IMF approves $448 million disbursement as Tanzania’s economy gathers pace

Dar es Salaam. Tanzania’s economic reform efforts have received another significant boost after the Executive Board of the International Monetary Fund (IMF) completed key reviews of the country’s performance under ongoing support programmes, clearing the way for a fresh disbursement of about $448.4 million (approximately Sh1.17 trillion).

The IMF announced on Friday, June 27, that it had concluded the 2025 Article IV Consultation, the fifth review under the Extended Credit Facility (ECF) arrangement, and the second review under the Resilience and Sustainability Facility (RSF) arrangement with Tanzania.

Completion of the reviews enables an immediate disbursement of around $155.7 million under the ECF and $292.7 million under the RSF, bringing the country’s cumulative access under these facilities to more than $1.25 billion.

According to the IMF, Tanzania’s economy has continued to recover strongly, with real GDP growth reaching 5.5 percent in 2024 and projected to accelerate to 6.0 percent this year and 6.5 percent over the medium term.

The performance reflects robust export growth, stable inflation, and a narrowing current account deficit.

“Tanzania’s reform programme supported by the ECF remains broadly on track. Amid downside risks and daunting challenges to reduce poverty, the authorities’ strong commitment to reform implementation, as well as continued engagement and capacity support by development partners, are critical,” said Mr. Kenji Okamura, IMF deputy managing director and acting chair.

The Fund noted that Tanzania’s authorities met all quantitative targets and most structural benchmarks for the review period, although there were delays in implementing some reforms, including the Secured Transaction Act, which has been rescheduled to February 2026.

Positive outlook

Despite positive economic signals, the IMF cautioned that risks to Tanzania’s outlook remain, including an uncertain global environment, declining aid flows, and potential delays in reforms.

The country’s population is also projected to double by 2050, adding further pressure on resources and efforts to reduce poverty.

The IMF welcomed the government’s intention to resume growth-friendly fiscal consolidation in the 2025/26 financial year.

This, it said, will require improved revenue collection, strict expenditure controls, and prudent budget management, especially in an election year.

Inflation has remained stable at 3.2 percent as of April 2025, below the Bank of Tanzania’s target, while the central bank has maintained a neutral or mildly supportive monetary policy.

The IMF encouraged further exchange rate flexibility to help cushion the economy against external shocks and supported the continued strengthening of financial sector supervision.

They concurred that stepped-up efforts to enhance domestic revenue mobilization in line with the recently approved medium term revenue strategy, and to strengthen public financial and investment management, will be critical to create space for priority development needs and safeguard debt sustainability.

The Fund further called for prudent budget execution in an election year and enforcement of commitment controls to control spending. They welcomed the continued progress in reducing domestic arrears.

Focus on human capital and private sector growth

The IMF underscored the need for accelerated reforms to enhance private sector development, improve the business climate, and create jobs. It called for greater investment in human capital, particularly in education and health, to support sustainable and inclusive growth.

“Tanzania’s medium-term outlook is favourable, contingent on decisive reform implementation, particularly to strengthen the business environment and support a more dynamic private sector,” the IMF stated.

The Fund also commended Tanzania’s progress in climate-related reforms under the RSF, aimed at enhancing resilience to climate change and reducing balance-of-payments risks.

The IMF’s next Article IV consultation with Tanzania is expected in line with the Fund’s regular consultation schedule for countries with active financing programmes.