Over $900 million is approved by the IMF to strengthen Tanzania’s budget and tackle climate change

In addition to concluding a separate study permitting the transfer of $149.4 million for budget support, the IMF said on Thursday that its executive board had approved funding for Tanzania totaling $786.2 million to address climate change.

The International Monetary Fund stated in a statement that Tanzanian authorities are dedicated to carrying out reforms in order to maintain macro-financial stability, bolster economic recovery, and foster sustainable and inclusive growth.

The administration of President Samia Suluhu Hassan has implemented a number of economic changes over the past three years in an effort to bring the nation’s real gross domestic product growth rate back to the six to seven percent range observed prior to the pandemic.

The IMF stated that Tanzania’s economic reform program was still robust and that the country’s economy expanded faster in 2023 after contracting in 2022.

“The current account deficit is narrowing, reflecting fiscal consolidation, easing commodity prices, and tight external financing conditions,” the International Monetary Fund stated.

Although further economic recovery is anticipated to pick up speed, the IMF pointed out that it was confronted with challenges from a “unfavourable global economic environment.”

According to the World Bank, Tanzania’s economy—which is based on tourism, mining, agriculture, and manufacturing—has persevered in the face of repeated catastrophic weather events and climate change because of a growth in the services sector.

As of last week, Kitila Mkumbo, the minister of state in the president’s Office for Planning and Investment, predicted that the economy will grow by 5.4% this year, compared to 5.1% in 2023.