The International Monetary Fund (IMF) last
week advised the Tanzania government not to allow suppliers’ arrears to get out
of control, but was favourable of the country’s economic prospects in 2015.
This was a notable point of the first review
of Tanzania’s economic performance under the program supported by the Policy
Support Instrument (PSI).
When countries run into shortages of foreign
exchnage problems, it is the IMF that they usually turn to.
The PSI is an instrument of the IMF designed
for countries that do not need balance of payments financial support. The PSI
helps countries design good economic programs that, once approved by the IMF’s
Executive Board, signal to donors, multilateral development banks, and markets
the Fund’s support.
Following the latest Board discussion, Min
Zhu, Deputy Managing Director and acting Chair, issued a statement.
“Macroeconomic developments in Tanzania remain favorable. Economic growth was
strong during the first half of 2014 and is expected to remain close to 7
percent. Inflation remains in mid-single digits, consistent with the authorities’
target of 5 percent by June 2015,” he said.
According to a statement issued in Washington,
the members of review team said, “The issue of domestic arrears, which
continued to accumulate, needs to be addressed comprehensively and forcefully.
Work to verify and eventually clear arrears to suppliers already incurred is
ongoing. The authorities’ plan to prevent future arrears accumulation is
appropriately ambitious and will require sustained implementation.”