IMF Approves Over $900 Million To Support Tanzania Budget, Climate Change Fight

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The International Monetary Fund (IMF) said on Thursday that its executive board has approved the sum of $786.2 million in funding for Tanzania to help tackle climate change.

The organization also said it also approved a separate review allowing for the disbursement of $149.4 million for budget support.

IMF in a statement said Tanzanian authorities are committed to continue implementing reforms to preserve macro-financial stability, strengthen economic recovery, and promote sustainable and inclusive growth.

It said in the last three years, President Samia Suluhu Hassan’s administration has undertaken various economic reforms with ambitions to return the country’s economic growth to the pre-pandemic real gross domestic product growth rate of 6% to 7%.

The IMF added that Tanzania’s economic reform program remained strong, adding that economic growth rebounded in 2023 after slowing down in 2022.

“The current account deficit is narrowing, reflecting fiscal consolidation, easing commodity prices, and tight external financing conditions,” the IMF said.

While economic recovery is expected to gain momentum going forward, the IMF noted that it faced headwinds from an “unfavourable global economic environment.”

Tanzania’s economy, which relies on tourism, mining, agriculture and manufacturing, has remained resilient in the face of back-to-back extreme weather events and climate change, driven by a surge in the services sector, according to the World Bank.

The economy is forecast to accelerate to 5.4% this calendar year, up from 5.1% in 2023, minister of state in the president’s Office for Planning and Investment Kitila Mkumbo said last week.