TZ economy endures commodity price shocks

THE external sector of Tanzania’s economy has continued to endure shocks emanating from high commodity prices and tight financial conditions aggravated by Russia-Ukraine conflict that caused supply disruptions.

The situation resulted in higher imports bills, particularly of goods that made the current account more than double to 3,766.9 million US dollars compared to 1,789.5 million US dollars in the corresponding period last year.

This is according to the Bank of Tanzania (BoT) monthly economic review for July, 2022.

In the review, the Central Bank, however, states that the overall balance of payments was a surplus of 75.6 million US dollars, rising from a deficit of 132.7 million US dollars, on account of loan receipts and grants.

The exports of goods and services amounted to 11,098.6 million US dollars during the year ending June this year from 8,848.4 million US dollars in the corresponding period a year before, driven by non-traditional exports and services receipts.

The exports of goods increased by 11.7 per cent to 7,202.7 million US dollars with non-traditional exports rising by 27.6 per cent driven largely by the exports of manufactured goods particularly iron and steel, textiles, horticultural products, fish and fish products as well as cereals in particular maize and rice.

Gold exports which accounted for 37.4 per cent of goods exports were 2,695.7 million US dollars down from 3,028.8 million US dollars. Exports of traditional goods amounted to 737.8 million US dollars compared to 578.4 million US dollars.

Exports of all traditional crops increased save for cashew nuts.

The increase was on account of price rises in the global markets. On a monthly basis, traditional exports doubled to 30.9 million US dollars from 14.1 million US dollars in June last year while non-traditional exports were 607.1 million US dollars in June this year compared to 522.4 million US dollars in June last year.

Services receipts amounted to 3,895.9 million US dollars in the year ending June this year compared with 2,402 million US dollars in the corresponding period last year driven by both travel (mainly tourism) and transport receipts.

Travel receipts increased to 1,707.9 million US dollars from 871.6 million US dollars consistent with the rise in tourist arrivals by 76 per cent to 1,123,607.

The rise in travel receipts signals recovery in the tourism sector, though it is threatened by the Russia-Ukraine conflict. On a monthly basis, services receipts were 337.3 million US dollars up from 213.7 million US dollars in the corresponding period last year.

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