This archive report was first published on 16 June 2020.
On June 10, the IMF Executive Board approved $14.3 million in debt relief to cover Tanzania's debt service falling due to the international lender for four months, from June 10 to October 13. Additional relief covering the next 23 months from October 14 to April 13, 2022 will be granted subject to the availability of resources in the Catastrophe Containment and Relief Trust.
The IMF's Catastrophe Containment and Relief Trust provided Tanzania with $25.7 million to cover debt service and fund measures to fight the Covid-19 pandemic. The funds will help alleviate Tanzania's balance of payment issues stemming from the pandemic.
The Covid-19 pandemic has weakened Tanzania's near-term macroeconomic prospects, with the country experiencing a drastic reduction in tourism receipts, budget pressures, and a projected deceleration of GDP growth from over six per cent to four per cent in the current fiscal year and to 2.8 per cent in the upcoming fiscal year from July 2020.
IMF Deputy Managing Director Tao Zhang stated, "The Covid-19 pandemic is having an adverse economic impact on Tanzania, creating an exceptional fiscal and balance of payments needs. The authorities have implemented containment measures and avoided an economic lockdown. They remain vigilant to the risk of spiralling infections and uncertainty surrounding the pandemic."
On April 23, President John Magufuli called on the World Bank and other international lenders to write off debts owed by African countries, instead of giving loans to fight the pandemic.
According to a World Bank report, Tanzania's economy will suffer the effects of the Covid-19 pandemic and global economic crisis. The report forecasts the country's economic growth to sharply slow to 2.5 per cent in 2020 from the 6.9 per cent growth the government reported in 2019.
