TANZANIA: TANZANIA is poised to bolster its foreign exchange reserves through a strategic approach that includes expanding pulse exports and increasing gold purchases.
Recent data reveals that pulses have emerged as Tanzania’s second largest foreign exchange earner last year, following tobacco.
According to the International Trade Centre (ITC) of the United Nations, pulses’ export value surpassed that of cereals, coffee, tea, sesame, cotton and horticultural products, reaching over 274.6 million US dollars last year.
Zirack Andrew, National Coordinator of the Tanzania Pulses Network, highlighted the significant growth in pulse exports, emphasising their resilience and economic importance: “Pulses have outperformed many traditional commercial crops, signalling a shift in perception towards these vital commodities.”
In 2022, Tanzania exported pulses worth 183.8 million US dollars, down from 269 million US dollars in 2021 but showing resilience compared to previous years ($193 million in 2020 and $119 million in 2019).
“Pulses are not just crops of today but essential for our future economic stability,” Mr Andrew stressed. Last year, Tanzania exported a total of 447,943 tonnes of pulses, slightly less than 463,696 tonnes in 2021 and significantly higher than previous years, reflecting stable production despite global challenges.
“The rise in export value was largely driven by increased demand from key markets such as India,” noted Mr Andrew.
Tanzania holds a leading position in Africa for producing five commercially significant pulses: dry beans, chickpeas, pigeon peas, green grams, and cowpeas.
These crops are cultivated across various regions, including Manyara, Kagera, Kigoma, Mbeya, Mtwara, Dodoma, Njombe, Singida and Mwanza.
The country’s robust performance in pulse production ranks it as Africa’s top producer of dry beans and the second-largest producer of pulses continent-wide.
Globally, Tanzania stands among the top 10 producers of pulses. Meanwhile, Tanzania’s foreign exchange reserves remain strong, exceeding 5.0 billion US dollars as of June, capable of covering over four months of projected imports.
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The Bank of Tanzania’s (BoT) Monetary Policy Committee (MPC) plans to further bolster these reserves through strategic gold purchases.
“The BoT aims to diversify its foreign reserve portfolio by acquiring gold from local markets,” the MPC report stated.
Foreign currency liquidity improved towards June’s end, bolstered by increased inflows from tobacco, gold, and tourism sectors.
Anticipated further inflows from tourism, mining, and traditional exports are expected to sustain forex reserves.
Additionally, purchasing gold locally supports the domestic mining sector, fostering economic growth and generating additional forex through gold exports.
Measures to limit dollarisation and promote local currency transactions are set to further stabilise forex demand and boost reserves.
Experts emphasise that expanding pulse export markets reduces dependency on few commodities, thereby stabilising income and forex inflows.
Diversified export destinations mitigate risks associated with market volatility and demand fluctuations.
Furthermore, local value addition to pulses before export enhances their market value, leading to higher export prices and increased forex earnings.
Developing agro-processing industries concurrently creates jobs and stimulates economic growth, strengthening Tanzania’s forex position.
Tanzania’s strategic focus on expanding pulse exports and purchasing local gold promises to significantly bolster forex reserves, ensuring economic stability and sustainable growth.
