{ "title": "IMF Executive Board Completes the First Review Under the Extended Credit Facility Arrangement and Concludes the 2023 Article IV Consultation with Tanzania", "publication": "IMF News, April 25, 2023", "sourceUrl": "https://www.imf.org/en/news/articles/2023/04/25/pr-23127-tanzania-board-first-review-and-article-iv", "canonical": "https://www.imf.org/en/news/articles/2023/04/25/pr-23127-tanzania-board-first-review-and-article-iv", "overlayPath": "/en/news/articles/2023/04/25/pr-23127-tanzania-board-first-review-and-article-iv/index.md", "summary": "TANZANIA IMF ARTICLE IV FIRST REVIEW EXTENDED CREDIT FACILITY", "publishDate": "2023-04-25", "sections": [ { "heading": "Program status and disbursement", "content": "- The Executive Board completed the first review of the Extended Credit Facility (ECF) Arrangement and the 2023 Article IV Consultation with Tanzania on April 24, 2023.\n- The completion of the first review allows the immediate disbursement of SDR 113.37 million (about US$ 153 million).\n- Tanzania’s total access under the arrangement following this disbursement is about US$ 304.7 million.\n- Tanzania’s three-year ECF Arrangement for a total access of SDR 795.58 million (200 percent of quota—about US$ 1,046.4 million at the time of program approval) was approved on July 18, 2022.\n- The arrangement aims to support economic recovery, preserve macro-financial stability, and promote sustainable and inclusive growth." }, { "heading": "Program performance and reforms", "content": "- All quantitative performance criteria and indicative targets for December 2022 were met.\n- Structural benchmarks:\n - The benchmark to prepare and begin implementing a plan to clear all expenditure arrears was completed ahead of time.\n - The benchmark to submit the amendments to the Banking and Financial Institutions Act to Parliament was completed ahead of time.\n - The benchmark to complete and publish the post-crisis audit of pandemic-related spending and to submit the FY2023/24 preliminary Budget to the Parliament were completed with delay.\n- Reform focus areas:\n - Strengthening fiscal space to allow for social spending and high-yield public investment.\n - Enhancing the monetary policy framework and improving financial sector supervision.\n - Advancing structural reforms to promote sustainable and inclusive growth." }, { "heading": "Economic outlook and recent developments", "content": "- Growth and output:\n - After a modest recovery to 4.9 percent in 2021, real GDP growth is estimated to have slowed to 4.7 percent in 2022.\n - Growth is expected to recover to 5.2 percent in 2023 as global commodity price shocks subside and the business environment improves.\n- Inflation and policy response:\n - Tanzania’s inflation is relatively low, partly reflecting low passthrough.\n - Authorities responded to recent increases in inflationary pressures with temporary fuel and fertilizer price subsidies and tightening of liquidity in the financial system.\n- Fiscal policy:\n - The authorities’ draft budget for FY2023/24 is based on conservative revenue and expenditure projections and aims to achieve fiscal consolidation while safeguarding priority social spending." }, { "heading": "IMF policy recommendations and Executive Board assessment", "content": "- From Ms. Antoinette Sayeh, Deputy Managing Director and acting Chair:\n - Continue completing the pandemic health and economic response and preserve macroeconomic stability.\n - Enhance domestic revenue mobilization and improve efficiency of expenditures to create fiscal space for priority investment and social spending.\n - Strengthen public finance management and oversight of state-owned enterprises to contain fiscal risks.\n - Clear verified domestic arrears and prevent accumulation of new ones by strengthening cash management and commitment controls.\n - Prioritize concessional financing and ensure fiscal risks from contingent liabilities are well-contained, noting Tanzania's risk of debt distress remains moderate.\n - Bank of Tanzania (BoT) should stand ready to tighten monetary policy as needed while allowing more exchange rate flexibility against external shocks.\n - Complete the transition to an interest rate-based monetary policy to enhance effectiveness.\n - Upgrade the financial supervision framework, including implementing FSAP recommendations, to buttress financial sector stability and promote financial deepening.\n - Streamline bureaucratic procedures, simplify the business regulatory regime, and enhance regulatory transparency to support private sector development.\n - Implement and enforce the authorities’ anti-corruption strategy and establish a risk-based AML/CFT supervisory approach to improve governance and address deficiencies.\n - Increase resilience to climate change through mitigation and adaptation policies.\n- Executive Directors:\n - Welcomed policy response to spillovers from the war in Ukraine and commended strong performance under the ECF arrangement.\n - Emphasized continued commitment to reforms to strengthen recovery, preserve macroeconomic stability, and support sustainable and inclusive growth.