The Bank of Tanzania (BOT) released its Monthly Economic Review-July 2023 which covers key macroeconomic indicators for the year ending June 2023.
External Sector Performance
The cumulative effects of the shocks, particularly the war in Ukraine and monetary policy tightening in advanced economies, continued to depress the external sector of the economy.
The current account recorded a deficit of USD 4,868.7 million in the year ending June 2023, compared with USD 3,398.1 million in the year ending June 2022, driven by high import bills.
It is anticipated that the current account balance will improve in the subsequent months due to declining pressure from commodity prices along with the increase in receipts from tourism-related activities.
Meanwhile, the balance of payments improved to a surplus of USD 114 million, from a deficit of USD 1.1 million in the year to June 2022.
Correspondingly, the stock of foreign reserves increased to USD 5,282.6 million at the end of June 2023, from USD 5,110.3 million in the similar period in 2022.
The reserves remain adequate, covering 4.8 months of projected imports of goods and services, above the country benchmark of at least 4 months and the EAC benchmark of at least 4.5 but lower than that of SADC of at least 6 months.
Exports of goods and services amounted to USD 12,767.6 million in the year ending June 2023, higher than USD 11,004.1 million in the previous year, driven by non-traditional exports, in particular minerals and services receipts.
Tanzania Goods Exports June 2023 (USD Millions)
Non-traditional Goods and Mineral Exports
Export of non-traditional goods recorded an annual growth of 4.2% largely driven by minerals, particularly gold, coal, and diamonds.
Coal exports increased by 297.5% to USD 229 million in the year to June 2023, from USD 57.6 million in the previous year, due to growing demand in the wake of supply shortages following the war in Ukraine.
Exports of diamonds almost doubled to USD 46.9 million from USD 29.6 million in the year ending June 2022, largely due to price effects.
As for gold exports, the increase was largely on account of volume effects.
Manufactured goods exports also recorded an annual growth of 6.1% to USD 1,402.2 million, largely driven by fertilizers and cement.
Exports of traditional goods slightly increased to USD 752.3 million from USD 737.8 million. The increase was mostly manifested in exports of tobacco, cotton, and coffee.
On a monthly basis, traditional goods worth USD 21.5 million were exported in June 2023 compared with USD 30.9 million in the similar month in 2022, while non-traditional exports increased to USD 584 million up from USD 545.3 million.
Service and Tourism Receipts
Services receipts amounted to USD 5,398 million in the year ending June 2023, higher than USD 3,906.7 million in the year ending June 2022, driven by travel (tourism) and transportation receipts.
The increase in travel receipts is mostly explained by the escalation in tourist arrivals, which rose by 45.9% to 1,638,850—the highest level reached historically—as the tourism sector continues to recover.
On a monthly basis, service receipts were USD 513.7 million in June 2023 compared with USD 390.5 million in June 2022.
Tanzania Service & Tourism Receipts June 2023 (USD Millions)