Expanding consumption, economy drive up import bill

DAR ES SALAAM: Rising domestic demand for essential commodities has driven up Tanzania’s import bill, reflecting the country’s expanding consumption capacity and economic growth.

According to the latest Bank of Tanzania (BoT) Monthly Economic Review for September, the imports of goods and services increased by 2.2 per cent to 16.45 billion US dollars in the period ending September this year up from 16.10 billion US dollars in the previous year.

“The increase was primarily driven by goods imports, particularly refined white petroleum products, which accounted for 19.7 per cent of total goods imports,” the report noted.

The increased imports reflect rising industrial activity, infrastructure development and a growing consumer market, indicating economic expansion.

The other imports with notable increases were industrial-use sugar, iron and steel and footwear.

The notable increase in imports of industrial-use sugar, iron and steel and footwear highlights key trends in Tanzania’s growing industrial and consumer markets.

The industrial-use sugar is crucial for manufacturing, particularly in food production and beverages.

Its rise in imports suggests that Tanzania’s manufacturing sector is expanding, which is indicative of increasing domestic production capacity and greater demand for raw materials.

This shift reflects a growing appetite for locally made products, including processed food and beverages, signalling economic development.

Similarly, the increase in imports of iron and steel is significant for infrastructure development. These materials are essential for construction projects, including roads, bridges and buildings.

As the country advances in urbanisation and industrialisation, the demand for construction materials will continue to grow, signalling a dynamic and evolving economy.

Furthermore, as the country’s middle class grows and purchasing power increases, demand for both basic and luxury consumer goods such as footwear is on the rise.

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The surge in imports of footwear highlights the changing lifestyle and preferences of Tanzanians, with many opting for a variety of brands and styles, driving the retail market and contributing to the overall economic growth.

This growing demand for consumer goods signals a vibrant economy with increasing opportunities for businesses in retail and manufacturing.

On a monthly basis, goods imports amounted to 1,462.7 million US dollars in September this year compared to 1,468.3 million US dollars in similar month last year.

The deficit in the primary income account widened to 1,816.3 million US dollars in the year ending September this year from 1,467.4 million US dollars in the previous year owing to higher interest payments.

On a monthly basis, the deficit was at 167.6 million US dollars compared to 112.1 million US dollars in September last year.

The secondary income account recorded a surplus of 553.7 million US dollars lower than 641.6 million US dollars last year, supported by personal transfers.

During the month, the secondary income account surplus was 45.8 million US dollars slightly lower than 48.6 million US dollars in September last year.