP growth (%): 2020/21 Prel. 4.9; 2021/22 Proj. 4.8; 2022/23 5.0; 2023/24 5.8 - Prices - Inflation - average (%): 2020/21 3.3; 2021/22 4.2; 2022/23 5.3; 2023/24 4.4 - Central government finances (fiscal year) - Revenue (% GDP): 2020/21 13.7; 2021/22 15.0; 2022/23 15.4; 2023/24 16.1 - Expenditure (% GDP): 2020/21 17.1; 2021/22 17.8; 2022/23 18.7; 2023/24 19.2 - Fiscal balance (% GDP): 2020/21 -3.9; 2021/22 -2.8; 2022/23 -3.3; 2023/24 -3.1 - Public debt (% GDP): 2020/21 41.5; 2021/22 39.5; 2022/23 38.3; 2023/24 37.2 - External debt (% GDP): 2020/21 29.4; 2021/22 27.3; 2022/23 25.8; 2023/24 24.7 - Money and Credit - Broad money (% change): 2020/21 11.7; 2021/22 9.2; 2022/23 10.3; 2023/24 11.1 - Credit to private sector (% change): 2020/21 3.6; 2021/22 9.1; 2022/23 10.7; 2023/24 11.5 - Balance of payments - Current account (% GDP): 2020/21 -1.9; 2021/22 -4.5; 2022/23 -4.3; 2023/24 -3.5 - Reserves (in months of imports): 2020/21 4.5 - Exchange rate - REER (% change): 2020/21 -2.6 *Source: Tanzanian authorities and IMF staff estimates and projections.* --- ## Content in this bundle - **PR22/265 — Bodi Tendaji ya Shirika la Fedha la Kimataifa** - [PR22/265 — Bodi Tendaji ya Shirika la Fedha la Kimataifa (Markdown version)](/-/media/files/news/press-release/2022/pr22265-swa-tanzania-pr.pdf.md){rel="alternate" type="text/markdown"} - [PR22/265 — Bodi Tendaji ya Shirika la Fedha la Kimataifa (PDF)](/-/media/files/news/press-release/2022/pr22265-swa-tanzania-pr.pdf){rel="external" type="application/pdf"} --- ## References - [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) _Source: https://www.imf.org/en/news/articles/2022/07/18/pr22265imfexecutiveboardapproveecffortanzania_