Tanzania continues to perform poorly in international markets

By Abela Msikula

 Tanzania’s international commercial and financial transactions continue to be unfavourable despite decline of its balance of payments (BoP) deficit in the year ending September 2015.

 

According to new Bank of Tanzania (BoT) figures, the BoP narrowed to a deficit of US$213.1 million compared with a deficit of US$267.8 million in the year ending September 2014. The overall balance of payments recorded a deficit of US$233.1 million during the year ending August.

 

The BoP improvement in September was mostly driven by increase in the export of goods and services that went up to US$9.37 billion from US$8.59 billion during the corresponding period in 2014.

 

The import bill decreased by 0.9 per cent from US$13.47 billion to US$13.35 billion following a decrease in the value of goods imported particularly oil and consumer goods such as food and food stuffs as well as pharmaceutical products, paper products, plastic items and textile apparels.

 

The trade balance deficit for the two periods was US$4.12 billion and US$4.76 billion respectively.

 

The October monthly economic review (MER) attributes the overall BoP improvement to the more favourable non-capital transactions (current account) balance.

 

 “The overall balance of payments narrowed to a deficit of US$213.1 million compared with a deficit of US$267.8 million in the year ending September 2014. This was driven by improved current account balance,” the MER reads in part.

 

“During the year ending September 2015, the current account balance narrowed by 13.6 per cent to a deficit of US$4.23 billion from the corresponding period in 2014. This outturn was mainly on account of an increase in export of goods and services,” it adds.

 

During the year ending August 2015, current account balance narrowed by 16.6 per cent to a deficit of US$4.34 billion from a deficit that was recorded in the corresponding period in 2014.

 

Meanwhile, gross official reserves amounted to US$3.99 billion at the end of September 2015, sufficient to cover 3.8 months of projected imports of goods and services excluding those financed by foreign direct investment. 

In addition, notes BoT in the MER, gross foreign assets of banks amounted to US$1.24 billion at the end of September 2015.

  

Figures in the report show that manufactured goods exports are about to catch up with gold after hitting US$1.26 billion during the year under review from US$1.20 billion and US$985.5 million in similar periods in 2014 and 2013 respectively.

 

Gold exports dwindled to US$1.30 billion from US$1.40 billion in the year ending September 2014 and the 2013 level of US$1.74 billion.