The country’s current account deficit shrunk by nearly half to US$2,497.5 million for the year ending July 2024, down from US$4,460.6 million during the same period in 2023.

This resulted from the improvement of external sector performance, driven by the ongoing recovery in the global economy, specifically increase of exports earnings.

The Bank of Tanzania (BoT) monthly Economic Review for August says the global economic recovery was enhanced by export performance and reduced import values, supported by favourable global commodity prices.

This has also boosted the country’s foreign exchange reserves, which amounted to US$5,292.2 million by the end of July 2024, sufficient to cover 4.3 months of projected imports of goods and services.

The foreign exchange reserves level of reserves remains within the country's benchmark of 4 months and close to the East African Community (EAC) benchmark of 4.5 months

According to BoT, during the year ending July 2024, exports of goods and services reached US$14,673.4 million, up from US$13,037.3 million during the same period in 2023. 

The increase was largely driven by higher service receipts, particularly from tourism, and increased exports of gold, traditional goods such as tobacco, cashew nuts, and horticultural products.

Traditional exports reached US$1,074.4 million, compared to US$782.5 million in the previous year, with notable growth in tobacco and cashew nuts. 

Non-traditional exports amounted to US$6,454.6 million, up from US$6,299.1 million in 2023, largely driven by gold exports, totalling US$3,147.9 million, representing 48.8 percent of total non-traditional exports. 

Additionally, horticultural exports nearly doubled to US$437 million, compared to US$296.5 million in the previous year, driven by increased shipments of vegetables. 

On a monthly basis, exports of goods increased to US$858.3 million in July 2024, compared to USD 760.7 million in July 2023.

The central bank review shows services receipts increased to US$6,706.4 million in the year to July 2024 from US$5,541.5 million in the corresponding period in 2023, with much of it emanating from travel and transport services.

Travel receipts increased by US$531.8 million to US$3,533.9 million. 

The rise in travel receipts arises from the recovery observed in the tourism industry, reflected by the increase of tourist arrivals by 22 percent to 2,026,378. 

Meanwhile, transport earnings, predominantly from freight charges, increased to USD 2,609.8 million compared to US$2,096.9 million in the corresponding period in 2023, supported by increased trade relations with neighbouring landlocked countries. 

Month-on-month, services receipts amounted to US$503.1 million in July 2024, compared to US$594.8 million in the similar period in 2023.

The BoT review shows that imports of goods and services decreased to US$16,098.2 million from USD 16,706 million in the year ending July 2023. 

This decline was primarily influenced by favourable global commodity prices, especially for refined white petroleum products. Notably, imports of refined white petroleum products, constituting 20.5 percent of total goods imports, declined by 3.7 percent to US$2,846.1 million. 

Other significant decreases were observed in the imports of fertilizers, iron and steel, as well as food and beverages for households. 

On a monthly basis, imports of goods amounted to US$1,089.8 million in July 2024, compared to US$1,025.4 million in July 2023. 

Services payments also registered a decline of 9.9 percent to US$2,248.3 million from US$2,495.2 million in a similar period of 2023. 

This reduction in services payments aligns with the overall decrease in import bills. On a monthly basis, services payments were US$181.6 million in July 2024, compared to US$174.6 million in the corresponding period in 2023.