Deputy Managing Director of the International Monetary Fund (IMF), Bo Li, left Tanzania with a clear commitment to aiding the nation in achieving its full potential for growth.
Mr. Bo commended Tanzanian officials for their efforts in carrying out the nation’s economic reform.
“I commended the authorities’ commitment to preserving Tanzania’s macroeconomic stability in a challenging global environment,” he said in a statement on August 1.
“The authorities’ swift policy response helped contain inflation and safeguard the economy against spillovers from the war in Ukraine.”
The International Monetary Fund (IMF) has urged Tanzanian authorities to implement tax reforms to boost domestic revenue mobilization. This move would create the fiscal space necessary to finance social spending and priority investments, particularly in human capital, through increased spending on education and health.
In April, the IMF completed the first review of the Extended Credit Facility (ECF) program, resulting in the release of approximately $153 million for budget support. With this disbursement, Tanzania’s total access under the program reached around $304.7 million. The three-year program, amounting to $1.04 billion, was approved by the IMF board in July 2022, with an initial disbursement of about $151.7 million.
Tanzania’s economic recovery from the pandemic has been affected by both spillovers from the war in Ukraine and domestic factors. Economic growth slowed to an estimated 4.7 percent in 2022 from 4.9 percent in 2021.
However, the outlook for 2023 is more positive, with Tanzania’s economy expected to rebound to a growth rate of 5.2 percent. This recovery is attributed to the subsiding of global commodity price shocks and an improvement in the business environment.