The International Monetary Fund (IMF) has approved a USD 448 million (approximately Sh 1.17 trillion) loan for Tanzania, providing a major boost to the country’s ongoing economic reform efforts. The disbursement follows the IMF Executive Board’s completion of the fifth review under the Extended Credit Facility (ECF) arrangement and the 2025 Article IV Consultation, signaling confidence in Tanzania’s economic trajectory and its commitment to fiscal and structural reforms.
On Friday, June 27, the IMF announced the conclusion of the 2025 Article IV Consultation, the fifth review of Tanzania’s ECF programme, and the second review under the Resilience and Sustainability Facility (RSF). These programmes are designed to support macroeconomic stability, provide medium-term financial assistance to low-income countries facing persistent balance of payments challenges, and promote inclusive growth.
With these reviews finalized, Tanzania is now eligible for an immediate disbursement of approximately USD 155.7 million under the ECF and an additional USD 292.7 million under the RSF. This latest release brings the total amount accessed by Tanzania through these arrangements to over USD 1.25 billion.
According to the IMF, Tanzania’s economy has maintained a strong recovery trajectory, with real GDP growth reaching 5.5 percent in 2024. Growth is projected to rise to 6.0 percent in the current year and 6.5 percent in the medium term. This positive outlook is attributed to solid export performance, controlled inflation, and a steadily improving current account balance.
“Tanzania’s reform programme supported by the ECF remains broadly on track. Amid downside risks and daunting challenges to reduce poverty, the authorities’ strong commitment to reform implementation, as well as continued engagement and capacity support by development partners, are critical,” said IMF Deputy Managing Director and Acting Chair, Kenji Okamura.
The 40-month ECF arrangement, initially approved in July 2022 for a total access of about USD 1.046 billion, was extended by six months in June 2024. It aims to support economic recovery, preserve macro-financial stability, and promote sustainable and inclusive growth. The 23-month RSF arrangement, approved in June 2024, supports reforms to reduce balance of payments risks and enhance resilience to climate change.
The IMF noted that Tanzania’s reform programme under the ECF remains on track. All end-December 2024 quantitative performance criteria and indicative targets were met, and two structural benchmarks were completed on time. Two of the three end-March benchmarks were delayed, and the Secured Transaction Act has been reset to end-February 2026. Despite challenges, all five reform measures for this review were implemented.
Economic activity continues to gain momentum, with real GDP growth at 5.5 percent in 2024. Headline inflation remained stable at 3.2 percent in April 2025, below the central bank’s target. A neutral or mildly stimulative monetary policy was maintained, and exchange rate flexibility increased.
The banking sector remains resilient, though pockets of vulnerability persist. Fiscal balance weakened in the third quarter of 2025, prompting the government to delay lower-priority spending in the fourth quarter. The current account deficit narrowed to 2.6 percent of GDP in 2024, down from 3.8 percent in 2023, driven by strong export performance.
The IMF stated that the medium-term outlook is favorable, contingent on sustained reform implementation, particularly to strengthen the business environment and support a more dynamic private sector. However, risks remain, including challenges in meeting Sustainable Development Goals (SDGs) and reducing poverty, especially with the population expected to double by 2050.
Okamura welcomed Tanzania’s plan to resume growth-friendly fiscal consolidation in FY25/26, emphasizing the need for steadfast implementation of revenue measures, strict cash management, and commitment controls. He also stressed the importance of contingency measures to address potential budget overruns in FY24/25 and the decisive implementation of fiscal reforms to meet development needs while maintaining debt sustainability.
He added that continued efforts are needed to fully operationalize the new interest rate-based monetary policy framework. Improvements in liquidity forecasting, operation of standing facilities, and addressing segmentation and counterparty credit risk in the interbank market are essential. The recent increase in exchange rate flexibility is a positive step and should remain a key pillar of the new framework. Upgrading financial supervision will further enhance stability and deepen financial markets.
Amid strong demographic pressures, achieving resilient and inclusive long-term growth requires accelerated human capital development through increased and more efficient public spending on education and health. Structural reforms in public sector governance, business regulation, access to finance, and climate change adaptation are also critical to foster private sector development, job creation, and economic resilience.
The IMF Executive Board welcomed Tanzania’s robust growth, subdued inflation, and improved external balance. While the medium-term outlook is favorable, they noted downside risks from an uncertain external environment, declining aid flows, and potential delays in reform implementation. They emphasized that Tanzania’s commitment to reforms under the ECF and RSF programmes is vital to safeguard macro-financial stability and achieve inclusive growth.
Board members called for enhanced domestic revenue mobilization in line with the newly approved medium-term revenue strategy and stronger public financial and investment management. They urged prudent budget execution during the election year and enforcement of commitment controls. Continued progress in reducing domestic arrears was also welcomed.
Finally, the IMF Directors called for accelerated structural reforms to promote sustainable, private sector-led growth and job creation. They urged Tanzanian authorities to improve tax administration efficiency, ease regulatory burdens, promote access to finance, close gender gaps, and upgrade infrastructure. They also stressed the need to boost human capital through increased and efficient public spending on education, health, and social safety nets.
