In his budget presentation in the capital Dodoma, Finance minister Philip Mpango said government evaluations show the country had not been too badly affected by the pandemic, allowing it to raise its growth forecasts and maintain a firm financing schedule for ongoing development projects.

In a new World Bank report released on June 8, the bank predicted that Tanzania's economic growth would drop sharply to 2.5 per cent in 2020 due to the effects of the pandemic.

"There are downside risks for even slower growth if additional health and economic policy measures to mitigate the negative impacts of the Covid-19 pandemic are delayed or not well-targeted, or the external environment does not markedly improve this year," the bank said.

Dr Mpango said the budget recognised emerging opportunities from the pandemic in falling world oil prices, which have helped reduce transport and manufacturing costs for industries, rising gold prices, and a growing market for locally produced health products to combat Covid-19.

Dr Mpango said discussions are also ongoing with other potential external lenders including the World Bank through its Pandemic Emergency Financing Facility, the Economic Development Cooperation Fund run by the South Korea Exim Bank, the European Union's Covid-19 Response Package, and the IMF Rapid Credit Facility, which could provide up to $272 million in balance of payments support for the country.