Current account gap narrows
The Bank of Tanzania headquarters in Dar es Salaam. PHOTO|FILE
What you need to know:
According to a recent Monetary Policy Statement by the Bank of Tanzania, the deficit narrowed to $1.16 billion in the second half of 2015 compared with the shortfall of $2.08 billion in the corresponding period in 2014.
Dar es Salaam. The current account deficit narrowed by 44.2 per cent between July and December 2015, powered by increased exports and low import bill.
According to a recent Monetary Policy Statement by the Bank of Tanzania, the deficit narrowed to $1.16 billion in the second half of 2015 compared with the shortfall of $2.08 billion in the corresponding period in 2014.
“This improvement was mainly explained by the increase in exports of goods and services, coupled with the decline in the imports of goods and services,” the central bank said.
The value of gold exports increased by 11.1 per cent to $727.3 million due to volume effect as prices remained low. Export value of manufactured goods increasing by 7 per cent to $736.7 million while tourism earnings improved from $1.18 billion to $1.21 billion.
The value of imports of goods and services declined by 13.8 per cent to $4.71 billion during the same period compared with the amount recorded in the corresponding period in 2014.
This was driven by a decrease in goods imports as service payments increased marginally.
A significant decline was recorded in imports value of oil, building and construction equipment and food. The continued downward trend of oil prices in the world market largely explain the fall in the value of oil imports.
The oil import bill accounts for about 30 per cent of Tanzania’s total imports.
During the period under review, the average world market price of oil declined by 29 per cent to $582.2 per tonne compared with $823.9 per tonne recorded in the corresponding period in 2014, the central bank said.
The stock of gross official reserves (at the Bank of Tanzania) amounted to $4.09 billion as at end of December 2015, sufficient to cover about four months of projected imports of goods and services excluding those financed by foreign direct investments.
Gross foreign assets of the commercial banks amounted to $1.01 billion while foreign currency deposits by residents amounted to $2.93 billion at the end of December 2015