\n - Supported the authorities’ plan for fiscal consolidation starting in FY2023/24 while protecting the vulnerable.\n - Encouraged enhancing domestic revenue mobilization; improving expenditure efficiency, particularly public investments; strengthening public finance management and transparency (including management of future gas revenues); and containing fiscal risks from SOEs.\n - Urged strengthening cash management and commitment controls to prevent new arrears and looked forward to implementation of audit recommendations for pandemic-related spending.\n - Supported a data-dependent monetary policy, encouraged the BoT to stand ready to tighten further should second-round inflation effects emerge, and emphasized limiting budget financing by the BoT.\n - Called for strengthening financial supervision, allowing more exchange rate flexibility, enhancing transparency in FX operations, and maintaining adequate reserve buffers.\n - Noted Tanzania’s interest in the Resilience and Sustainability Facility." }, { "heading": "Selected economic indicators (FY2020/21–2023/24)", "content": "- Output\n - Real GDP growth (%): 4.9; 4.8; 5.0; 5.7\n - Calendar year real GDP growth (%) 1: 4.7; 5.2; 6.1\n- Prices\n - Inflation - average (%): 3.3; 4.0; 4.4\n- Central government finances\n - Revenue (% GDP): 13.6; 14.8; 15.0; 15.5\n - Expenditure (% GDP): 17.0; 18.2; 18.1\n - Fiscal balance (% GDP): -3.8; -3.5; -3.1; -2.7\n - Public debt (% GDP): 41.3; 42.0; 40.9; 39.2\n- Money and credit\n - Broad money (% change): 11.7; 6.5; 10.7; 11.0\n - Credit to private sector (% change): 3.6; 19.4; 19.8; 12.0\n- Balance of payments\n - Current account (% GDP): -2.1; -4.6; -4.4; -3.2\n - Reserves (in months of imports): 4.6; 3.8\n - External public debt (% GDP): 29.2; 27.9; 26.9; 25.8\n- Exchange rate\n - REER (% change): 2.6; 2.3; ...\n\nSources: Tanzanian authorities and Fund staff calculations.\n\nIMF press release, April 24, 2023.\n\n---\n\n Content in this bundle\n\n- Press Release-English\n - Press Release-English (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Press Release-English (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- United Republic of Tanzania and the IMF\n- IMF Policy Advice -- A Factsheet\n- Special Drawing Rights (SDRs) -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- ECF Arrangement\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2023/04/25/pr-23127-tanzania-board-first-review-and-article-iv" } ], "bullets": [ "[Markdown version](/en/news/articles/2023/04/25/pr-23127-tanzania-board-first-review-and-article-iv/index.md)", "[Structured JSON version](/en/news/articles/2023/04/25/pr-23127-tanzania-board-first-review-and-article-iv/index.json)", "[Bundle manifest](/en/news/articles/2023/04/25/pr-23127-tanzania-board-first-review-and-article-iv/bundle-manifest.json)", "Published: April 25, 2023", "The Executive Board completed the first review of the Extended Credit Facility (ECF) Arrangement and the 2023 Article IV Consultation with Tanzania on April 24, 2023.", "The completion of the first review allows the immediate disbursement of SDR 113.37 million (about US$ 153 million).", "Tanzania’s total access under the arrangement following this disbursement is about US$ 304.7 million.", "Tanzania’s three-year ECF Arrangement for a total access of SDR 795.58 million (200 percent of quota—about US$ 1,046.4 million at the time of program approval) was approved on July 18, 2022.", "The arrangement aims to support economic recovery, preserve macro-financial stability, and promote sustainable and inclusive growth.", "All quantitative performance criteria and indicative targets for December 2022 were met.", "Structural benchmarks:", "Reform focus areas:", "Growth and output:", "Inflation and policy response:", "Fiscal policy:", "From Ms. Antoinette Sayeh, Deputy Managing Director and acting Chair:", "Executive Directors:", "Output", "Prices", "Central government finances", "Money and credit", "Balance of payments", "Exchange rate", "**Press Release-English**", "[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)", "[Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)", "[Press Releases](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[ECF Arrangement](https://www.imf.org/en/News/Articles/2022/07/18/PR22265imfexecutiveboardapproveECFforTanzania)", "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "related": [ { "title": "Press Release-English", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/news/press-release/2023/pr23127-swa-tanzania.pdf", "summary": { "path": "/-/media/files/news/press-release/2023/pr23127-swa-tanzania.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/news/press-release/2023/pr23127-swa-tanzania.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/news/articles/2023/04/25/pr-23127-tanzania-board-first-review-and-article-iv/index.md", "json": "/en/news/articles/2023/04/25/pr-23127-tanzania-board-first-review-and-article-iv/index.json", "bundleManifest": "/en/news/articles/2023/04/25/pr-23127-tanzania-board-first-review-and-article-iv/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T02:00:50.813Z" }