United Republic of Tanzania: 2023 Article IV Consultation and First Review Under the Extended Credit Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for the United Republic of Tanzania

This paper focuses on United Republic of Tanzania’s 2023 Article IV Consultation and First Review under the Extended Credit Facility Arrangement. Reforms focus on strengthening the economic recovery, preserving macroeconomic stability, and supporting structural reforms toward sustainable and inclusive growth. Tanzania’s economic reform program is progressing. All quantitative performance criteria and indicative targets for December 2022 were met. The structural benchmarks to prepare and begin implementing a plan to clear all expenditure arrears and to submit the amendments to the Banking and Financial Institutions Act to Parliament were completed ahead of time. Spillovers from the war in Ukraine and domestic factors have weighed on Tanzania’s economic recovery from the pandemic. While inflation remains below target, the Bank of Tanzania should stand ready to tighten monetary policy as needed while allowing more exchange rate flexibility against external shocks. Structural reforms are essential to promote inclusive, resilient, and sustainable growth. Business reforms should focus on streamlining bureaucratic procedures, simplifying the business regulatory regime, and enhancing regulatory transparency.