Zanzibar current account deficit narrows

The Zanzibar current account deficit has narrowed down considerably after going down to 700,000 US dollars in the year ended last July, thanks to tourism related proceeds.

The Bank of Tanzania (BoT) said in its latest Monthly Economic Review that the narrowing of the current account deficit was largely because of an increase in tourism related proceeds.

“The lower surplus was on account of a decline in the value of exports of goods and services coupled with a decrease in current transfer inflows,” BoT said. 

However, during the same period the isles’ current account recorded a declined surplus to 4.9 million US dollars compared to a surplus of 106.4 million US dollars recorded in the corresponding period in 2012.

The report shows that if it was not for the exports declined by 52.2 per cent dragged down by cloves, which productions and prices plummet, the current account could be in a good picture. 

The narrowing down was cushioned by services account that registered a surplus of 93.8 million US dollars for the year ending July, this year, though was lower compared to 101.8 million US dollars in the year ending July 2012.

The service payments also decreased by 12.2 per cent to 57.4 million US dollars recorded in the year ending July 2012. 

On the other hand, the Zanzibar’s clove exports declined by slightly over half plunging with it the isles overseas trading volume in first seven months of this year.

The BoT says that the clove exports decreased by 52.2 per cent from the volumes recorded during the year ending July in comparison to the same period in 2012. 

The central bank data shows that apart from declining volume of export, the average export price also went down to 9,395.50 US dollars per tonne from 12,785.50 US dollars per tonne in the year ending July 2012.

Clove is the number one foreign exchange earner for Zanzibar followed by tourism. Exports of goods and services during the year ending last July was 190.6 million US dollars compared to 243.8 million US dollars registered in the corresponding period in 2012. 

BoT said the outturn was largely driven by a decline in good export proceeds and service receipts.

“The value of goods exports declined mainly due to a decrease in both volume and export price of cloves,” the central bank said. 

However, while exports declined the imports of goods and services increased by 5.7 per cent to 239.3 million US dollars in the year ending July 2013 from 226.5 million US dollars registered in the corresponding period in 2012. 

Goods imports alone increased to 199.9 million US dollars from 177.0 million US dollars recorded during the year ending July 2012, mainly driven by capital and consumer goods.
Source: Daily News, reported by Abduel Elinaza, from Dar es Salaam, Tanzania
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