IMF approves US $25 million in low-cost loans

The International Monetary Fund (IMF) said on Tuesday that a continued strong performance of the Tanzanian economy meant it will be able to immediately draw on up to US $25 million in low-cost loans. "Tanzania's macroeconomic performance continues to be strong. Owing to a good performance in agriculture, real GDP growth in 2001 remained buoyant at an estimated 5.1 percent," Horst Kohler, IMF managing director, said in a statement. The IMF's fourth review of Tanzania's performance under the Poverty Reduction and Growth Facility (PRGF) arrangement had decided Tanzania would be immediately able to draw up to US $25 million under the arrangement, the IMF said. The PRGF is the IMF's concessional facility for low-income countries. The IMF in March 2000 approved a three-year loan for Tanzania under the PGRF of about US $181.5 million to support the government's 2000-02 economic programme. So far, Tanzania has drawn about US $100 million under the arrangement, according to the IMF. Outgoing World Bank representative for Tanzania and Uganda, Jim Adams, told IRIN in April that the Tanzanian government had, over the last two years, done a "very good job" of combining a strong economic performance with a credible poverty reduction programme. "Tanzania has had a good record on the macroeconomic side throughout the period of President [Benjamin] Mkapa's leadership," he said. see http://irinnews.org/report.asp?ReportID=27076 According to the IMF, economic policy in Tanzania this year would be geared to mobilising additional government revenue and planning for public expenditure increases in priority areas, including primary education, primary health care, water and the fight against HIV/AIDS. "The authorities need to mobilise additional revenue in order to reduce Tanzania's dependence on external assistance", the IMF said. According to Adams, it is now important that government poverty-reduction and other programmes are implemented effectively, and that additional resources allocated to them have a real impact on the lives of ordinary Tanzanians. "For example, the government has this year allocated a significant increase in resources to the primary education sector. Those funds are being made available to schools, but the important thing is to make sure that those funds have a significant impact", he said. The IMF and World Bank in November 2001 agreed to provide Tanzania with some US $3 billion in debt relief over the next 20 years. Resources made available by debt relief provided under the Heavily Indebted Poor Countries (HIPC) initiative would be allocated to key anti-poverty programmes outlined in Tanzania's Poverty Reduction Strategy Paper (PRSP), the two Bretton-Woods institutions said at the time.