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The International Monetary Fund (IMF) has reached a staff-level agreement with Tanzania to unlock $375.5 million in financing to help the nation navigate economic pressures caused by conflict in the Middle East.
This agreement, which follows a review of the country’s economic performance, confirms that Tanzania has met its programme objectives, including maintaining robust growth and stable inflation.
Once formally approved by the IMF board, the total disbursement under the current support programme will exceed $1.6 billion.
The IMF noted that while Tanzania’s international reserves remain adequate and public spending on social services has increased, the country is facing significant fallout from the regional war involving Iran.
Spiking fuel prices and fertiliser shortages are creating hurdles for the domestic economy.
The lender praised the Tanzanian government’s commitment to a flexible exchange rate and its decision to allow global fuel price increases to pass through to domestic consumers to maintain fiscal balance.
Looking ahead to 2026, the IMF projects GDP growth to remain at 5.9 per cent, though it warned that inflation could rise to 4.7 per cent due to external pressures.
The report emphasised that high energy costs and disruptions to global value chains and aviation will likely strain the agriculture, tourism, and transportation sectors.
Despite these challenges, the IMF lauded the government’s efforts to strengthen climate resilience and maintain a stable macroeconomic environment amid global volatility.
