Tanzania Current Account Deficit Narrows by Half in YE May 2024, Strong Growth in Exports of Oil Seeds, Horticultural Products, and Tourism Receipt

The Bank of Tanzania (BOT) released its Monthly Economic Review-June 2024 which covers key macroeconomic indicators for the year ending May 2024.

External Sector Performance

The external sector continued to improve, owing to the easing of global supply chain disruptions and commodity prices.

Imports of goods and services declined during the year ending May 2024, while exports increased.

Consequently, the current account deficit narrowed to USD 2,499.8 million (-52%) from USD 5,221.8 million in the year ending May 2023.

The outturn was mainly driven by high net inflows in the services account amid favorable world commodity prices.

Foreign Exchange Reserves

Foreign exchange reserves remained stable, at USD 5,162.6 million end of May 2024, sufficient to cover 4.3 months of projected imports of goods and services.

Exports

Exports of goods and services increased by 15% to USD 14,541.9 million in the year ending May 2024, from USD 12,616.7 in the year ending May 2023.

A notable export increase was observed in gold; services in particular travel (tourism), traditional goods, horticulture products, as well as fish and fish products.

Traditional Goods Exports

Exports of traditional goods increased to USD 1,051.3 million in the year ending May 2024, higher than USD 761.6 million in the same period in 2023.

The increase was primarily driven by high exports of tobacco, cashew nuts, and coffee, manifested in both prices and volumes.

Non-traditional Goods and Mineral Exports

Exports of non-traditional goods increased to USD 6,345.5 million for the year ending May 2024, compared with USD 6,171.5 million in the corresponding period of 2023.

The growth was driven by high exports of gold, oil seeds, horticultural products, fish and fish products.

Gold exports were USD 3,115.6 million (compared with USD 2,897.7 million in the previous year, largely due to price effects.

Exports of oil seeds increased by 52.6% to USD 301.3 million.

Exports of horticultural products rose by 36.7% to USD 407.8 million, with significant contributions from vegetables and fruits.

Service and Tourism Receipts

Service receipts increased to USD 6,716.9 million in the year ending May 2024, up from USD 5,303.8 million in the corresponding period of 2023.

The increase was driven by high receipts from travel (tourism) and transport services.

The rise in travel receipts was supported by improvement in the tourism sector, with tourist arrivals increasing by 21.9% to 1,961,870.

Imports

Import of goods and services decreased to USD 16,108.0 million in the year ending May 2024, from USD 17,089.4 million in the previous year.

The decrease was largely due to low imports of refined white petroleum products, fertilizers, other consumer goods (including pharmaceutical products, soaps and detergents), as well as food and beverages for household consumption.

The fall in oil imports is mainly ascribed to the decrease in the global market price of crude oil.

Services payments amounted to USD 2,268 million in the year ending May 2024, compared with USD 2,564.8 million in the previous year.

The decrease was mostly due to a decline in freight costs, which were consistent with the overall decrease in import bills.