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· The IMF approved US$567.25 million in emergency financial assistance under the Rapid Credit Facility and Rapid Financing Instrument to support Tanzania’s efforts in responding to the pandemic and addressing its severe shortage of foreign exchange
· This will play a catalytic role in the country’s efforts to mobilize additional support from development partners
· Authorities are also committed to strengthening governance and transparency to ensure that the financial resources are efficiently spent for addressing the crisis
The IMF approved US$567.25 million in emergency financial assistance under the Rapid Credit Facility and Rapid Financing Instrument to support Tanzania’s efforts in responding to the pandemic and addressing its severe shortage of foreign exchange. This will play a catalytic role in the country’s efforts to mobilize additional support from development partners. Authorities are also committed to strengthening governance and transparency to ensure that the financial resources are efficiently spent for addressing the crisis.
The Executive Board of the International Monetary Fund (IMF) approved a disbursement of SDR132.6 million (US$189.08 million) under the Rapid Credit Facility (RCF). Also, it approved a purchase equivalent to SDR265.2 million (US$378.17 million) under the Rapid Financing Instrument (RFI). These aggregate a total of SDR397.8 million (US$567.25 million or 100 percent of quota). This will help the East African country to tie up its immediate needs and will help the country to come out of the severe balance of payment crisis caused by the pandemic.
Tanzania’s economic outlook has deteriorated with the collapse in tourism in the wake of travel restrictions. The economy decelerated to 4.8 percent growth in 2020. The growth is expected to remain subdued in 2021 triggered by balance of payments crisis. The country needs about 1.5 percent of GDP to mitigate the effects of the pandemic and to preserve macroeconomic stability.
The Tanzanian authorities have indicated that they would comply with the requirements of the IMF. These include publishing reports of RCF and RFI resources spent and undertaking a post-crisis audit of all pandemic-related spending.
