(Ecofin Agency) - The International Monetary Fund (IMF) announced yesterday it has approved $935.6 million in funding for Tanzania to support economic reforms and climate change mitigation.

Of this amount, $786.2 million will be disbursed over 23 months under the Resilience and Sustainability Facility (RSF). This loan mechanism, launched in 2022, helps low- and middle-income countries tackle long-term structural challenges like climate change. The funding will back reforms aimed at enhancing the East African nation's climate resilience.

Additionally, an immediate disbursement of a new $149.4 million loan tranche was approved under the Extended Credit Facility (ECF) agreement between Dodoma and the IMF, initiated in July 2022. The IMF highlighted remarkable progress in implementing reforms associated with the funding program despite a challenging global economic environment.

"All end-December 2023 quantitative performance criteria and indicative targets were met. The authorities’ structural reform agenda is progressing well, having met two of the three structural benchmarks for end-December 2023 and a structural benchmark for end-January 2024 on time, reflecting their commitment to the reform agenda," the IMF stated.

Praising a reduction in the current account deficit and a rebound in economic growth, the IMF noted that Tanzania's short-term priorities include enabling exchange rate flexibility and implementing fiscal consolidation as outlined in the budget, while preserving priority social spending.