Tanzania Current account narrow in June


Mnaku Mbani
The Tanzania current account narrowed by more than half to a deficit of USD 1,885.3 million from a deficit of USD 4,343.5 million in June 2015, the monthly economic review for July published by the Bank of Tanzania has said.
According to the review, this was largely driven by improved performance of non-traditional exports and services, coupled with a decline in imports, particularly oil.
The performance of exports of goods and services slightly improved to USD 10,096.9 million compared with the USD 9,310.6 million in the year ending June 2015 due to a diverse domestic and external factors.
The improvement, however, was manifested in non-traditional export commodities and services receipts. In fact, a large part of the improvement occurred in travel (which is mainly tourism), manufactured goods and gold.
The value of traditional exports dropped by 8.8 percent to USD 828.0 million, driven by volume and prices. Notably, cotton and cashew nut declined on account of both volume and prices, while tobacco recorded low export value following a decline in price.
 The fall in prices of these traditional export crops was consistent with the general decline in commodity prices in the world market. The increase in global production was a major contributing factor.
Export of cotton also declined, but this was due to low production during 2015/16 crop-season following unfavourable weather and delays in procurement and application of inputs.
By contrast, foreign exchange earnings from export of sisal and coffee increased, the former owing to a rise in both volume and prices and the later manifested only in export volume.
As regards non-traditional exports, the value increased by 15.3 percent to USD 4,595.1 million, driven mostly by manufactured goods, gold, diamond, re-exports and several small exports classified under ‘other exports.
In particular, manufactured goods grew by 11.1 percent to USD 1,462.6 million, with a notable improvement recorded in exports of textile apparel and plastic items.
Gold export, which constitutes the largest share of non-traditional exports, recovered slightly amidst subdued prices in the recent period. This time around, it improved by 7.9 percent to USD 1,334.6 million as result of increase in export volume.

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