Miners inside the Buzwagi gold mine in Shinyanga. Picture: File
By ADAM IHUCHA Special Correspondent
In Summary
- During the period under review, forex reserves shrank to $4.5 billion lower than the targeted $4.6 billion, registering a 2.1 per cent drop.
- Tanzania’s current reserves can only facilitate the country’s import of goods and services for the period of 4.4 months, slightly below the projected target of 4.5 months, latest statistics indicate.
- Gold is a key foreign exchange earner for Tanzania, accounting for about 40 per cent of the country’s export earnings.
Tanzania’s export value dropped by two and a half per cent in the year ending November 2013, putting pressure on forex reserve.
Last year, fresh economic data shows export value
dropped to $7.7 billion from previous year’s $7.9 billion representing a
2.5 per cent drop.
During the period under review, forex reserves
shrank to $4.5 billion lower than the targeted $4.6 billion, registering
a 2.1 per cent drop.
Reserves are used to give the currency market the
needed buffers in times of shocks, and when the market is volatile, the
central bank would have the capability to intervene to calm the market.
The level of reserves is dependent on factors such
as the increase in the value of imports against exports and movement in
the value of currencies to the dollar.
Tanzania’s current reserves can only facilitate
the country’s import of goods and services for the period of 4.4 months,
slightly below the projected target of 4.5 months, latest statistics
indicate.
The tumble in exports has been attributed to a
relative fall in global appetite for Tanzania’s key traditional
commodities such as coffee, cotton, cloves, sisal, tea and gold.
The Bank of Tanzania said in its monthly economic
review in September last year that the value of gold export declined
from $2.15 billion in the year ending September 2012 to $1.748 over the
same period last year.
Export value of gold plummeted due to a fall in both export volume and unit price.
Export unit price for gold tumbled by 8.2 per cent
to an average of $1,524.59 per 31 grammes from the price recorded in
the year ending September 2012.
The fall of gold export partly affected the
performance of export of goods and services that declined 1.4 per cent
to $8.242 billion during the year ending September last year compared
with $8.362 billion recorded over the same period in 2012.
Gold is a key foreign exchange earner for Tanzania, accounting for about 40 per cent of the country’s export earnings.
The sector employs about 8,134 Tanzanians and 600
expatriates, in addition to supporting the economies of Kahama, Tarime,
Geita, Mwadui, Mbeya, Biharamulo, Mwanza, Nzega and Sengerema towns.
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