The Executive Board of the International Monetary Fund (IMF) on Wednesday approved a $14.3 million debt service relief for Tanzania to battle COVID-19.
The debt service relief was approved under the Catastrophe Containment and Relief Trust.
The grant would cover Tanzania’s debt service falling due to the IMF from today, June 10, 2020, to October 13, 2020, the equivalent of $14.3 million.
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Debt service is the monthly payment Tanzania makes to the IMF every month to service or pay back its debt.
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, the IMF said in a statement in Washington DC
The Fund said the debt service relief will contribute to alleviate Tanzania’s balance of payment needs stemming from the COVID-19 pandemic.
Mr. Tao Zhang, IMF Deputy Managing Director and Chair, said the COVID-19 pandemic is having “an adverse economic impact on Tanzania, creating exceptional fiscal and balance of payments needs.”
“The IMF’s debt service relief under the Catastrophe Containment and Relief Trust will free up public resources to help address the pandemic,” Mr. Zhang said.
“Looking ahead, structural reforms remain crucial to support a robust economic recovery. The focus includes addressing arrears on VAT refunds and government expenditures, enhancing human capital and the business environment, and improving the affordability of bank credit,” he added.