IMF Approves $786.2 Million Funding for Tanzania's Climate Change Efforts
The IMF has approved $786.2 million to help Tanzania tackle climate change, along with $149.4 million for budget support, highlighting the country's commitment to economic reforms and sustainable growth.
The International Monetary Fund (IMF) announced on Thursday that its executive board has approved funding of $786.2 million for Tanzania to help tackle climate change. Alongside this, a separate review was completed, allowing for the disbursement of $149.4 million for budget support.
In a statement, the IMF praised Tanzanian authorities for their commitment to continuing reforms aimed at preserving macro-financial stability, strengthening economic recovery, and promoting sustainable and inclusive growth. Over the past three years, President Samia Suluhu Hassan's administration has implemented various economic reforms with the goal of restoring the country's economic growth to the pre-pandemic real gross domestic product (GDP) growth rate of 6% to 7%.
The IMF noted that Tanzania's economic reform program has remained robust, with economic growth rebounding in 2023 after a slowdown in 2022. The organization highlighted that the current account deficit is narrowing due to fiscal consolidation, easing commodity prices, and tight external financing conditions.
Despite the optimistic outlook, the IMF cautioned that the economic recovery faces challenges from an "unfavorable global economic environment." Tanzania's economy, which relies heavily on tourism, mining, agriculture, and manufacturing, has shown resilience against back-to-back extreme weather events and climate change impacts. This resilience has been driven by a surge in the services sector, according to the World Bank.
Looking ahead, Tanzania's economy is projected to accelerate to a growth rate of 5.4% in 2024, up from 5.1% in 2023, according to Kitila Mkumbo, the Minister of State in the President's Office for Planning and Investment, who spoke last week.
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