Exports surge narrows current account deficit

DAR ES SALAAM: BUOYED by stronger exports of goods and services, Tanzania’s current account deficit narrowed to 2.16 billion US dollars in the year ending February, marking an improvement from 2.91 billion US dollars in the same period last year.

The latest data from the Bank of Tanzania Monthly Economic Review attributes the trend to growing external sector performance amid ongoing efforts to boost trade and diversify exports.

This performance is mainly attributed to the increase in earnings from exports of goods and services.

“The increase in earnings from goods and services exports not only helped narrow the current account deficit but also signals stronger foreign exchange inflows, which are crucial for stabilising the shilling, supporting foreign reserves and creating more room for economic growth,” the Bank said.

During the period, exports of goods and services grew by 18.8 per cent, reaching 16.74 billion US dollars, up from 14.09 billion US dollars in the corresponding period in 2024.

The growth was driven primarily by higher earnings from gold exports, a rebound in travel and tourism, increased agricultural exports and a notable rise in transportation services.

According to the BoT report, exports of goods which make up 58 per cent of total exports of goods and services rose to 9.74 billion US dollars in the year ending February, up from 7.76 billion US dollars in the same period in 2024.

This growth was largely fuelled by strong performances in key commodities such as gold, cashew nuts, tobacco, coffee and horticultural products.

Gold exports surged to 3.66 billion US dollars from 3.11 billion US dollars in the previous year, largely driven by higher prices in the global market.

Traditional exports also rose on account of an increase in the production of cashew nuts and coffee.

A slowdown was observed in the export of manufactured products owing to a decrease in exports of fertilisers, cement and wheat flour.

On a monthly basis, BoT said goods exports rose to 851.9 million US dollars in February, up from 516.7 million US dollars in the same month last year, driven mainly by increased shipments of gold and cashew nuts.

Service receipts rose by 10.6 per cent to 7.00 billion US dollars during the month, from 6.33 billion US dollars in a similar period last year.

Much of the increase was registered in travel receipts, which accounted for 56.3 per cent of services receipts, associated with a surge in international arrivals to 2,169,208 from 1,881,823 in the corresponding period last year.