Oil widens current account deficit

The current account deficit widened to 3,842.9 million US dollars (about 6.15tr/-) from 3,397.8 million US dollars (about 5.44tr/-) recorded in the corresponding period in 2011, which is a 13.09 per cent rise largely due to an increase in imports of oil and machinery.

According to the Bank of Tanzania (BoT) monthly economic review for October, this year, the value of import of goods and services was 13,063.5 million US dollars (about 20.9tr/-),15.8 per cent higher than the amount imported in the year ending October last year.

"The increase was largely driven by both high oil import prices and volume. The volume of imported oil increased to 3.8 million tonnes from 3.5 million tonnes of 2011. 

There was also a substantial increase in imports of machinery associated with an increase in gas and oil exploration activities," stated the report.

Tanzania Electric Supply Company (TANESCO) said recently it was spending 5.2 million US dollars (about 8.3bn/-) daily on purchase of diesel and heavy furnace oil to run its three oil power plants. 

In the meantime, the gross official reserves amounted to 4,104.6 million US dollars (about 6.56tr/-) at the end of October 2012,sufficient to cover about 3.8 months of import of goods and services. During the same period, the gross foreign assets of banks stood at 904.4 million US dollars (about 1.45tr/-). 

The value of export of goods and services was 8,430.9 million US dollars (about 13.48tr/-) for the period ending October compared with 7,339 million US dollars (about 11.74tr/-) recorded in 2011.

The improved performance was mainly attributed to an increase in receipts from travel, gold and traditional exports. The total value of traditional exports was 896.1 million US dollars, (about 1.43tr/-) up from 687.9 million US dollars (about 1.1tr/-) recorded during the year ending October 2011.

This improvement was mainly attributed to an increase in export volumes and unit prices. The value of non-traditional exports was 4,212.4 million US dollars (about 6.74tr/-), being 12.6 per cent higher than the value recorded during the year ending October 2011, mainly driven by an increase in manufactured goods.

The value of manufactured goods exports increased by 16.2 per cent to 1,051.8 million US dollars (about 1.68tr/-) in October 2012. The value of gold exports also increased largely due to the rise in world market price. According to the BoT report, gold and manufactured goods continued to account for the largest share of total non-traditional exports.

Source: The Daily News, www.dailynews.co.tz reported from Dar es Salaam

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