- Feb 11, 2006
The International Monetary Fund (IMF) has warned the United Republic of Tanzania of the negative impact of the rising oil prices on the country's economic development.
The IMF said in its recent country report that if current oil prices persist there would be downside risks to economic growth.
The international financial institution said in the report that Tanzania would have to fork out 2.23 billion U.S. dollars, or37 percent of the country's 2008/2009 fiscal budget, to cash its oil imports in the coming financial year which starts on July 1.
Tanzania entirely depends on oil imports to power the country's development engine.
But by this week's level of 135 dollars per barrel, Tanzania's oil bill is likely to balloon to 2.63 billion dollars.
The country's oil bill might still surge to 4 billion dollars, or over 60 percent of the planned budget, should the barrel of oil reach 200 dollars by the end of this year as some experts have predicted.
Tanzania's central bank - Bank of Tanzania - has revealed that during the year ending February 2008 oil imports by Tanzania amounted to 1.46 billion dollars as against the country's total import value of 5.53 billion dollars.
The IMF has said that Tanzania's strong international reserve position and flexible exchange rate policy should help the country to weather the oil price rise shock.