IMF approves 1.17tri/- for TZ

TANZANIA: THE International Monetary Fund (IMF) has approved the immediate disbursement of 443.9 million US dollars (about 1.17tri/-) to Tanzania after successfully completing the latest reviews of the country’s economic reform programme

The Fund said Tanzania’s reform programme remains broadly on track, following the completion of the final reviews under the Extended Credit Facility (ECF) and the Resilience and Sustainability Facility (RSF).

The latest disbursement comprises 154.1 million US dollars (about 405.3bn/-) under the ECF arrangement and 289.7 million US dollars (about 762bn/-) under the RSF arrangement.

In its assessment, the IMF said Tanzania continued to record strong economic growth and low inflation, reflecting sustained macroeconomic stability despite domestic and external challenges.

Real Gross Domestic Product (GDP) growth reached 5.9 per cent in 2025, while growth is projected to average about 6.2 per cent over the medium term, supported by continued expansion in the mining, agriculture and tourism sectors.

Headline inflation remained contained at 4.0 per cent in June this year, although the IMF noted that rising global fuel prices were beginning to affect the economy.

The Fund also said Tanzania’s current account deficit is expected to remain broadly stable during the 2025/26 financial year, with increased gold exports helping to offset higher import costs resulting from the conflict in the Middle East.

However, it cautioned that downside risks to the country’s economic outlook have increased, warning that a prolonged conflict in the Middle East could weaken economic growth and intensify inflationary pressures.

“Against this backdrop, accelerated reform implementation is critical to promote inclusive and sustainable growth, while reform delays could weaken growth prospects and fiscal sustainability.

“Challenges to meet Sustainable Development Goal targets and reduce poverty remain daunting, especially considering that the population size is expected to double by 2050,” the IMF said.

Speaking after the Executive Board’s decision, IMF Deputy Managing Director and Acting Chair, Mr Bo Li, said Tanzania’s reform programme had enabled the country to maintain macroeconomic stability and advance key institutional reforms despite external and domestic shocks.

He said continued fiscal consolidation, supported by stronger domestic revenue mobilisation, Value Added Tax (VAT) refund reforms and improved public financial management, would create additional fiscal space for increased spending on priority sectors such as education and health while strengthening social safety nets to reduce poverty.

Mr Li also called for continued monetary policy prudence, saying the Bank of Tanzania should remain ready to adjust its policy stance when necessary. He said maintaining adequate foreign exchange reserves and exchange rate flexibility would help cushion the economy against external shocks.

He further urged Tanzania to accelerate reforms aimed at improving the business environment and supporting private sector development to create jobs and economic opportunities for the country’s rapidly growing population.

He also underscored the importance of strengthening climate resilience and mobilising climate finance to enhance long-term economic stability.

According to the IMF, Tanzania’s reform programme under the ECF remained broadly on track. All end-June 2025 quantitative performance criteria were achieved, while all endSeptember 2025 indicative targets were met except the domestic primary balance.

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At the end of December 2025, all quantitative performance criteria were achieved except the target on net domestic assets, for which the authorities requested a waiver. All continuous performance criteria were met.

The Fund said four structural benchmarks were implemented on schedule, while three others were completed with delays. Under the RSF arrangement, five reform measures for the third and fourth reviews were completed, although three reforms related to the energy sector remain outstanding.

The 40-month ECF arrangement, approved in July 2022 and later extended, was designed to support economic recovery, preserve macro-financial stability and promote sustainable and inclusive growth. The 23-month RSF arrangement, approved in June 2024 and subsequently extended, supports reforms aimed at reducing balance of payments risks and strengthening resilience to climate change.

Following the latest approval, Tanzania’s total access under the ECF arrangement has reached about 1.06 billion US dollars (approximately 2.79tri/-), while total financing under the RSF arrangement stands at about 636.5 million US dollars (around 1.67tri/-).