IMF approves US$443.9 Million for Tanzania, commends strong economic growth and reform progress

BY DIRAMAKINI

THE Executive Board of the International Monetary Fund (IMF) has completed the sixth and seventh reviews under Tanzania's Extended Credit Facility (ECF) arrangement and the third and fourth reviews under the Resilience and Sustainability Facility (RSF) arrangement, paving the way for the immediate disbursement of SDR 326.49 million (approximately US$443.9 million).

The approval marks the successful completion of both IMF-supported programmes, which have helped Tanzania maintain macroeconomic stability, strengthen economic institutions, and advance structural reforms aimed at promoting sustainable and inclusive economic growth.

According to the IMF, Tanzania has continued to demonstrate strong economic performance despite global economic uncertainties. The country's real Gross Domestic Product (GDP) expanded by 5.9 percent in 2025, with growth projected to rise to around 6.2 percent over the medium term, supported by strong performances in the mining, agriculture, and tourism sectors.

Under the latest decision, Tanzania will immediately receive SDR 113.37 million (about US$154.1 million) through the Extended Credit Facility, bringing total disbursements under the programme to approximately US$1.063 billion.

In addition, the country will receive SDR 213.12 million (about US$289.7 million) under the Resilience and Sustainability Facility, increasing total financing under the facility to approximately US$636.5 million.

The IMF noted that the 40-month ECF arrangement, approved in July 2022 and subsequently extended in June 2024 and May 2026, was designed to support Tanzania's economic recovery, preserve macro-financial stability, and promote sustainable and inclusive growth.

Meanwhile, the 23-month RSF arrangement, approved in June 2024 and later extended by three months in May 2026, supports reforms aimed at reducing balance of payments risks while strengthening the country's resilience to climate change.

The Fund stated that Tanzania's economic reform programme has remained broadly on track. All quantitative performance criteria set for June 2025 were met, while most indicative targets for September and December 2025 were also achieved, except for a limited number relating to the domestic primary balance and net domestic assets, for which the authorities requested a waiver.

The IMF further reported that all continuous performance criteria were met. Four structural benchmarks were implemented on schedule, while three were completed with delays. Five reform measures under the RSF programme were successfully achieved, although three energy-sector reforms remain outstanding.

Despite increasing pressure from higher global fuel prices, Tanzania has maintained low inflation, with headline inflation standing at 4.0 percent year-on-year in June 2026. The IMF observed that rising gold exports have helped offset import pressures associated with the ongoing conflict in the Middle East, keeping the current account deficit broadly stable.

However, the Fund warned that downside risks to the economy have increased. A prolonged conflict in the Middle East could weaken economic growth prospects, intensify inflationary pressures, and increase external vulnerabilities.

Commenting after the Board meeting, Mr. Bo Li, IMF Deputy Managing Director and Acting Chair, praised Tanzania for maintaining macroeconomic stability amid domestic and external shocks.

He said the country's reform programme had strengthened economic policy frameworks and institutions while emphasizing the importance of continued fiscal discipline, stronger domestic revenue mobilization, improved public financial management, and accelerated structural reforms to achieve the objectives of Tanzania Vision 2050.

Bo Li also stressed the need to expand investment in education and healthcare, strengthen social protection programmes to reduce poverty, and maintain debt sustainability through prudent fiscal management.

He further encouraged the Bank of Tanzania to remain vigilant in responding to inflationary pressures while maintaining adequate foreign exchange reserves, exchange rate flexibility, and continued reforms to strengthen central bank governance and financial sector supervision.

The IMF concluded that accelerating reforms to improve the business environment, promote private sector investment, and strengthen climate resilience will be essential to creating more jobs, supporting long-term economic growth, and ensuring Tanzania remains resilient to future external shocks.