The International Monetary Fund’s executive board in a statement on Tuesday approved $567m in emergency support for Tanzania to finance COVID-19 vaccination campaign and meet the health and social costs of the pandemic.
The new funding will allow Tanzanian officials to address “the urgent health, humanitarian, and economic costs” of the pandemic, the IMF said.
It will also help Tanzanian officials mobilise additional support from development partners, it said.
Tanzania plans to borrow almost 10.8 trillion shillings ($4.7bn), about half of which the authorities seek to raise from external sources.
The COVID-19 outbreak which had been denied under the late president, John Magufuli and travel restrictions have led to the collapse of the tourism sector in the East African country.
The IMF board approved on Tuesday a disbursement of $189m to Tanzania under its Rapid Credit Facility (RCF), as well as $378m under the Rapid Financing Instrument.
Following the death of President John Magufuli in March and the takeover by President Samia Suluhu Hassan, Tanzania has started acknowledging the crisis, which caused a major deceleration to 4.8 percent growth in 2020, with growth to remain subdued in 2021.
IMF Deputy Managing Director, Bo Li, said Tanzania needs urgent financial assistance, adding that authorities’ plans for a vaccination campaign and increased health and social spending would help mitigate the effects of the pandemic.
He said it would be critical to ensure that the new funds are spent on fighting the pandemic, and to maintain fiscal and debt sustainability, while preserving financial stability.
“It would also be important for authorities to monitor the banking system’s health in light of increased banking sector vulnerabilities,” he said in a statement.
The funding announcement follows talks between the IMF and Tanzania, with the government committing to resume publishing data on the spread of COVID-19 in order to determine the outbreak’s severity and an appropriate response.
The authorities had stopped releasing the data after former President Magufuli downplayed the disease before his death.