Transport dominates service payments bill
DAR ES SALAAM: TRANSPORT payments accounted for the largest share of service payments, rising to 1,829.8 million US dollars in the year ending August from 1,454.0 million US dollars in the corresponding period last year, reflecting increased expenditure on transport-related services.
According to the latest Bank of Tanzania Monthly Economic Review, total service payments increased to 3,498.2 million US dollars from 3,196.2 million US dollars, highlighting the growing cost of services acquired from abroad.
The report shows that transport payments rose by 25.8 per cent, making the category the largest contributor to the country’s service import bill. Such payments include costs associated with transporting goods and other transport-related services.
The increase comes as Tanzania continues to participate in international trade, where freight and shipping charges form part of the cost of importing goods.
Higher transport payments can increase the overall cost of imports and place additional pressure on foreign exchange demand.
Payments for other services declined to 976.4 million US dollars from 1,066.6 million US dollars in the year ending August last year.
The category includes services such as financial, insurance, telecommunications, information technology and other business services.
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Meanwhile, travel payments increased to 692.1 million US dollars from 675.7 million US dollars, indicating a modest rise in expenditure on travel-related services abroad.
The report shows that transport remained the largest component of service payments, accounting for more than half of the total in the period under review.
The overall increase in service payments highlights the importance of monitoring expenditure on imported services as Tanzania seeks to strengthen its external sector performance.
For businesses involved in international trade, transport costs remain an important consideration because they influence the final cost of imported goods and the competitiveness of exports.
Improving transport efficiency, strengthening local service capacity and reducing avoidable logistics costs could help limit pressure from transport-related payments.
