Tourism, gold top forex earnings

SEBASTIAN MRINDOKO

TOURISM industry and gold exports continue to be the largest foreign exchange earner contributing to the substantial narrowing of the current account deficit.

According to the Bank of Tanzania (BoT) monthly economic review for December, earnings from tourism industry increased to 4.95tri/- in the period ending November last year, which is 10.3 per cent higher than 4.49tri/- in October. Transport receipts improved by 3.9 percent to 2.35tri/- due to increased transit goods to and from neighbouring countries.

Export value of gold increased by 23.7 percent to 3.23tri/-due to recovery in price in the world market and increase in volume. Gold prices in the world market, recovered by 6.1 percent to 1,242.2 US dollars in November 2016 from the corresponding period in the previous year.

Similarly, the value of cotton, tea, tobacco and cashew nuts increased on account of both volume and price whilst cloves export improved as a result of volume as price declined.

According to the report, there are good prospects for cashew nuts during 2016/17 crop season as the season started with higher producer prices in the wake of increased demand from Vietnam and India. Consequently, the current account substantially narrowed to a deficit of 1,950.2 million US dollars from a deficit of 4,494.6 million US dollars recorded in the year ending November 2015.

The value of coffee and sisal exports decreased due to fall in both price and volume. On the other hand, the value of export of manufactured goods dropped by 15.6 percent to 1,145.7 million US dollars. During the year ending November 2016, import value of goods and services declined by 15.8 percent to 10,257 million US dollars.

The decline in imports manifested mostly in consumer goods and capital goods; largely due to completion of major projects such as construction of cement factory, power plants and exploration activities. The oil import bill, which dominates goods import, went up by 7.8 percent to 3,087.5 million US dollars on account of increase in volume.