Cost of goods in Dar could drop as import bill falls

Port of Dar es Salaam. In the period ending January 2017, exports of goods and services increased by 5.1 per cent to $9.3 billion. Improvements were observed in the export of gold, horticultural products and some commodities categorised as “other exports,” which includes raw hides and woods. PHOTO | FILE 

By JOSEPH MWAMUNYANGE

In Summary

• During the period ending January 2017, exports of goods and services increased by 5.1 per cent to $9.3 billion, mainly gold, traditional crops and travel receipts.
• The current account narrowed to a deficit of $1.8 billion million, compared with a deficit of $3.8 billion in the corresponding period in 2016.
• The country is expected to register a reduction in exports of gold because of the recent ban on export of copper concentrates by the Tanzanian government.

Tanzania has registered a reduction in its current account deficit due to increased exports and a shrinking import bill.

The Bank of Tanzania’s monthly economic review shows that during the period ending January 2017, exports of goods and services increased by 5.1 per cent to $9.3 billion.
The improvement was registered in the exports of gold, traditional crops and travel receipts.

During the period under review, the current account narrowed to a deficit of $1.8 billion million, compared with a deficit of $3.8 billion in the corresponding period in 2016.
According to the report, non-traditional exports grew by 4.1 per cent year-on-year to $4.3 billion in January 2017.

Improvements were observed in the export of gold, horticultural products and some commodities categorised as “other exports,” which includes raw hides and woods.
Exports of gold grew by 29.8 per cent in value to $1.5 billion due to a recovery in prices in the world market and increases in volumes.

The country is expected to register a reduction in exports of gold because of the recent ban on export of copper concentrates by the Tanzanian government.

READ: How Magufuli copper concentrate prophesy came to pass
Exports of manufactured goods declined to $1.07 billion from $1.3 billion in the year ending January 2016.

Imports of goods and services amounted to $10.5 billion in the year ending January this year. This was 15.3 per cent lower than the import bill in the corresponding period in 2016.

Industrial raw materials
All the categories of import goods declined except for industrial raw materials. A significant decline was marked in capital goods, oil, fertilisers and food stuffs.

The import bill for oil, which accounts for the largest share of import goods, declined by 11.6 per cent to $2.5 billion due to a fall in prices in the world market.
Tanzania benefited from a decrease in world oil prices notably.

The price of white petroleum products in the world market declined by 16.7 per cent to $516.3 per tonne from $619.6 per tonne in the year ending January 2016. This contributed to the country’s reduced import bill.
Services receipts amounted to $3.6 billion in the year ending January 2017, close to $3.5 billion recorded in the same period in 2016.

An increase in the number of tourist arrivals from 1,138,287 to 1,314,625 visitors boosted travel receipts that increased by 5.5 per cent to $2.13 billion.

However, services payments amounted to $2.08 billion in the year ending January 2017, compared with $2.6 billion in the year ending January 2016.

According to the Bank of Tanzania report, the decline was on account of decline in travel and transportation payments.

Payments under transportation; particularly freight, which constitutes the largest share of services payments, declined by 13.3 per cent consistent with the fall in imports.

Foreign exchange from the export of traditional crops increased to $941.9 million from $768.5 million in the year ending January 2016. This was mostly contributed by an increase in export volumes and prices of cotton, tobacco and cashew nuts.

By contrast, export values of coffee, sisal, tea and cloves declined. The decline in coffee exports was manifested in price, as volumes increased; while the value of sisal and tea declined on account of a fall in volumes.

In the case of cloves, their exports saw a fall on account of a drop in both volume and price.