From the Executive Board

• Pages: 400

Page 400

Following are excerpts of a recent IMF press release. The full text is available on the IMF's web site (http://www.imf.org/external/news.htm) or on request from the IMF's Public Affairs Division (fax: (202) 623-6278).

Tanzania: ESAF

The IMF approved the second annual loan under the Enhanced Structural Adjustment Facility (ESAF), in an amount equivalent to SDR 71.4 million (about $97 million), to support Tanzania's economic program for 1997/98. The initial amount of SDR 51.41 million (about $69.8 million) has been increased by SDR 20 million (about $27.17 million) to assist Tanzania in dealing with the effects of drought. The loan is available in two equal semiannual installments, the first of which can be drawn on December 19, 1997. The three-year ESAF credit, equivalent to SDR 161.6 million (about $220 million) was approved on November 8, 1996 (see Press Release No. 96/55, IMF Survey, November 25, 1996).

Program for 1997/98

The key macroeconomic objectives of the 1997/98 program that the ESAF loan supports are to achieve a real GDP growth rate of 4.7 percent; reduce the inflation rate to no more than 13 percent; and limit the external current account deficit, excluding official transfers, to 14.4 percent of GDP. To achieve these objectives, fiscal policy targets a surplus on the current government budget of 1.1 percent of GDP (excluding grants and development expenditures), reflecting the rationalization of the structure of both revenues and expenditures. Preparations are under way for the introduction of a value-added tax in July 1998. Monetary policy under the program will be consistent with achieving the program's inflation and balance of payments objectives.

Structural Reforms

The government is continuing with reforms of the banking and the parastatal sectors, and with civil service reform. The scope of privatization has been widened to include the...