Tanzania’s current account deficit hits $5.2 billion in February 2023

Tanzania’s current account recorded a deficit of $5.29 billion in February 2023 compared with a deficit of $2.74 billion recorded in the corresponding period in 2022  according to the Bank of Tanzania (BoT) Monthly Economic Review for March 2023.

The overall balance of payments also had a deficit balance of $1.29 billion compared with a surplus of $801.9 million posted in February 2022 last year.

The stock of foreign exchange reserves declined to $4.57 billion at the end of February 2023 from $5.85 billion at the end of February2022.

“The reserves were sufficient to cover 4.1months of imports, in line with the country benchmark of at least 4 months,” the BoT report said.

Meanwhile, the value of Imports of goods and services amounted to $16.99 billion in February 2023 compared with $12.29 billion recorded in February 2022.

“All major imports categories recorded increases, owing to a rise in prices of commodities attributable to the disruption of global supply chain,” according to the report.

 Much of the increase in import bill was on account of oil, which accounted for 33.5 percent of the increase.

Other items with significant contribution to the increase in import bill were machinery and mechanical appliances, industrial transport equipment and fertilizers.

The imports of edible oil declined, owing to volume effects as prices remained elevated reflecting government’s efforts to increase domestic production.

“On monthly basis, the import of goods edged up to $1.004 billion, from $905.8 million in February 2022,” the report shows.

Services payments also increased to $2.59 billion from $1.72 billion in February 2022, largely driven by freight payments consistent with the rise in import of goods.

“On monthly basis, services payments amounted to $218.7 million in February 2023, compared with $156.2 million in the similar month of 2022,” the report shows