Tanzania's current account deficit significantly narrowed to US$2,567.2 million in the year ending August 2024, from US$3,846.5 million in the corresponding period in 2023, driven by the improved performance of the external sector.

This progress has been supported by global economic recovery, strong export growth, and a moderated rise in import bills, alongside favorable international commodity prices.

Bank of Tanzania's (BoT) monthly economic review for September shows that exports of goods and services surged to US$ 15,064.6 million in the year ending August 2024, compared to US$ 13,290.1 million during the same period in 2023.

This remarkable growth was largely fueled by higher service receipts, particularly from tourism, as well as increased exports of gold and traditional goods such as tobacco, cashew nuts, and horticultural products.

Traditional exports reached US$ 1,099.9 million in the year ending August 2024, up from US$ 807.9 million the previous year, with much of the increase attributed to tobacco and cashew nut exports due to both volume and price effects.

Non-traditional exports rose slightly to US$ 6,568.3 million from US$ 6,349.8 million in the preceding year. A key driver behind this increase was the rise in gold exports, which surged by 8.2 percent to US$ 3,189.4 million, reflecting both volume and price effects.

Horticultural exports, particularly edible vegetables, experienced robust growth, increasing by 35.3 percent to US$ 454.4 million due to higher shipment volumes.

Service receipts saw a significant surge, climbing to US$ 6,948.5 million in the year ending August 2024, up from US$ 5,711.3 million in 2023.

This growth was largely attributed to strong performances in travel and transport services, with tourism leading the charge.

Tourist arrivals increased by 21.7 percent, reaching 2,051,404, a clear indication of the sector’s recovery. Transport earnings, mainly from freight charges, also grew, amounting to US$ 2,597.6 million compared to US$ 2,184.7 million in the previous year.

On the import side, goods and services imports rose modestly to US$ 16,427.5 million in the year ending August 2024, compared to US$ 16,327.7 million in 2023.

Key drivers of this increase were the imports of refined petroleum products, iron and steel, and electrical machinery.

On a monthly basis, goods imports totaled US$ 1,468.3 million in August 2024, up from US$ 1,163.9 million in the corresponding period in 2023.

The primary income account deficit widened to US$ 1,760.8 million for the year ending August 2024, up from US$ 1,446.4 million in the previous year, primarily due to increased interest payments.

However, on a monthly basis, the primary income account deficit narrowed to US$ 96.2 million in August 2024, compared to US$ 114.9 million in August 2023.

The secondary income account recorded a surplus of US$ 556.5 million for the year ending August 2024, slightly down from US$ 637.6 million in the same period in 2023.

This surplus was bolstered by a rise in personal transfers. On a monthly basis, the secondary income account registered a surplus of US$ 43.5 million in August 2024, comparable to the same period in 2023.

This robust performance of the external sector, particularly driven by export growth and a stable import environment, underscores Tanzania's gradual recovery amid improving global economic conditions.