Tanzania Current Account Deficit Narrows

TANZANIA current account narrowed to a deficit of 893.7 million US dollars in the year ending October 2020, more than a half of the deficit of 1,615.2 million US dollars recorded in the

corresponding period last year on account of improved increase in export of goods, combined with decrease in imports.

According to the Bank of Tanzania (BoT) monthly economic review for November, the overall balance of payments recorded a deficit of 568.3million US dollars compared with a surplus of 200.4 million US dollars in the corresponding period last year owing to relatively low official flows.

The exports of goods and services amounted to 8,856.5 million US dollars in the year ending October compared to 9,393.1 million US dollars in the year ending October 2019.

In October this year the exports of goods and services amounted to 757.8 million US dollars lower compared to 1,032.4 million US dollars in October last year.

Traditional exports increased to 788.5 million US dollars in the year ending October from 696.2 million US dollars in the corresponding period in 2019.

Much of the increase featured in exports of cashew nuts, cotton, cloves, tobacco and sisal. Cashew nuts and sisal exports rose on account of increase in both volume and unit prices.

The exports of cotton, cloves and sisal rose on account of an increase in export volume, supported by increased production. The exports of coffee and tea declined due to low export volume.

On month-to-month, traditional goods exports declined to 80.3 million US dollars from 206.6 million US dollars in the corresponding month last year largely explained by low exports of cashew nuts, tobacco, cotton and sisal.

Exports of non-traditional goods improved to 5,076.7 million US dollars in the year ending October from 4,070.8 million US dollars in the corresponding period in 2019, owing to increase in exports of gold, mineral concentrates, horticulture and manufactured goods.

During the period, gold, which accounted for 55.8 per cent of total nontraditional exports, increased by 35.9 per cent to 2,833.2 million US dollars associated with export volume and price effects.

On month-to-month, export value of gold increased to 259.3 million US dollars from 252.2 million US dollars in October last year owing to increase in volume of gold coupled with rising gold prices.

Services receipts amounted to 2,688.1 million US dollars in the year ending October lower than 4,231.8 million US dollars in the corresponding period in 2019.

The travel receipts, which mostly comprise receipts from tourism, declined by 50.1 per cent to 1,292.2 million US dollars.

This was attributable to the measures taken to limit the spread of Covid-19 in tourist source countries.

The measures included lockdown and suspension of international passenger flights. During October this year the travel receipts amounted to 57.9 million US dollars compared to 229.4 million US dollars in October last year.