The IMF said in a statement that the financing package would assist Tanzania's economic recovery, address spillovers from Russia's invasion of Ukraine, help preserve macroeconomic stability and support structural reforms.
"Reforms will focus on strengthening fiscal space for much-needed social spending and high-yield public investment, resuming and advancing the authorities’ structural reform agenda," and strengthening financial stability, the fund said.
The fund has been seeking to convert low-conditionality COVID-19 support loans to longer-term, traditional loan packages that require policy reforms.
Tanzania faces "considerable development and reform challenges and external headwinds, including COVID-19-induced scars and the war in Ukraine, (that) risk eroding hard-won economic gains," IMF Deputy Managing Director Bo Li said in the IMF statement.
The IMF said the new arrangement "is expected to catalyze additional bilateral and multilateral financial support" and help attract private sector investment.