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IMF approves Ksh1.5 billion debt relief to Tanzania to mitigate effects of COVID-19

IMF approves Ksh1.5 billion debt relief to Tanzania to mitigate effects of COVID-19

The Executive Board of the International Monetary Fund (IMF) on June 10 approved a debt relief worth Tsh33 billion (Ksh1.5 billion) to help Tanzania’s socio-economic hurdles during the coronavirus pandemic.

The grant is from IMF’s Catastrophe Containment and Relief Trust (CCRT) and will be channelled to cover Tanzania’s debt service falling due to the IMF from today to October 13, 2020.

Additional relief covering the period from October 14, 2020 to April 13, 2022 will be granted subject to the availability of resources in the CCRT, potentially bringing total relief on debt service to the equivalent of about US$25.7 million, said IMF.

The debt service relief will contribute to alleviate Tanzania’s balance of payment needs stemming from the COVID-19 pandemic.

President John Pombe Magufuli’s state is currently exhibiting a drastic reduction in tourism receipts, budget pressures, and a projected deceleration of Gross Domestic Product (GDP) growth from over 6 percent to 4 percent in the current fiscal year and to 2.8 percent in the upcoming fiscal year which ends in June.

“The COVID-19 pandemic is having an adverse economic impact on Tanzania, creating exceptional fiscal and balance of payments needs. The authorities have implemented containment measures and avoided economic lockdown. They remain vigilant to the risk of spiralling infections and uncertainty surrounding the pandemic.” Said Mr. Tao Zhang, Deputy Managing Director and Chair of IMF Executive Board.

“The IMF’s debt service relief under the Catastrophe Containment and Relief Trust will free up public resources to help address the pandemic. The authorities are committed to using the additional resources for their intended purposes and in a transparent manner, including through ex-post audits of COVID-related spending. To deal with the remaining risks, it will be important to safeguard appropriate funding for health and other priority social spending in the FY2020/21 budget, as well as ensure close cooperation with the World Health Organization, multilateral agencies, and donors.

President Magufuli declared Tanzania a “coronavirus-free” courtesy of prayers by Tanzanian citizens.

“The corona disease has been eliminated thanks to God,” Mr Magufuli told worshippers in a church in the capital, Dodoma, according to the BBC report.

However, the World Health Organization (WHO) has since expressed concern over President Magufuli’s strategy on coronavirus.

The government stopped publishing data on the number of coronavirus cases in the country.

There were 509 cases on April 29 with 21 deaths, the very last day COVID-19 data in Tanzania was updated..

In April Tanzania’s government dismissed a US embassy warning that hospitals in Dar es Salaam were “overwhelmed” and that the chances of contracting the virus were “extremely high”.

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