Tanzania’s external sector continued to be affected by cumulative effects of global shocks, particularly the war in Ukraine, which largely impacted the global commodity prices according to the Bank of Tanzania Monthly Economic Review for May, 2023.
Reflecting these challenges, the current account deficit widened to $5.29 billion in April 2023, from $2.98 billion registered in April 2022, explained by high import bill.
Similarly, the balance of payments recorded a deficit of $585.4 million, compared to a surplus $679.7 million in the year to April 2022.
According to the report, the stock of foreign exchange reserves considerably declined to $4.88 billion at the end of April 2023, from $5.46 billion registered in the similar period in 2022.
“Despite the decline, reserves remained adequate, covering 4.4 months of projected imports of goods and services, in line with the country benchmark of at least 4 months,” the report shows.
The value of Tanzania’s imports bill increased to $17.04 billion in April 2023, from $12.91 billion recorded in the corresponding period in 2022.
“All major import categories recorded increases, mostly owing to rise in commodity prices in the global market,” the report shows.
The import of white petroleum products was the main driver of the increase, accounting for 30.9 percent of the change recording an annual growth of 45.3 percent to $3.29 billion largely on account of price effect
“On a monthly basis, goods worth $939.3 million were imported in April 2023, lower than $1.10 billion registered in April 2022, mostly driven by intermediate goods, in particular petroleum products, attributed to price easing,” the report shows.
Consistent with the increase in goods import bill, services payments rose to $2.64 billion in April 2023 from $1.84 billion recorded in the corresponding period in 2022, mainly driven by freight payments.
“On a monthly basis, services payments were $195.4million, compared with $173.5 million recorded in April, 2022,” the report shows.