WASHINGTON,
USA
The Executive Board of the International Monetary Fund (IMF) today September 7, approved an emergency financing of US$567.25 million (Tsh 1.315 trillion) to the government of Tanzania to help finance the country’s urgent balance of payment needs stemming from the outbreak of the COVID-19 pandemic.
The support
comes in two categories; disbursement of US$189.08 million under the Rapid Credit Facility (RCF)
and a purchase equivalent to US$378.17 million) under the Rapid Financing Instrument (RFI).
Tanzania’s
economic outlook has deteriorated due to the impact of the COVID-19 pandemic.
With the
collapse in tourism in the wake of travel restrictions, the economy reportedly
decelerated to 4.8 percent growth in 2020, and growth is expected to remain
subdued in 2021.
The East
African country faces an urgent balance of payment need of about 1.5 percent of
GDP as the authorities implement a comprehensive plan to mitigate the effects
of the pandemic and preserve macroeconomic stability in the face of a reported
third wave of the virus.
According to
a press release issued by IMF, the disbursement under the RCF and purchase
under the RFI will help finance the interventions needed to mitigate the severe
socio-economic impacts of the pandemic and help catalyse support from
development partners.
The
authorities have indicated that they are committed to pursuing economic
policies appropriate for addressing the impact of the pandemic and are
committed to strengthening coordination and transparency to ensure that RCF and
RFI resources are spent on fighting the pandemic. These measures include
publishing reports of RCF and RFI resources spent and undertaking a post-crisis
audit of all pandemic-related spending.
Following
the Executive Board’s discussion, Deputy Managing Director and Chair, Mr. Bo
Li, said in a statement that "The COVID-19 pandemic has negatively
impacted Tanzania’s macroeconomic outlook, and the health and wellbeing of its
population.”
"The
authorities are implementing a comprehensive pandemic response plan ‘Tanzania
COVID-19 Socioeconomic Response Plan (TCRP)’ to address the fallout of the
COVID-19 shock. Tanzania requires urgent financial assistance to implement the
plan and avert the severe health, social and economic consequences of a
reported third wave of the virus.
He said
that emergency support under the Rapid Credit Facility and Rapid Financing
Instrument will substantially contribute to filling immediate external
financing needs and help catalyse donor support.
“Temporarily
loosening macroeconomic and financial policies will mitigate the pandemic’s
adverse impact, by deploying a vaccination campaign, increasing health and
social spending, and supporting the private sector.” He said adding that
prioritizing the health response, strengthening coordination and transparency
to ensure that funds received are spent on fighting the pandemic, and regularly
and transparently reporting epidemiological data will be critical for the
plan’s success.
"Once
the crisis abates, the authorities appropriately intend to resume implementing
reforms to achieve sustainable and inclusive growth. Their broader policy and
reform agenda includes fiscal reforms to avoid domestic arrears and pay tax
refunds on time, increasing support for education and health spending, and
improvements to the business climate."
For the
first time in more than a year, Tanzania released figures on corona virus in
June, confirming 100 cases since a third wave of infections began.
President Samia
Hassan said the country has budgeted $450 million to buy covid-19 vaccine; the
actions that marked a sharp turn from Hassan’s predecessor, the late John
Magufuli who downplayed the pandemic.
Tanzania received the first consignment of over one million doses of Johnson & Johnson COVID-19 vaccines from the United States as part of the COVAX arrangement in July and has fully vaccinated 304,603 people (0.54% of the population). - Africa
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