Current Account Deficit further on the Increase

Tanzania’s current account deficit widened 26.1% in the year to September following a decline in receipts of aid and loans, its central bank said yesterday. The deficit narrowed to US$ 4.676bn in the 12 months to September from US$ 3.707bn during the same period last year. “Official current transfers declined by 43.7% from the levels recorded in the year ending September 2012 resulting into widening of the current account deficit by 26.1%,” the Bank of Tanzania said in its latest monthly economic report.

The bank did not explain the sharp fall in official current transfers which are composed of aid and loans from external sources. Tourism earnings outpaced gold exports as the country’s top foreign exchange earner due to higher visitor arrivals, fetching US$ 1.818bn from US$ 1.61bn a year ago, representing a 13% increase. Gold exports declined to $1.747bn in the year to September, from $2.151bn a year ago, due to a decline in both export volumes and prices. Tanzania, which has a population of around 45 million, is Africa’s fourth-largest gold producer after South Africa, Ghana and Mali.

The value of traditional exports declined 8% to $818.2m in the year ending September 2013 from $889.4m previously, due to a decline in both export volumes and prices of sisal, cashew nuts and cloves. The country’s total bill for imports of goods and services rose 2.9% in the 12 months through September to US$ 13.319bn, while the value of its exports of goods and services fell 1.4% to US$ 8.242bn. Gross official foreign exchange reserves held by the central bank rose to US$ 4.59bn in the year to September, or about 4.5 months of import cover, from US$ 4.06bn a year ago, the central bank said.

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