The Revolutionary Government of Zanzibar’s current account deficit improved significantly to a surplus of USD33.3m, compared to a deficit of USD9.1m recorded in the year ending March 2011. This was driven by an increase in cloves export proceeds and tourist receipts, the Bank of Tanzania Monthly Economic Review for the month of April has said.
The review said during the year ending March 2012, current account deficit similarly, the deficit in trade account narrowed to USD62.8m, compared to a deficit of USD86.1m recorded during the corresponding period in 2011, on account of an increase in cloves export proceeds.
According to the review, Zanzibar government expenditure during March 2012, amounted to 33.3bn/-, out of which recurrent expenditure accounted for 62.8 percent and the balance was development expenditure.
In the recurrent expenditure, wages and salaries amounted to 10.8bn/- while expenditure on other charges amounted to 10.1bn/-, above the target by 3.1 percent.
Development expenditure amounted to 12.4bn/- above the target of 6.7bn/-, mainly on account of increased donor fund inflows for development projects, the review noted.
Out of the total development expenditure, foreign funded component accounted for 74.2 percent and the balance was government contribution.
The review also said, for the mainland, during the year ending March 2012, the value of goods and services imports was USD12, 643.2m, being an increase of 35.9 percent when compared to the level recorded in the corresponding period in 2011.
The increase was largely driven by a rise in oil prices in the world market coupled with an increase in domestic demand. Likewise, there was a substantial increase in imports of machinery by 48 percent to USD1, 853.2m, mostly for gas and oil exploration projects under foreign direct investments.
Traditional exports declined by 5.5 percent to USD663.3m mainly due to a decrease in export value of cotton, coffee and cashew nuts following a decline in export volumes.
Likewise, there was a decline in export value of tobacco owing to a decrease in export unit price. It is worth noting that, dismal performance in the traditional exports is partly associated with a price disagreement between cooperatives and buyers (exporters) of cashew nuts, the review said.
On external Sector Performance, the review said during the year ending March 2012, current account deficit widened significantly to USD5, 178.1m compared to a deficit of USD2, 384.5m in the corresponding period in 2011. This development was mainly driven by the rise in imports of goods, particularly oil that outweighed the impact of increase in exports.
The overall balance of payments for the year ending March 2012 has a deficit of USD107.7m compared to a surplus of USD109.3m in the corresponding period last year.