IMF releases $37m.

Author:Walengreen, Maja
Position:Loans to Tanzania

The International Monetary Fund (IMF) has seen "impressive progress" in economic reforms in Tanzania and will release a new disbursement worth about $37m in recognition of this.

Assistant director of the IMF's African Department, Mr Jerry Johnson, said, during a recent mission to Tanzania, that the Fund's Washington headquarters had been broadly satisfied with the reform undertaken by President Benjamin Mkapa's government.

"It has been a difficult year, obviously affected by the drought, but I think the government has come through this pretty well. The targets set by the ESAF (Enhanced Structural Adjustment Facility loan) programme have been met by the government very well," Mr Johnson said. "Budget control is kept, inflation is coming down, ...I don't see any reasons why the IMF's executive board wouldn't approve the next disbursement," he added.

He said the first disbursement, worth about $37m of the second annual tranche could be expected to be ready for disbursement in November. This will bring disbursement to date up to half the total of the $240m three year ESAF loan the IMF approved for Tanzania in October last year.

Mr Johnson said inflation figures were looking good and despite a serious drought earlier in the year, which had caused big increases in food prices making overall inflation peak at about 17%, real inflation remained low.

"Fiscal discipline ...has brought real inflation down to about 10%. Unfortunately we had the drought, which has made food prices go up, but once the drought is over, food prices will start to come down and one can expect inflation to get further down, even below 10%. It certainly seems the government has gone off to a good start, it's another year of budget discipline and fiscal control and we thinks it's a very good project," Mr Johnson said.

He said the new investment act passed by parliament a few months ago was another positive sign of the government's understanding of how to create a friendly...

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