IMF APPROVES BIG LOAN

As if to reinforce the other favourable developments, Tanzania’s financial crisis was greatly eased by the decision on November 8 of the IMF finally to approve Tanzania’s Enhanced Structural Adjustment Facility (ESAF) totalling US$234 million.

World Bank Resident Representative in Dar es Salaam Ron Brigish was quoted as saying that this could open the floodgates for balance of payments support and donor contributions to Tanzania’s development. Two weeks later the British government announced that it had approved a £24 million grant of programme aid for imports support, civil service reform costs and budgetary support.

The IMF loan is to be released in six equal half-yearly instalments over a three year period. The funds are being used to boost foreign exchange reserves in the Central Bank to enable Tanzania to purchase urgently needed medical and educational supplies.

Tanzania was said to be hoping that a beginning might be made in new international debt relief programmes at the next Paris Club meeting scheduled to be held in January 1997. Although revenue collection had improved and was totalling Shs 44.3 billion each month, some Shs 20.0 billion of this had to be paid in debt servicing. with government personnel needing to be paid, only Shs 4.7 billion was left each month for all other expenditure although the minimum needed was Shs 15 billion per month.

The World Bank announced on November 7 that it had established a ‘Heavily Indebted Poorest countries Trust Fund’ (HIPC) to be managed by the IDA to provide debt relief. Forty one countries being considered for possible assistance have been placed in four categories. Tanzania is in the second group i.e. ‘Possibly stressed’. Countries in the first group containing Burundi, Sudan and Zaire were described as ‘Unsustainable’. ‘Sustainable’ countries included Ghana, Kenya and Yemen.

RSS feed for comments on this post · TrackBack URL

Leave a Comment

You must be logged in to post a comment.