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IMF urges cautious public spending as Tanzania secures $7.6bn loan facility

IMF urges cautious public spending as Tanzania secures $7.6bn loan facility

Tanzania

The International Monetary Fund (IMF) has urged Tanzania to undertake structural reforms and cut back on public spending as the country seeks to invest in major infrastructure projects.

The east African economy is looking to embark on key projects ranging from ports, roads, and a railway line that will further open up trade amongst east African landlocked countries of Burundi, Rwanda and Uganda.

President John Magufuli has already secured a $7.6 billion loan from China for the 2,200 kilometre rail project.

Careful prioritization and implementation of expenditures will be required to ensure that spending does not exceed available resources and to avoid domestic arrears accumulation

The Fund however cautioned that Tanzania needs to keep spending on the minimum, as it prepares to dive into its comprehensive infrastructure programme.

“Careful prioritization and implementation of expenditures will be required to ensure that spending does not exceed available resources and to avoid domestic arrears accumulation, “ said IMF deputy managing director Min Zhu in a statement.

Despite the the warning, IMF welcomed the move by Tanzanian authorities to postpone the launch of two major investment projects until mid next year. But, it did not mention the projects to be put on hold.

Zhu, went on to praise Magufuli’s government for its anti-corruption campaign and efforts to improve the country’s business environment.

IMF, Agencies

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