East AfricaIMF Grants Tanzania a $372.4 million Zero Rated Loan

The International Monetary Fund (IMF) has approved a zero-rated $372.4 million loan for Tanzania, aimed at supporting the country’s COVID-19 pandemic relief measures.

President Suluhu this week hosted the World Bank’s Managing Director for Development Policy and Partnerships Mari Pangestu at State House in Dar es Salaam, in what officials described as a follow-up to the face-to-face talks she held with the bank’s president David Malpass on the sidelines of the UN General Assembly in New York in September.

The latest IMF loan will be issued through the Fund’s Rapid Credit Facility (RCF) and is part of a $567.25 million package released in September under a blended RCF/Rapid Financing Instrument (RFI) programme.

While the RFI part of the loan remains non-concessional, the RCF disbursement will allow Tanzania to “take full advantage of its new eligibility to borrow from the fund on fully concessional terms,” the IMF said in a statement.

The IMF says the RCF disbursement will “help address Tanzania’s urgent balance of payment needs arising from the COVID-19 pandemic and provide it with concessional resources needed to take measures to mitigate the severe socio-economic impact of the pandemic.”

According to the IMF, recent reporting of Covid-19 data in Tanzania has indicated “an increase in the number of cases amid a third wave of the virus” while travel services receipts and travel arrivals continue to remain below pre-pandemic levels collapse in tourism in the wake of travel restrictions, growth reportedly decelerated to 4.8 per cent in 2020, and economic performance is expected to remain subdued in 2021,” the fund said.

Mr Li however sad the country’s risk of external and public debt distress remained moderate.

The country’s economic outlook has deteriorated due to the impact of the COVID-19 pandemic, with the growth expected to remain subdued in 2021.

Last year, the country’s economy reportedly decelerated to 4.8% growth, mainly due to the collapse in tourism activities in the wake of travel restrictions.

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