The country’s total exports of goods and services increased by 5.6 per cent in the year ending last May, narrowing the current account deficit by almost ten per cent.The exports increased to 8.27 billion US dollars, up from 7.83 billion US dollars recorded in the same period that ended May last year. According to Bank of Tanzania (BoT), the value of goods and services imported decreased by 1.4 per cent to 12.67 billion US dollars.
“These developments led to narrowing of the current account deficit by 9.5 per cent to 3.98 billion US dollars compared to the deficit of 4.38 billion US dollars recorded last year,” the central bank said in its monthly economic review issued over the weekend.
The International Monetary Fund said last month that the improvement was largely driven by the trade balance as imports, particularly oil, dropped considerably and exports of traditional products— coffee and cotton—rose as a result of favourable weather conditions.
“These factors more than offset the impact of declining gold exports and falling gold prices,” IMF said in its country report, adding, “Receipts from tourism also increased.” The central bank attributed the increase to exports of traditional goods, manufactured goods, travel and transportation receipts.
The value of traditional exports increased by 13.4 per cent at the end of May, compared to a marginal increase of 4.1 per cent recorded in the preceding year. “The performance was largely driven by increased export volumes of coffee, cotton and cashew nuts,” said the bank of bankers, adding, “The increase was a result of good weather coupled with good price developments in the preceding years.”
The performance was largely driven by increased export volumes of coffee, cotton and cashew nuts. Although traditional exports led, a notable increase was registered in all other non-traditional exports with the exception of gold, fish and fish products.
“(Data show) that gold and manufactured goods continue to account for the largest share of total nontraditional exports,” BoT said in the report. Nonetheless, during the period under review, the share of gold in total nontraditional exports declined to 56.7 per cent from 63.4 per cent recorded in the preceding year.
The modest performance of gold is associated with a fall in export volume to 36 tonnes from 39 tonnes in the preceding period coupled with decline in average unit export price by 2.2 per cent to 1,627.9 US dollars per troy ounce.
Increase in export volumes somehow assisted the overall balance of payments (BoP) to record a surplus of 652.8 million US dollars compared to a deficit of 44.3 million US dollars of May 2012.
As a result, gross official reserves amounted to 4.28 billion US dollars as of May, sufficient to cover 4.2 months of projected imports of goods and services, excluding those financed by foreign direct investment. Meanwhile, gross foreign assets of banks stood at 869.5 million US dollars.
Source: The Daily News, reported from Dar es Salaam, Tanzania
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