Tanzania’s current account deficit narrows to $4.02 billion in August on tourism earnings

Tanzania’s current account deficit narrowed to $4.02 billion in August this year as compared to $4.26 billion recorded during the preceding month of July according to the Bank of Tanzania (BoT) Monthly Economic Review for September.

“Notwithstanding the shocks, the current account balance has improved, attributed by heightened seasonal earnings from tourism activities,” the Central bank report says.

During August 2023, foreign exchange reserves increased by 2.3 percent to $5.20 billion from 5.09 billion recorded during the similar period in August 2022.

“The reserves were adequate to cover 4.7 months of projected imports of goods and services, which is above the country and the EAC benchmarks of at least 4 and 4.5 months, respectively,” the BoT report says.

Exports

The value of Tanzania’s export of goods and services amounted to $13.14 billion during August 2023, higher than 11.39 billion recorded during the corresponding period in 2022, driven by services’ receipts and non-traditional exports, particularly minerals.

The export of non-traditional goods recorded growth of 5.6 percent, driven by minerals, particularly gold, and coal.

The value of coal exports increased to $226.8 million in August 2023 from $82.2 million recorded in the

Corresponding period in 2022, owing to growing demand in the wake of supply shortages associated with the war in Ukraine.

“As for gold exports, the rise was largely due to both volume and price effects. Export of manufactured goods recorded modest growth, largely driven by fertilizers and glassware,” the report shows.