The International Monetary Fund (IMF) has reached a new agreement with Tanzania that could unlock $375.5 million in fresh funding as the East African nation faces growing economic pressure linked to the conflict involving Iran.
A high-level IMF delegation led by Nicolas Blancher visited Tanzania for talks linked to the sixth and seventh reviews of the institution’s financing program with the government.
Following the discussions, the IMF announced a staff-level agreement recommending the release of about $375.5 million once approved by the institution’s Executive Board.
If approved, Tanzania’s total IMF support under the current program would rise to nearly $1.6 billion.
The latest package would also push Tanzania’s overall public debt closer to the $50 billion mark, according to recent economic estimates that place the country’s debt between $45 billion and $50 billion.
That debt includes borrowing from institutions such as the IMF, the World Bank, Chinese lenders, domestic borrowing, and commercial financing.
Despite the growing debt burden, the IMF described Tanzania’s economy as stable and resilient.
The institution said key economic targets under the current program had largely been achieved, with inflation remaining relatively low compared to many countries affected by the global energy crisis.
The IMF also praised Tanzania for maintaining sufficient foreign exchange reserves and increasing spending on health and education.
However, the organization warned that the ongoing Middle East conflict involving the United States, Israel, and Iran continues to create serious risks for import-dependent economies across Africa.
Global oil prices have risen sharply since the conflict escalated, increasing transport costs and pushing up prices of goods and services in many countries.
Tanzania has also faced shortages and higher prices for agricultural inputs such as fertilizer, raising concerns about food production and inflation.
The IMF said disruptions to global shipping routes and air transport could further affect Tanzania’s tourism, agriculture, and transport sectors if the crisis continues.
Blancher praised Tanzanian authorities for allowing domestic fuel prices to adjust according to global market conditions and for permitting foreign exchange rates to be increasingly determined by supply and demand.
The IMF expects Tanzania’s economy to grow by around 5.9% this year, while inflation is projected to rise to approximately 4.7%.
Economists say the IMF package is important not only for direct financial support but also because it boosts confidence among international investors and lenders.
The recommendation now awaits final approval from the IMF Executive Board before the funds can officially be released to Tanzania.
