Tanzania’s external sector of the economy recorded a significant improvement in the year ended January 2013, with the current account deficit narrowing by 21.9 percent to US$3.3 billion, compared to a deficit of US$4.3 billion recorded in the corresponding period in 2012, the central bank has reported.
“This development was largely explained by the increase in exports of goods and services that outweighed the impact of the increase in imports,” said the Bank of Tanzania in its latest monthly economic review.
According to the report, mainland Tanzania’s overall balance of payments recorded a surplus of US$313.8 million, compared with a deficit of US$371 million recorded in the year ending January 2012.
Net increase in inflows in the form of capital grants, foreign direct investments and foreign borrowing contributed towards the improvement of the overall balance of payments position, the bank explained.
Gross official reserves were US$3.8 billion at the end of January 2013, sufficient to cover three months imports of goods and services.
Meanwhile, the value of exported goods and services amounted to US$8.6 billion during the year ended January 2013, compared with US$7.3 billion posted a year earlier.
“This development was due to an increase in receipts from travel, traditional and manufactured exports,” said the review, pointing out that traditional exports increased by 50.8 percent.
The increase was largely on account of a remarkable increase in the export volumes of coffee, cotton, tobacco and cashew nuts that were associated with good weather conditions.
Improved performance of manufactured goods and re-exports raised the value of non-traditional exports by 15.8 percent to US$4.3 billion.
The bank explained that the value of manufactured goods went up by 20.7 percent to over one billion dollars, compared to a decline of about 12 percent recorded in the preceding year.
Likewise, the value of re-exports increased to US$184 million from US$102.5 million recorded during the year ended January 2012.
An increase in international tourist arrivals in the country raised receipts from transportation services from US$2.3 billion in the year ended January 2012 to US$2.6 billion in the year ending January 2013.
In the meantime, the value of imports of goods and services increased by 2.4 percent, compared to an increase of 34.9 percent in the preceding year.
“The value of intermediate goods remained almost unchanged at US$4.3 billion compared to US$4.2 billion following stabilisation of oil imports which accounted for over 70 percent of intermediate goods. This development was mainly explained by a decline in volume of oil imports as average prices of oil in the world market increased,” said the report.
Regarding Zanzibar, the report said the isles exported goods and services worth US$208.9 million in the year ended January 2013, compared with US$296.6 million recorded by end of January 2012.
Goods export alone accounted for US$43.8 million, representing a decrease of 27.4 percent from the amount recorded in the corresponding period in 2012.
According to the report, the Isles’ receipts from services decreased from US$236.3 million to US$165.2 million, mainly due to a decline in the number of tourist arrivals.
The report however did not explain why tourists shied away from the islands.