Tanzania has begun negotiations with G-20 nations over debt relief, the finance minister said on Thursday during a budget speech.
“The 20 richest nations in the world (G-20) have urged bilateral official creditors to provide debt relief to the world’s poorest nations including Tanzania,” Philip Mpango said in parliament.
“The government has began negotiations with creditors to benefit from this initiative.”
The initiative is geared towards delaying debt repayments beginning May to December 2020, freeing up cash for governments to use for measures to ease the economic impact of COVID-19.
The announcement comes after the International Monetary Fund on Wednesday said it approved debt relief to Tanzania worth $14.3 million over the next 4 months, and potentially up to $25.7 million over the next 23 months.
“IMF debt service relief will help free up resources for public sector health needs and other emergency spending, as well as mitigate the balance of payments shock resulting from the pandemic,” it said.
Neighbouring Kenya has said it will not seek debt relief under the G20 plan because the terms are too restrictive and it might affect Kenya’s credit rating.