WASHINGTON — The Executive Board of the International Monetary Fund (IMF) completed today the final sixth and seventh reviews of the Extended Credit Facility (ECF) arrangement and final third and fourth reviews of the Resilience and Sustainability Framework (RSF) arrangement.
Completion of the sixth and seventh reviews under the ECF arrangement allows the immediate disbursement of SDR 113.37 million (28.5 per cent of quota – about US$ 154.1 million), bringing Tanzania’s total access under the ECF arrangement to about US$ 1,063 million. Completion of the third and fourth reviews under the RSF arrangement allows the immediate disbursement of SDR 213.12 million (53.5 per cent of quota – about US$ 289.7 million), bringing Tanzania’s total access under the RSF arrangement to about US$ 636.5 million.
The 40-month ECF Arrangement with Tanzania for total access of SDR 795.58 million (200 per cent of quota – about US$ 1,046 million at the time of program approval) was initially approved in July 2022, and extended by 6 months in June 2024 and by 3 months in May 2026. The arrangement aims to support economic recovery, preserve macro-financial stability, and promote sustainable and inclusive growth. The 23-month RSF arrangement with Tanzania, approved in June 2024 (150 per cent of quota) and extended by 3 months in May 2026, supports the authorities’ reforms to reduce prospective balance of payments risks and enhance economic resilience to climate change.
Tanzania’s economic reform program under the ECF arrangement remained on track. All end-June 2025 quantitative performance criteria (QPC) were met. All end-September 2025 indicative targets were met, except the domestic primary balance. At end-December 2025, all QPCs were met, except for the QPC on net domestic assets, for which the authorities requested a waiver. All continuous PCs were met. Four structural benchmarks were implemented on time, and three other structural benchmarks were implemented with delay. Five reform measures (RMs) for the third and fourth reviews under the RSF arrangement were completed, while three RMs related to the energy sector were not completed.
Tanzania has continued to record strong economic growth and low inflation, but the impact of rising fuel prices is emerging. GDP growth reached 5.9 per cent in CY25. Headline inflation has been contained at 4.0 per cent (year-on-year) in June 2026, but the impact of rising fuel prices continues to be felt. Despite significant fiscal over-spending in the first quarter of FY2025/26, the end-December QPC for the domestic primary balance was met. The current account deficit is expected to remain broadly stable in FY2025/26, with gold exports providing a partial offset to import pressures from the war in the Middle East.
While the medium-term outlook is positive, downside risks have increased. In particular, a prolonged conflict in the Middle East would weaken the growth outlook and intensify inflation pressures. Against this backdrop, accelerated reform implementation is critical to promote inclusive and sustainable growth, while reform delays could weaken growth prospects and fiscal sustainability. Challenges to meet SDG targets and reduce poverty remain daunting, especially considering that the population size is expected to double by 2050.
At the conclusion of the Executive Board’s discussion, Bo Li, Deputy Managing Director, and Acting Chair, made the following statement:
“Amid external and domestic shocks, Tanzania’s reform program supported by the Extended Credit Facility (ECF) has enabled the authorities to maintain macroeconomic stability and advance reforms. Macroeconomic stability has been preserved, with strong economic activity and low and stable inflation. Reforms have helped strengthen economic policy frameworks and institutions, notwithstanding the recent non-approval of VAT administration, central bank governance, and public investment management reforms. In that context, the authorities’ commitment to implement measures towards the program’s objectives is welcome, complemented by continued macroeconomic policy prudence, and accelerated structural reforms can help Tanzania reach the objectives of Vision 2050.
“Continued fiscal consolidation, supported by stronger domestic revenue mobilization, VAT refund reforms, and improved public financial management, remains important. Such efforts would create space for much needed spending on education and health. Strengthening social safety nets to reduce poverty is also paramount. In the medium term, further fiscal reforms will be critical for Tanzania to reach its development goals and maintain debt sustainability.
“Accommodative monetary policy remains appropriate, and the Bank of Tanzania should stand ready to further adjust its stance as needed. Persistent inflation pressures resulting from a prolonged fuel supply shock merit close attention. At the same time, maintaining adequate reserve levels and exchange rate flexibility will help cushion the economy against external shocks, as will further progress to enhance central bank independence and upgrade the financial supervisory framework.
“To ensure sufficient jobs and opportunities for Tanzania’s rapidly growing population, accelerated reforms to strengthen the business environment and support private sector development are critical. Continued reforms to further strengthen resilience to climate change and help mobilize climate finance will also be important to enhance broader economic resilience and reduce prospective balance of payments risks.” —IMF
