Tanzania kneels for IMF loan to tackle COVID-19 consequences

By Our Correspondent, DODOMA Tanzania

The government of Tanzania has officially applied for a Tsh. 1.3 Trillion ($571 million) loan from the International Monetary Fund (IMF) to help tackling  the Covid-19 pandemic economic challenges.

Minister for Finance and Planning, Mwigulu Nchemba (pictured above) told the press here Thursday June 17 that the application had been lodged.

“We have submitted the application to IMF within the specified time. But I will provide detailed information in the near future.” He said. 

Tuesday, June 15, was the deadline by which to apply for the funds.

Tabling the government’s TSh36.3 trillion 2021/22 budget in Parliament on June 10, the Minister told the parliament that the requested funds were a low-interest loan aimed at tackling the social and economic impacts of the Covid-19 pandemic.

ALSO READ: Tanzania must publish covid-19 data to unlock IMF loan 

Early this month, IMF made it clear to the government that in order to approve a $571 Million emergency loan from the Washington-base lender, the Tanzania has to publish data on the spread of Covid-19.

Reporting numbers on coronavirus infections and deaths would be an about turn for the government that hasn’t done so since May last year when the then President John Magufuli’s administration played down the threat from the disease.

By May 2020, the reported data showed that Tanzania had 509 cases with 19 deaths and the government hasn’t yet updated numbers on the disease.

Since Magufuli's death in March, new leader Samia Hassan has signaled a shift in policy by appointing an advisory team on how to tackle the pandemic and started a process to procure vaccines. 

“Publication of such data would be a precondition of moving ahead,” said Jens Reinke, the IMF’s resident representative in Tanzania. “In order to justify emergency financing in the context of the pandemic, you need to publish relevant public-health data.”

The government first asked the IMF for a loan under its Rapid Credit Facility in March last year, he said by phone. 

Negotiations never progressed, and the government said last month it had revived the request.

Tanzania could access as much as $571 million given its current IMF quota, or double that if the lender’s board approves a proposed new general allocation of special drawing rights to further help countries deal with the consequences.   of the pandemic.

The nation doesn’t face an immediate balance of payments crisis, so Hassan’s administration would seek to justify the request on the basis of needing to finance its response to the impact of Covid-19. Early talks have started, said Reinke.

“We are exploring ways for the financing to go toward the government response to the public-health crisis, and maybe also to support vulnerable sectors like tourism,” he said, adding that the previous government had neglected investment in other sectors like health, education, and sanitation." He said. 

Tanzania government early this month approved the importation of Covid-19 vaccines to the country for the first time.

President Hassan announced that international organizations and embassies are now allowed to bring in the vaccines so that their employees and citizens can receive the jabs.

"Embassies and International Organizations have been allowed to bring in the vaccine for their citizens and workers to comply with the procedures of their countries and organizations as well as to eliminate disturbance in their work because of not being vaccinated," she said.