Tanzania has received a significant financial boost from the International Monetary Fund (IMF) to tackle climate change and support economic growth.
The IMF’s executive board approved a $786.2 million loan on Thursday, alongside the disbursement of an additional $149.4 million for budget support.
The loan signifies Tanzania’s commitment to implementing economic reforms aimed at preserving financial stability, strengthening economic recovery, and achieving sustainable and inclusive growth, according to an IMF statement.
These reforms, undertaken by President Samia Suluhu Hassan’s administration over the past three years, aim to return the country’s economic growth to its pre-pandemic level of 6% to 7% real GDP.
The IMF commended Tanzania’s strong economic reform program, highlighting a rebound in economic growth in 2023 after a slowdown in 2022.
The Fund also noted a narrowing current account deficit due to fiscal consolidation, lower commodity prices, and stricter external financing conditions.
However, the IMF cautioned that Tanzania’s economic recovery faces challenges due to an unfavorable global economic environment.
Despite these headwinds, the Tanzanian economy, heavily reliant on tourism, mining, agriculture, and manufacturing, has demonstrated resilience in the face of extreme weather events and climate change, according to the World Bank.
This resilience is attributed to a surge in the services sector.
The Tanzanian government remains optimistic about economic growth, with Minister of State in the President’s Office for Planning and Investment Kitila Mkumbo forecasting an acceleration to 5.4% this year, up from 5.1% in 2023.
The IMF’s financial support is expected to play a crucial role in achieving these growth targets while mitigating the effects of climate change.
