IMF approves ESAF loan for Tanzania

The International Monetary Fund (IMF) has approved a loan of about US $82 million to Tanzania to be channelled through the fund’s Enhanced Structural Adjustment Facility (ESAF). The loan will be used to support Tanzania’s economic reform and stabilisation programme in 1998/1999. Under a three-year ESAF arrangement approved by the IMF in 1996, Tanzania’s real GDP grew by 4 percent in 1996/97 and 3.4 percent in 1997/98. Overall inflation in June 1997-June 1998 was 12 percent, the lowest in 20 years although higher than the 9.5 percent originally targetted. Meanwhile, the EU announced yesterday that it was lending US $39 million to Tanzania, the first tranche of a 55-billion-shilling loan under its Structural Adjustment Facility, according to Reuters. The money is to help Tanzania pay its domestic debt and “is the biggest allocation Tanzania has ever received from the European Development Fund,” Reuters quoted EU delegation head Peter Beck Christiansen as saying. In exchange for the aid, the government has pledged to increase spending on primary education.