Agricultural exports dip by 55 per cent as gold sales volume grow by 25pc

Dar es Salaam. Tanzania’s agricultural export earnings have slumped by over a half in a year, which however saw gold earnings rising 25 per cent.

The 55 per cent drop which decelerated the traditional export earnings to $508.8m (Sh1.17tr) in the year to August 2019, was caused by a fall of either prices or volumes of the produce, including cashew nuts, cloves, tobacco and sisal, according to the latest monthly economic review of the Bank of Tanzania (BoT).

It was only coffee that saw increased volume due to good weather during harvest season.

Tourism is Tanzania’s leading foreign exchange earner with an annual average income of $2.3bn (Sh5.29tr) per year, followed by gold, transport services and manufactured goods.

Traditional exports – composed of agricultural produce – are now ranked fifth after dropping from $1.1bn (Sh2.53tr) in August 2018 to $508.8m (Sh1.17tr) this year.

“The value of traditional goods exports is expected to improve partly due to various initiatives to improve value addition and marketing,” stated the central bank.

It added that some produce like cloves did not perform well due to the cyclical nature of the crop while others were affected by the decrease of volume and price volatility in the world market.

The central bank said cashew nuts declined due to fall in both volume and unit price in the world market but did not provide the figures.

The government last season offered to purchase all cashews after traders offered prices it said were exploitative of farmers.

The government said recently that it sold all the cashews it was holding to other buyers but has not disclosed the amount and prices. The government had been unable to sell nearly 200,000 tonnes of the crop.

Agriculture accounts for almost 30 per cent of Tanzanian gross domestic product (GDP) and employs around 70 per cent of the working population.

Gold swell

Gold exports fetched $1.91bn (Sh4.39tr) in the year ending August 31, up from $1.53bn (Sh 3.52tr) the previous year.

The 25.1 per cent growth was driven by volume, and accounted for more than half of the nontraditional exports, the BoT said.

For the year ending August 2019, export of goods and services improved to $8.77bn (Sh20.17tr) from $8.71bn (Sh20.03tr) in the year ending August 2018.

On the other hand, imports amounted to $10.5bn (Sh24.15tr) in August 2019 compared with $9.9bn (Sh22.77tr) recorded previously.

“Capital goods imports, mostly for infrastructure projects, were the main drivers of the import bill and accounted for the largest share in goods import,” stated the BoT report.

National debt

External debt stock amounted to $21.75bn (Sh50.03tr) at the end of August 2019 and on annual basis, it increased by $1.16bn (Sh2.67tr) on account of new disbursements for development projects.

On interest rates, the average lending for all loans was 16.77 per cent in August 2019, lower than 16.86 per cent in the preceding month and 17.09 per cent in August 2018. Credit to the private sector also increased by 8.2 per cent, higher than 5.2 per cent in August 2018. Personal loans accounted for 29.5 per cent of all the loans.

It was followed by trade, manufacturing and agriculture.

The central bank said Tanzania’s inflation was still below the target of 5.0 per cent.