Exports boost external position recovery momentum
DAR ES SALAAM: TANZANIA’S balance of payments position continued to improve in the year ending August, driven by a stronger trade balance as exports outpaced imports.
The trend reflects the impact of rising commodity exports and moderating global import prices, which together helped narrow the country’s current account deficit.
According to the Bank of Tanzania, the current account deficit narrowed to 2.02 billion US dollars in the year ending August, from 3.06 billion US dollars a year earlier, largely driven by strong growth in exports of goods and services alongside a slowdown in import growth.
This positive shift in the trade balance reflects improved competitiveness in key export sectors, alongside a moderated import demand resulting from currency stabilisation and targeted policy measures aimed at reducing external vulnerabilities, the central bank.
The narrowing deficit also signals a healthier external position, which can help strengthen investor confidence and support macroeconomic stability moving forward.
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A more favourable trade balance, characterised by higher export growth relative to import bills explains the improvement. Against this backdrop, the external sector’s performance continued to strengthen, reflecting a resilient trade position despite persistent global trade tensions.
This resilience underscores the effectiveness of policy interventions and the adaptability of key export sectors in navigating a challenging external environment. During the period under review, the export of goods and services registered an annual growth of 14.8 per cent to 16.89 billion US dollars in the year ending August.
On the other hand, goods exports alone amounted to 9.88 billion US dollars, marking a significant increase of 22.7 per cent compared to the year ending August of the previous year.
The BoT report highlights that this growth was driven primarily by increased exports of gold, manufactured goods, cashew nuts, tobacco and cereals.
This indicates a broad-based improvement across both traditional and non-traditional export sectors, reflecting enhanced production capacity, favorable global prices and improved market access for key commodities.
During the period, told exports rose significantly by 35.5 per cent to 4.32 billion US dollars, largely driven by elevated global prices.
This strong performance not only reflects favourable conditions in the international commodity markets but also underscores gold’s continued role as a key contributor to the country’s export earnings and overall external sector stability.
According to the report, the traditional exports improved to 1.41 billion US dollars, a 28.3 per cent increase, owing to strong exports of cashew nuts, tobacco and coffee, associated with both price and volume effects.
Cereal exports recorded a notable increase to 341.2 million US dollars from 174.6 million US dollars, supported by increased demand from the neighbouring countries.
On a monthly basis, exports of goods amounted to 1.02 billion US dollars in August up from 922.4 million US dollars in August last year largely driven by gold and tobacco exports.
