The Bank of Tanzania (BOT) released its Monthly Economic Review-April 2023 which covers key macroeconomic indicators for the year ending March 2023.
External Sector Performance
The external sector of the economy remained prone to the cumulative effects of the previous shocks, namely, the war in Ukraine and the effects of the Covid-19 pandemic, which significantly impacted global commodity prices.
Reflecting these challenges, the current account deficit widened significantly owing to a high import bill.
The balance of payments also recorded a deficit of USD 874.2 million, compared to a surplus of USD 990 million in the year to March 2022.
Correspondingly, the stock of foreign reserves declined to USD 5,012.5 million at the end of March 2023, from USD 5,581.6 million in the similar period in 2022.
Despite the decline, the reserves remained adequate, covering 4.5 months of projected imports of goods and services, in line with the country and the EAC benchmarks of at least 4 and 4.5 months, respectively.
Exports of goods and services amounted to USD 12,497.6 million in the year to March 2023, up by +21.1% from USD 10,318.6 million in the previous year, mostly driven by non-traditional exports, particularly manufactured goods and services receipts.
Non-traditional goods recorded an annual growth of 7.6%, driven by minerals; particularly gold, coal, and diamonds; and manufactured goods.
Iron and steel, fertilizer, and cement remained the main drivers of the increase in the export of manufactured goods.
Exports of coal increased by +601.5% to USD 223.8 million from USD 31.9 million in the year to March 2022, induced by rising demand for alternative energy, amid supply challenges caused by the war in Ukraine.
Exports of diamonds also increased significantly by +200% to USD 57.6 million from USD 19.2 million in the year to March 2022 following the resumption of production at Mwadui Williamson mines.
Likewise, gold exports increased to USD 2,877.3 million from USD 2,670.8 million (+7.7%), largely on account of the volume effect.
Exports of traditional goods also increased to USD 758.4 million, from USD 697.5 million (+8.7%).
All traditional crop exports increased except clove and tea—largely on account of price effects.
On a monthly basis, traditional exports amounted to USD 42.6 million, compared with USD 32.8 million in March 2022, while non-traditional exports increased to USD 520.6 million from USD 510.3 million.
Services receipts amounted to USD 5,090 million in the year ending March 2023, higher by 47.8% than USD 3,443.6 million in the corresponding period in 2022, largely explained by the increase in travel (tourism) and transport receipts.
Travel receipts almost doubled to USD 2,787.1 million associated with the increase in the number of tourist arrivals to 1,574,630, higher than the pre-pandemic levels, following the lifting of travel restrictions globally, coupled with promotional efforts for the sector by the Government.
On a monthly basis, service receipts were USD 417.4 million compared with USD 353.3 million in March 2022.