External demand recovery bolsters external sector
DAR ES SALAAM: THE exports of goods and services continued to strengthen, primarily fuelled by a rebound in external demand.
The latest Bank of Tanzania (BoT) monthly economic review for December of last year shows that the external sector continued to improve, in line with the recovery of both domestic and global conditions.
“The improvement in the external sector is crucial because it indicates a positive shift in economic conditions that supports increased exports, trade balance and overall economic growth,” stated the Bank report.
A stronger external sector fosters greater foreign exchange inflows, reduces the current account deficit and enhances a country’s ability to navigate global economic challenges, ultimately benefiting businesses, employment and national prosperity.
During the period under review, the current account deficit narrowed by 35 per cent to 2.03 billion US dollars in the period ending November last year.
The improvement was associated with an improved exports performance and relatively low import bills. The exports amounted to 15.87 billion US dollars in the period ending November last year, up from 13.90 billion US dollars in the same period in 2023, with minerals, agricultural products, manufactured goods and service receipts being the primary contributors.
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Goods exports amounted to 8.88 billion US dollars higher than 7.77 billion US dollars exported in November 2023. Mineral exports accounted for the largest share, with gold amounting to 3.32 billion US dollars representing 83.1 per cent of mineral exports and 37.4 per cent of goods exports.
A notable increase was also registered in vegetables, oil seeds and fish and fish products. Month-on-month, exports of goods amounted to 1.07 billion US dollars in November last year compared to 733.9 million US dollars in a similar period in 2023.
Services receipts were 6.98 billion US dollars in the period ending November last year, a 14 per cent increase over the same period in 2023. The improvement was ascribed to increased earnings from travel (tourism) and transportation.
Travel receipts accounted for 23.2 per cent of total exports of goods and services and increased by 11.1 per cent to 3.68 billion US dollars driven by increased number of tourist arrivals that rose to 2,106,870 tourists from 1,781,214 tourists in the year ending November 2023.
Transport earnings increased to 2.72 billion US dollars up from 2.35 billion US dollars owing to improved transportation infrastructure.
On monthly basis, service receipts increased to 559.6 million US dollars in November last year, up from 502.1 million US dollars in November 2023.
