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Third Review Under the Policy Support Instrument and Request for Waivers and Modification of Assessment Criteria—Informational Annex

Author(s):
International Monetary Fund
Published Date:
January 2012
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V. Tanzania—Relations with the Fund

(As of December 31, 2011)

I. Membership Status: Joined on September 10, 1962; Article VIII

II. General Resources Account

SDR millionPercent of quota
Quota198.90100.00
Fund holdings of currency188.9094.97
Reserve Tranche Position10.005.03

III. SDR Department

SDR millionPercent of allocation
Net cumulative allocation190.51100.00
Holdings156.7982.30

IV. Outstanding Purchases and Loans

SDR millionPercent of quota
ESF Arrangements218.79110.00
ECF Arrangements9.524.79

V. Latest Financial Arrangements

Date ofExpirationAmount approvedAmount drawn
Typearrangementdate(SDR million)(SDR million)
ESFMay 29, 2009June 14, 2010218.79218.79
ECF1Aug 16, 2003Feb 26, 200719.6019.60
ECF1Apr 04, 2000Aug 15, 2003135.00135.00

Formerly PRGF.

Formerly PRGF.

VI. Projected Payments to Fund

(SDR million; based on existing use of resources and present holdings of SDRs)

20122013201420152016
Principal1.962.2418.1543.7344.60
Charges/Interest0.040.590.590.520.41
Total2.002.8318.7544.2545.01

VII. Implementation of HIPC Initiative

Enhanced
I. Commitment of HIPC assistanceFramework
Decision point dateApril 2000
Assistance committed
by all creditors (US$ million)12,026.00
Of which: IMF assistance (US$ million)119.80
(SDR equivalent in millions)88.95
Completion point dateNovember 2001
II. Disbursement of IMF assistance (SDR million)
Assistance disbursed to the member88.95
Interim assistance26.68
Completion point balance62.27
Additional disbursement of interest income27.45
Total disbursements96.40

Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts can not be added.

Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts can not be added.

Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

VIII. Implementation of Multilateral Debt Relief Initiative (MDRI)

I. MDRI-eligible debt (SDR million)1234.03
Financed by: MDRI Trust207.00
Remaining HIPC resources27.03
II. Debt Relief by Facility (SDR million)
Eligible Debt
Delivery
DateGRAPRGFTotal
January 2006N/A234.03234.03

The MDRI provides 100 percent debt relief to eligible member countries that qualified for the assistance. Grant assistance from the MDRI Trust and HIPC resources provide debt relief to cover the full stock of debt owed to the Fund as of end-2004 that remains outstanding at the time the member qualifies for such debt relief.

The MDRI provides 100 percent debt relief to eligible member countries that qualified for the assistance. Grant assistance from the MDRI Trust and HIPC resources provide debt relief to cover the full stock of debt owed to the Fund as of end-2004 that remains outstanding at the time the member qualifies for such debt relief.

IX. Safeguards Assessments

Safeguards assessments of the Bank of Tanzania (BoT) were completed in December 2003, August 2008, and November 2009. The 2009 assessment found that, while the BoT had taken steps to strengthen its safeguards framework, risks remained due to delays in implementing certain priority recommendations from the 2008 voluntary assessment. The external audit and financial reporting continued to comply with international standards, but the audited results were published with significant delays. The assessment recommended a bank-wide risk assessment, outlined steps needed to modernize the internal audit function, and proposed measures to enhance transparency of financial, control and compliance matters. The BoT has since taken steps to improve the timeliness of its financial audits and the financial statements for 2009/10 were published within the statutory deadline. The implementation of other measures is in progress.

X. Exchange Rate Arrangement

The currency of Tanzania is the Tanzania shilling. Under the revised classification methodology, Tanzania has a floating exchange rate arrangement. The official exchange rate is determined in relation to the rate established in the interbank market for foreign exchange. The weighted average rate in the interbank market was TSh 1,582.48 per U.S. dollar as of December 29, 2011. The exchange system is free of restrictions on the making of payments and transfers for current international transactions.

XI. Article IV Consultation

The most recent Article IV consultation was concluded on May 6, 2011 (Country Report No. 11/105).

XII. Resident Representative

Mr. John Wakeman-Linn has been the Senior Resident Representative since August 2010.

VI. Tanzania—Joint Bank-Fund Work Program, 2012

TitleProductsProvisional timing of missions (if relevant)Expected delivery date
A. Mutual information on relevant work programs
Key elements of World Bank work program in next 12 months1. The work program will continue to concentrate on areas within the existing and new lending portfolio: primary, secondary, and higher education; health sector development; water and sanitation; social action fund; agriculture; agribusiness development (Southern Agricultural Growth Corridor); natural resource management including minerals; environment; road and railway infrastructure; power sector restructuring; housing finance; statistical capacity; urban infrastructure; fiscal decentralization; private sector competitiveness; and public sector reform. Increasing regional portfolio in agriculture, health, finance, power, and environment.Continuous
2. Public expenditure review with the focus on rapid budget analysis (RBA); Public Investment Management (PIM) Assessment focusing on the energy sector; and Public Expenditure Review (PER) with new content on Value for Money (VFM) in the health sector.April 2012 (PIM Assessment in the energy sector); April 2012 (VFM in the health sector); and November 2012 (RBA)
3. Debt management reform plan mission by PREM (Economic Policy and Debt Department) will take place, focusing on institutional fragmentation and operational risk management issues.Mission (from late January or early February)February 2012
4. Ninth Poverty Reduction Support Credit (PRSC-9), the first operation of the new series of three annual programmatic development policy operations (DPOs) to contribute to general budget support (GBS) in Tanzania, is being prepared for Board approval in March 2012 and for disbursement within FY2011/12. The new series will have two pillars of investment climate (covering business environment legal framework, special economic zones, competitiveness as a regional transit hub, and implementation of land laws and policies) and public finance (covering domestic revenue mobilization, public investment management including PPPs, and quality of budgets and public financial management) with a cross-cutting emphasis on budget transparency and access to information.Regional Operations Committees meeting (January 19, 2012); Appraisal and negotiations (January 23–February 3)March 2012
5. First Pension Reform Programmatic DPO is under preparation for delivery during the last quarter of FY2011/12 or the first quarter of FY2012/13.April to September 2012
IMF work program in next 12 monthsFourth PSI ReviewMarch 2012June 2012
Fifth PSI ReviewOctober 2012December 2012
B. Requests for work program inputs
Fund requests to Bank1. Assessment of key infrastructure projects and sectoral programs.Continuous
2. Assessment of financial health of pension funds.Continuous
3. Inputs on the design of a social protection framework.Continuous
Bank requests to Fund1. Monitoring of government contracting of non-concessional borrowing.Continuous
2. Monitoring of steps to strengthen corporate governance of the BoT.Continuous
3. Sharing macroframework updates.Continuous
4. Statement of fiscal risk and contingent liabilities.Continuous
5. Sharing of developments and outcomes of technical assistance work related to tax policies.Continuous
C. Agreement on joint products and missions
Joint products in next 12 months1. Collaborate on a joint DSAMarch 2012April 2012
2. Collaborate together with other development partners on strengthening the Public Expenditure Review (PER) dialogue process.Continuous
3. Collaborate on public financial management reform program in the context of multi-donor support of the Public Financial Management Reform Program and/or GBS/PRSC.Continuous

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