IMF WANTS TANZANIA TO PAY DOWN SUPPLIER DEBT

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.”