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Tanzania Economic Review, August 2023: Strong Growth in Coal Exports and Resilient Tourism Sector

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The Bank of Tanzania (BOT) released its Monthly Economic Review-September 2023 which covers key macroeconomic indicators for the year ending August 2023.

External Sector Performance

Global shocks, particularly the ongoing conflict in Ukraine, persistently affect Tanzania’s external sector.

Despite these challenges, there’s a silver lining as the current account balance shows signs of improvement, with a decrease of 5.72% from the previous year.

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This positive shift is largely due to the increased seasonal earnings from the tourism sector.

Foreign Exchange Reserves

The foreign exchange reserves saw an uptick of 2.28%, reaching USD 5,208.3 million by the end of August 2023.

These reserves are sufficient to cover 4.7 months of projected imports of goods and services, surpassing both the national and East African Community (EAC) benchmarks.

Exports

The year ending August 2023 witnessed a surge in the export of goods and services, totaling USD 13,140.8 million, a growth of 15.29% from the previous year. Non-traditional goods exports grew by 5.6%.

Coal exports saw a significant increase of 176.16%, while gold exports also saw a rise.

Manufactured goods exports experienced modest growth. Traditional goods exports climbed by 7.04%.

Non-traditional Goods and Mineral Exports

Non-traditional goods exports grew by 5.6%, with minerals like gold and coal leading the charge.

The value of coal exports skyrocketed due to increased demand, a direct result of supply shortages linked to the Ukraine conflict.

Gold exports also saw a rise, attributed to both volume and price factors. Manufactured goods exports experienced modest growth.

Traditional Exports

Traditional goods exports climbed by 7.04%, reaching USD 808 million, up from USD 754.8 million.

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However, not all goods in this category saw an increase, with cashew nuts and cotton being the exceptions.

On a monthly basis, traditional goods worth USD 95.9 million were exported in August 2023, showing a significant increase compared to USD 70.5 million in the same month the previous year.

Service and Tourism Receipts

Service receipts for the year ending August 2023 stood at USD 5,613.5 million, a jump of 31.22% from the previous year.

The tourism sector is on a path of recovery, with tourist arrivals increasing by 31.79%.

In August 2023 alone, service receipts saw a growth of 26.26% compared to the previous year.

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