IMF puts COVID-19 related condition for Tanzania loan

The government of Tanzania has officially applied for more than $570 million loan from the International Monetary Fund to help in tackling economic challenges of the Covid-19 pandemic. The IMF has responded with conditions before the disbursement happens. Economic Analyst, Gabriel Mwang'onda joins CNBC Africa for more.

Wed, 23 Jun 2021 14:47:56 GMT

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AI Generated Summary

Tanzania's shift in international relations strategy from a nationalistic approach under the late President Magufuli to a more global integration under President Samia Suluhu Hassan.
The country's reliance on borrowing to finance development projects due to limited revenue sources, with the IMF and World Bank showing willingness to provide loans based on Tanzania's manageable debt levels.
The IMF's conditions for the $570 million loan include requirements related to Tanzania's handling of the COVID-19 pandemic, with concerns raised about the lack of transparency in reporting COVID-19 data.

The government of Tanzania has officially applied for a loan of over $570 million from the International Monetary Fund (IMF) to address the economic challenges brought about by the COVID-19 pandemic. In response to this request, the IMF has laid down certain conditions that need to be met before the funds can be disbursed. Economic Analyst Gabriel Mangonda sheds light on the situation. Mangonda highlights the shift in Tanzania's international relations strategy, especially under the leadership of the late President Magufuli and the current President Samia Suluhu Hassan. While Magufuli maintained a nationalistic economic approach, Hassan is striving to integrate Tanzania into the global community. This move aims to revive Tanzania's influence in regional and international affairs after a period of internal focus. One of the key issues facing Tanzania is its need for substantial funds to finance multiple large-scale projects simultaneously. With limited revenue sources from taxes and minimal grant funding, the country heavily relies on borrowing. The IMF and World Bank have shown readiness to lend to Tanzania, given the country's manageable debt levels and sustainable financial ratios. However, the IMF's conditions include requirements related to Tanzania's handling of the COVID-19 pandemic. While Tanzania had previously been criticized for lack of transparency in reporting COVID-19 data, recent statements from the Health Minister suggest that the government has maintained records but has not shared them widely. This data discrepancy could impact the loan negotiations, as international organizations like the CDC and WHO have raised concerns about the lack of information. The $570 million loan is crucial for Tanzania to continue funding its development projects and propel economic growth. With the government working to fulfill the IMF's conditions, the focus now shifts to ensuring transparency in COVID-19 data reporting and meeting the necessary requirements for the loan disbursement.