Tanzania's trade surplus across East Africa rose to $484 million

Sunday January 09 2022
Tanzanian President Samia Suluhu Hassan and Kenya President Uhuru Kenyatta

Tanzanian President Samia Suluhu Hassan and Kenya President Uhuru Kenyatta during the Kenya-Tanzania Business forum at Serena Hotel, Nairobi, on May 5, 2021. FILE PHOTO | NMG

By The East African

Tanzania’s trade surplus across the East African Community region rose to $484.5 million in 2020, from $343.8 million the previous year, according to latest updated central bank figures.

The country also reported a highly-improved trade surplus of $1.09 billion with Southern Africa Development Community (SADC) countries, indicating a further expansion of its sub-Saharan trade network.

Kenya remained Tanzania’s main trading partner within the EAC bloc, accounting for 28.4 percent of intra-EAC exports and 76.4 percent of imports in 2020. Export figures to Rwanda, Uganda and Burundi also rose sharply while imports from those countries dwindled.

According to the Bank of Tanzania’s 2020/2021 Annual Report released on December 31, Tanzania exported goods worth $811.2 million to the EAC region in 2020, up from $678.5 million in the previous year, while imports from the bloc declined slightly from $334.7 million to $326.7 million.

Exports to Kenya were valued at $230 million in total against $249.6 million of imports. Exports to Rwanda hit the $207.7 million mark in 2020, up by over $15 million from 2019, while exports to Uganda and Burundi also registered much improved figures of $190.9 million and $179.1 million in 2020 against $124.4 million and $88.4 million in 2019, respectively.

General decline

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Two-way trade between Tanzania and Kenya experienced a general decline from 2019 when export-import figures recorded by BoT both hovered around $271 million, Tanzania’s exports to Kenya ($271.6 million) slightly exceeding imports ($271.4 million).

Tanzania also recorded a $19.6 million trade deficit with Kenya as trade disputes amongst the partner states escalated in the region.

Before that, the last time Tanzania officially registered more exports than imports with Kenya across an entire calendar year was in 2016 ($343.3 million to 292.9 million).

The country also registered an annual rise in its export figures to Rwanda to $207.7 million in 2020 from $192.1 million in 2019. The figure has been rising steadily from a low of $7.1 million in 2016, $61.9 million (2017) and $80.6 million (2018).

Tanzania remained Rwanda’s biggest source of imports with machinery, transport equipment, manufactured goods, food and live animals topping the import list.

However, reciprocal import figures from Rwanda stayed low at $2.3 million in 2020, and were even worse for Burundi at $300,000 on the two-way trade index.

Imports from Uganda were also swamped by exports, at $74.6 million against $190.9 million. South Sudan remained largely untapped with BoT recording just $3.4 million in export trade against zero imports from that country.

East African Payment System

Meanwhile, South Africa at 23.2 percent and soon-to-be EAC member state Democratic Republic of Congo at 2.41 percent, accounted for most of Tanzania’s 2020 trade in the SADC region.

Key exports to the SADC were gold, cigarettes, wheat flour and ceramic products while major imports from the region comprised motor vehicles, maize seed, iron sheets and lubricants, according to BoT.

Transactions on the East African Payment System, the region’s bank-to-bank payments and funds transfer platform using local currencies, increased by 51.1 percent to 4,455 in volume but decreased by 37.5 percent to $45.63 million in value during 2020.

In contrast, the volume and value of the Kenyan shilling transactions with Tanzanian banks increased by 60.5 percent and 46.1 percent to 4,525 and $87.6 million respectively, while transactions in Ugandan shilling also increased in volume and value by 25 percent and 54.9 percent to 510 and $5.6 million, respectively.

The value of incoming and outgoing transactions between Tanzania and Rwanda via EAPS increased in value from $2,766 to $17,174. Burundi and South Sudan, are yet to join EAPS.

By contrast, Tanzania registered 3,890 outgoing and incoming transactions via the SADC Integrated Regional Electronic Settlement System (SADC-RTGS) with a total value of South African Rand (ZAR) $188.3 million in 2020, a 203 percent increase in value compared with 2019.

“There was a noticeable growth in exports of rice, maize and beans to the neighbouring countries, reflecting an increase in regional trade,” the Bank Of Tanzania Monthly Economic Review December, 2021 report says.

According to the report, Tanzania’s imports of goods and services increased to $11.2 billion in the year ending November 2021, from $9.2 billion during the similar period in 2020.

“The increase was observed in all import categories, with a significant rise in oil, industrial raw materials and transport equipment.”

The statistics confirm the trade expert’s views that Tanzania seems to be directly benefiting from the impasse between Uganda and Rwanda, and Uganda and Kenya on the other hand.

In her New Year’s Eve speech, President Samia Suluhu attributed the growth in trade with neighbours to a review of the country’s laws and trade policies to suit the investment environment within the region.

In order to attract foreign investments, we deliberately reviewed some of our policies, laws, and taxes,” she said.

As a result, Tanzania attracted $4.144 billion in foreign direct investment (FDI) in 2021 with 237 projects, compared with $1.01 billion with 186 projects in 2020.

“Our main goal in 2022 is to promote the growth of our economy and the well-being of Tanzanians, as laid down in the National Development Plan 2021/2026,” said President Samia.

Tanzania’s trade with Kenya crossed the $200 million mark for the first time in 2021, with export figures hitting $182.6 million in the first half of the year, double the export figures from pre-pandemic levels.

Tanzania’s biggest exports to Kenya include cereals such as maize and rice, wood and vegetables.

On the other hand, Kenya’s exports to Tanzania include soap, coated flat-rolled iron, and packaged medicaments, which have increased in the past year.

Kenya and Tanzania have in recent months mended fences to eliminate barriers hindering the smooth flow of trade and people between the two East African nations.

The commitment arose from bilateral talks held between Kenyan President Uhuru Kenyatta and his Tanzanian counterpart President Samia, first during the May 2021 state visit to Nairobi and later on December, 9, 2021, when President Kenyatta signed bilateral agreements in Dar es Salaam.

“We still have a few administrative issues that we will thrash out early 2022,” said Johnson Weru, Kenya’s Trade Principal Secretary and co-chair of the bilateral talks between the two countries.