Dar es Salaam. Tanzania has reached an agreement with International Monetary Fund (IMF) on a medium-term program to secure Sh2.4 trillion, the lender has announced.
In a statement released by IMF, it was revealed that the finalization of this agreement came from meetings between Tanzanian authorities and IMF that were held from May to June 2022 in Dodoma, Dar es Salaam and Zanzibar.
According to the IMF’s statement, this program is set to develop Tanzania’s economy.
“Tanzania’s economy is gradually recovering from the negative effects of the COVID-19 pandemic but spillovers from the war in Ukraine are stalling the recovery. IMF emergency assistance under the Rapid Credit Facility (RCF), and additional support from other development partners, supported the authorities’ efforts to step up the pandemic response, address fiscal pressures engendered by the pandemic response, and close financing needs,” the statement details.
It further disclosed that the medium-term program aims at mobilizing domestic revenue and creating space for much-needed investment in the country.
According to the communique, the investment will be in human and physical capital increased social spending, advancing the authorities’ structural reform agenda, including improving the business environment and competitiveness and strengthening financial deepening and stability.
“The program’s fiscal policy will focus on enhancing growth while maintaining fiscal and debt sustainability. Key priorities include increasing domestic revenues to create fiscal space through credible medium-term revenue mobilization plans and a comprehensive revenue strategy. Efforts will continue to redress the decline in priority social spending and help address increasing demands for public services in education and health, as well as improve the quality of spending, including by reducing fiscal risks and improving public investment management,” it stated.
IMF further said that Tanzanian authorities will continue to implement the blueprint for regulatory reforms that stress the streamlining of permits and licenses as they rationalize the number of regulatory institutions.
“A tighter monetary policy stance may be needed to maintain the BOT’s inflation target while addressing heightened inflationary pressures stemming from the war in Ukraine and the global tightening cycle,” the statement advised.