Tanzania - Second Inclusive and Resilient Growth Development Policy Financing - Release of the Second Tranche—Full Compliance

Jul 19, 2026

Summarizes progress under Tanzania’s Second Inclusive and Resilient Growth Development Policy Financing, approved by the Board of Executive Directors on December 20, 2023. The financing is delivered in two tranches: a US$500 million first tranche and a US$250 million second (final) tranche. It confirms the government’s compliance with conditions in the Financing Agreement for releasing the second tranche and outlines the program’s three pillars, macroeconomic framework adequacy, and expected outcomes under sound monetary and fiscal policies.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages3

Reading Time8 min

Background

Program design and three pillars

Macroeconomic policy framework

Macroeconomic adequacy for disbursement

Growth, inflation, and external balances

Fiscal consolidation and debt sustainability

Progress on the program

Implementation status

Public Disclosure Authorized Public Disclosure Authorized UNITED REPUBLIC OF TANZANIA SECOND INCLUSIVE AND RESILIENT GROWTH DEVELOPMENT POLICY FINANCING Release of the Second Tranche—Full Compliance Tranche Release Document October 7, 2024 1. This document summarizes the progress made under the Second Inclusive and Resilient Development Financing for United Republic of Tanzania, which was approved by the Board of Executive Directors on December 20, 2023. The credit comprised two tranches: (1) first tranche comprising US$500 million, from the non-concessional IDA regular Scale Up Window (27 years maturity and 13 years grace period, Credit No: IDA 7476), and (2) second tranche comprising US$250 million, from the concessional IDA scale up facility window-short maturity loans (12 years maturity and 6 years grace period, Credit No: IDA 7477) . The credit was declared effective on December 21, 2023, and the first tranche of US$500 million was released on December 22, 2023. The government has satisfied the conditions for the release of the second (and final) tranche of US$250 million, as outlined in the Financing Agreement and described below. I. BACKGROUND 2. The Second Inclusive and Resilient Growth DPF is the second in a programmatic series of two operations supporting Tanzania’s policy and institutional reforms. The DPF aims to i) improve the business environment for private sector-driven recovery and growth (first pillar); (ii) strengthen the management of SOEs and fiscal risks, and improve fiscal transparency (second pillar), and (iii) boost economic resilience (third pillar) . The first pillar comprises important measures to promote job-creating private investments by addressing longstanding business-climate constraints, including excessive bureaucracy, predatory taxation, and limited access to finance. The second pillar covers reforms to strengthen the risk monitoring of SOEs, increase private participation in public projects, and enhance the efficiency and transparency of fiscal operations by improving the management of arrears. The third pillar includes measures to boost economic resilience by implementing Universal Health Insurance, integrating the farmer’s registry with the country’s mobile extension service systems to improve public services to farmers, and adopting national social protection and gender policies to strengthen social protection and promote gender equality. II. MACROECONOMIC POLICY FRAMEWORK 3. With sound macroeconomic fundamentals and prudent policies, Tanzania’s macroeconomic policy framework is considered adequate for the disbursement of the second tranche. Despite the narrowing fiscal and external space to absorb shocks, and substantial global risks, Tanzania is appropriately balancing between prudent monetary and fiscal policies with a progrowth investment agenda. The country is also making strides in structural reforms. The authorities continue to prioritize reforms aimed at fostering a robust private sector, improving public sector efficiency and accountability and maintaining prudence in non-concessional borrowing. Macroeconomic projections indicate a sustainable outlook with moderate inflation rate. Tanzania’s ability to absorb external shocks, supported by external and fiscal buffers, mitigates risks to the positive outlook. 4. With increasing growth momentum and low inflation, economic performance is expected to remain robust in the medium term. Gross Domestic Product (GDP) grew by 5.1 percent in 2023 and is projected to accelerate at 5.4 percent in 2024. This uptick is underpinned by robust public investment, improved business environment, and enhanced export competitiveness. Headline inflation has softened from a high of 4.9 percent y-o-y at the beginning of 2023 to 3.1 percent in August 2024, well below Bank of Tanzania’s ( BoT) medium-term target of 5 percent. 5. With prudent policies, external balances continue to improve. The authorities allowed the exchange rate to

FAQs

What is the purpose of the Second Inclusive and Resilient Growth Development Policy Financing for Tanzania?

It supports Tanzania’s policy and institutional reforms through business environment improvements, strengthening SOE management and fiscal transparency, and boosting economic resilience.

How are the credit tranches structured, and when can the second tranche be released?

The credit includes a first tranche of US$500 million and a second (final) tranche of US$250 million. The second tranche release depends on the government meeting conditions set out in the Financing Agreement.

What macroeconomic and fiscal factors are used to assess adequacy for the second tranche disbursement?

The document cites adequate macroeconomic fundamentals, balancing monetary and fiscal prudence with a pro-growth agenda, improved external balances, narrowing fiscal deficits, and a moderate debt risk rating from the June 2024 Debt Sustainability Analysis.

Jul 19, 2026

Upload by River Wang