The COVID-19 pandemic has negatively impacted Tanzania’s macroeconomic outlook. The Tanzanian authorities are implementing a comprehensive emergency pandemic response plan to help mitigate the significant socioeconomic and health effects of the crisis, resulting in an ongoing urgent balance of payments need.
The COVID-19 pandemic has negatively impacted Tanzania’s macroeconomic outlook, and negatively impacted its population’s health and well-being. Tourism collapsed 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 previous government downplayed the presence of the COVID-19 virus in Tanzania and the impact of the pandemic in the country, and budgeted insufficient resources to address the health and economic crisis. This has left the new administration of President Hassan with an enormous and urgent challenge to tackle the COVID-19 pandemic. The new administration is implementing comprehensive plans to immediately address the pandemic, resulting in an urgent balance of payments need.
This paper discusses the United Republic of Tanzania’s Request for Debt Relief Under the Catastrophe Containment and Relief Trust. IMF debt service relief will help free up resources for public sector health needs and other emergency spending, as well as mitigate the balance of payments shock resulting from the pandemic. Given the risks ahead, it would be important to ensure close cooperation with multilateral organizations and donors and ensure enough budget allocations on health and other priority spending. The authorities are committed to using the additional resources for their intended purposes and in a transparent manner, including through ex-post audits of corona virus-related spending. To deal with the remaining risks, it will be important to safeguard appropriate funding for health and other priority social spending in the FY2020/21 budget, as well as ensure close cooperation with the World Health Organization, multilateral agencies, and donors. The focus includes addressing arrears on value-added tax refunds and government expenditures, enhancing human capital and the business environment, and improving the affordability of bank credit.
This paper discusses Cote d’Ivoire’s Sixth Review Under the Arrangement of the Extended Credit Facility and the Extended Arrangement Under the Extended Fund Facility, and Request for Extension and Augmentation of Access. Côte d’Ivoire has been pursuing a development-oriented policy agenda, and the IMF-supported program in place since 2016 has supported that focus, paving the way for the private sector to become the main driver of growth. The performance under the program has been strong. The medium-term growth prospects remain robust, predicated on continuing prudent macroeconomic policy, furthering financial sector reforms and sustaining structural reforms to bolster private sector-led inclusive growth. Côte d’Ivoire’s reform efforts have resulted in improvements in its business climate in recent years. It will be imperative to continue the reform agenda to further stimulate private sector activity and support inclusive growth, including by improving the energy sector, human capital and financial inclusion, accelerating digitalization, enhancing trade connectivity and governance, expanding the coverage of social safety nets, and reinforcing the statistical apparatus to help better inform economic policy.
This IMF Staff Report highlights that the robust economic growth in Côte d’Ivoire is projected to continue in 2018. The inflation remains subdued. The program aims to achieve a sustainable balance of payments position, foster inclusive growth and poverty reduction, and create fiscal space for investing in priority infrastructure and social projects. Strong economic performance since 2012, with average annual growth of 9 percent, reflected the economic recovery following political normalization, improved business environment, strong program of reforms, and supportive fiscal policy. A key policy challenge is to sustain robust growth and make it more inclusive and private sector-driven. Robust medium-term growth is expected to be supported by domestic demand.
This paper discusses Tanzania’s Seventh Review Under the Policy Support Instrument (PSI). Program performance under the PSI has been broadly satisfactory. Most quantitative targets for June and September 2017 were met. Although progress in structural reforms has been mostly slow, efforts have been boosted to advance them. Macroeconomic policies will need to be closely coordinated. After recording a small fiscal surplus in July–September against a programmed deficit, the government is planning to step up budget implementation, particularly in development spending. The monetary policy stance and liquidity forecasting and management will need to be closely coordinated with fiscal developments. Strong growth and job creation are needed to address high poverty and a large underemployed youth population.
This paper discusses Tanzania’s Sixth Review Under the Policy Support Instrument (PSI) and Request for a Six-Month Extension of the PSI. Tanzania’s macroeconomic performance has been strong, albeit with a recent deceleration in economic growth. Program performance under the PSI has been broadly satisfactory. Most quantitative targets for December 2016 and March 2017 were met. Although progress in structural reforms identified under the program has been generally slow, the authorities have stepped up efforts to advance them. The IMF staff supports the authorities’ request for a 6-month extension of the PSI arrangement and recommends completion of its sixth review.
This paper discusses Tanzania’s Fifth Review Under the Policy Support Instrument (PSI). Tanzania’s macroeconomic performance remains strong. Economic growth was robust during the first half of 2016. Inflation came down below the authorities’ target of 5 percent and is expected to remain close to the target, while the external current account deficit was revised down on account of lower imports of capital goods. Nevertheless, there are risks that could adversely affect economic growth going forward, emerging from the currently tight stance of macroeconomic policies, slow implementation of public investment, and private sector uncertainty about the government’s new economic strategies. The IMF staff recommends completion of the fifth review under the PSI.
PRGT-eligible members make considerable use of Fund concessional financing. Since 2010, 56 percent of Fund arrangements have involved a PRGT-facility. This paper examines a number of issues raised by Executive Directors and the International Monetary and Financial Committee (IMFC) since the issuance to the Board of the June 2015 staff paper on enhancing the financial safety net for developing countries (IMF, 2015a). This paper concludes that there is a need to clarify guidance in some areas pertaining to PRGT policies. This will be done through an early revision of the LIC Handbook, which is already underway. The paper does not propose changes to the Fund’s concessional facilities at this juncture. A comprehensive review of PRGT (Poverty Reduction and Growth Trust) resources and facilities is planned for 2018.