TZ spends less on petroleum imports
DAR ES SALAAM: TANZANIA spent 34 per cent less on petroleum imports in 2024 than it did in 2013, even as the amount of oil brought into the country fell by only seven per cent. According to Bank of Tanzania data, the petroleum import bill fell from 4.31 billion US dollars in 2013 to 2.84 billion US dollars in 2024.
Over the same period, the volume imported declined from 4.44 million tonnes to 4.14 million tonnes. This means Tanzania was still importing about 93 per cent of the 2013 volume, but spending only about 66 per cent of the 2013 amount. The country did not achieve the lower oil bill primarily by importing dramatically less oil. It achieved it through a much lower average import value per tonne.
The difference becomes clearer when the import value is considered against the volume. The implied average import value per tonne fell from about 971 US dollars in 2013 to 686 US dollars in 2024, a decline of roughly 29 per cent. The figures therefore show that Tanzania’s petroleum import bill fell much faster than the physical quantity of petroleum imported.
This suggests the improvement in the import bill was driven far more by the value attached to each tonne than by a major reduction in the quantity imported. The data alone do not show how much of the reduction in the average value per tonne was due to international petroleum prices and how much reflected changes in the mix and valuation of petroleum products.
However, Tanzania spent substantially fewer dollars on almost the same physical quantity of petroleum in 2024 as it did in 2013. The more revealing question may therefore lie elsewhere in the import figures. While petroleum imports fell by 1.47 billion US dollars between 2013 and 2024, capital-goods imports rose by 2.57 billion US dollars, reaching 6.03 billion US dollars from 3.46 billion US dollars.
That change suggests it is increasingly likely that Tanzania’s import basket is evolving, with a declining petroleum burden occurring alongside a substantial expansion in machinery, transport equipment and construction-related imports. A Dar es Salaam-based banker and economist Dr Hildebrand Shayo said the figures point to an important foreign-exchange benefit that is often overlooked.
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“When Tanzania can meet nearly the same petroleum needs at a lower cost, it frees up scarce foreign exchange for other uses,” Dr Shayo said.
The 1.47 billion US dollars freed up should not, however, be treated as a pure policy or efficiency saving because international oil prices and changes in product composition also influence the import bill, he said. Dr Shayo said the economic significance lies in what happens to the foreign exchange that is no longer required for petroleum imports.
The dollars could instead support imports of capital goods, machinery, technology, medicines, fertiliser and other productive inputs, potentially easing pressure on the foreignexchange market while supporting investment and domestic production.
“The key issue is how the foreign exchange savings are utilised,” he said, adding that the developmental impact would be limited if the freed-up dollars were simply absorbed by additional consumption imports.
The data therefore show something more significant than a smaller petroleum bill: Tanzania spent substantially fewer dollars in 2024 to bring in almost the same physical quantity of petroleum as it did in 2013. That changes the question behind the falling import bill.
Dr Shayo said such a shift could create an opportunity for foreign exchange previously absorbed by fuel imports to support productive sectors, including infrastructure, manufacturing, agriculture, energy, technology and export capacity. The shift suggests a potentially important change in the composition of Tanzania’s import basket: a lower petroleum burden has coincided with a substantial expansion in imports of machinery, transport equipment and other capital goods.
