Zanzibar current account surplus rises sharply

ZANZIBAR: ZANZIBAR’S current account surplus increased sharply, supported by a strong rebound in tourism and higher service receipts.

The surplus rose by 34.7 per cent to 558.5 million US dollars in the year ending July, up from 414.8 million US dollars recorded a year earlier.

The sharp increase in Zanzibar’s current account surplus signals strengthening of external sector performance, which is vital for sustaining foreign exchange reserves and macroeconomic stability.

According to the Bank of Tanzania’s latest Monthly Economic Review, the growth in tourism-related service receipts not only reflects the ongoing rebound in global travel but also highlights the sector’s vital role in driving income generation, employment creation and investment opportunities.

A healthier current account also enhances the government’s fiscal space and resilience against external shocks such as commodity price fluctuations or global financial tightening.

Exports of goods and services grew by 31 per cent to 1,209.5 million US dollars from 923 million US dollars recorded in the year ending July last year.

The performance was mainly on account of increased service receipt, particularly from tourism, which rose by 37.1 per cent to 1.18 billion US dollars.

The increase was largely supported by favourable developments in the tourism sector, with the number of visitors rising to 828,752 in the year ending July up from 672,956 recorded in the corresponding period last year.

In contrast, the value of clove exports declined by 87.6 per cent to 3.6 million US dollars from 28.8 million US dollars reflecting the crop’s cyclical production pattern.

On a monthly basis, exports of goods and services rose to 141.6 million US dollars from 99.7 million US dollars recorded in July last year.

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Imports of goods and services rose by 4.7 per cent to 584 million US dollars in the year ending July from 558 million US dollars recorded in the similar period last year.

The performance was mainly due to increased imports of capital and consumer goods. Imports of capital goods rose by 2.5 per cent to 50.3 million US dollars from 49.1 million US dollars mainly due to increased imports of electrical machineries and equipment.