The International Monetary Fund (IMF) has granted Tanzania a loan of 1.046 billion dollars (1.032 billion euros) over forty months, in particular to cope with the consequences of the war in Ukraine, according to a press release published on Monday 18 July. “The side effects of the war in Ukraine are delaying the gradual recovery of the Tanzanian economy”, already hard hit by the Covid-19 pandemic, notes the institution.
As a result, its experts believe that the country needs help to carry out reforms and thus “unlock its economic potential”. Tanzania is to immediately receive the equivalent of $151.7 million. It had already received a $567 million loan at the end of 2021 to meet the most urgent needs, when the health crisis had severely hampered its economic development, particularly in the tourism sector.
The war in Ukraine has caused food and fuel prices to soar. The rise in wheat prices is “particularly worrying”, writes the IMF in its report entitled “A new shock and little room for maneuver”. Because sub-Saharan Africa imports 85% of its cereal consumption, with particularly high amounts in Tanzania, Côte d’Ivoire, Senegal and Mozambique.
The program announced on Monday, which is part of the Extended Credit Facility (ECF), should help finance reforms to improve the country’s financial stability, carry out public investments and support the private sector. “Given Tanzania’s positive track record of implementing reforms, the executive directors supported the authorities’ requests for an ECF arrangement,” Bo Li, an IMF official quoted in the statement, said. Among other objectives, he also mentioned the importance of continuing vaccination campaigns on a larger scale.