Tanzania: Zanzibar Current Account Deficit Narrows

ZANZIBAR current account recorded a deficit of 23.0 million US dollars in the

year ending May compared with 57.3 million US dollars in the corresponding period in 2019, largely driven by increase in exports and current inflows.

According to the Bank of Tanzania (BoT) monthly economic review for June, goods account recorded a deficit of 234.7 million US dollars, while service account recorded a surplus of 104.4 million US dollars.

On month-to-month basis, current account balance recorded a surplus of USD 3.6 million, lower than a surplus of 7.1 million US dollars in a similar period in 2019, partly resulting from a decline in service receipts.

Export of goods and services rose to 238.1 million US dollars from 190.3 million US dollars in the year ending May last year. This performance is largely explained by an increase in export of cloves and seaweeds.

Earnings from cloves export increased to 19.2 million US dollars from 1.3 million US dollars in the corresponding period in 2019, while that from seaweed was 5.2 US dollars compared with 4.1 million US dollars.

The dominant seaweed export variety continued to be seaweed of spinosium type. In the meantime, goods and service imports rose to 368.4 million US dollars from 299.2 million US dollars registered in the year ending May last year.

Much of the increase was recorded in capital goods, in particular building and construction materials, and machinery.

On monthly basis, import of goods, free on board were 14.0 million US dollars compared with 11.1 million US dollars recorded in the preceding month and 23.6 million US dollars in the corresponding period in 2019.

The decline in imports in recent months is largely attributed to disruption of global supply chain in source countries, including India, Pakistan and United Arab Emirates which resulted from the outbreak of coronavirus pandemic.