Tourism, cheaper oil cut Tanzanian current account gap in year to February

DAR ES SALAAM (Reuters) – Tanzania’s current account deficit shrank by 11.4 percent in the year to February, helped by lower oil prices and an improved performance by the tourism and manufacturing sectors, its central bank said on Friday.

The deficit narrowed to $4.563 billion in the 12 months to February from $5.152 billion during the same period last year.

“Despite the improvement in the current account, the overall balance of payments deteriorated to a deficit of $216.3 million … compared with a surplus of $680.8 million recorded in the preceding year,” the Bank of Tanzania said in its latest monthly economic report.

The central bank attributed the balance of payments deficit to lower disbursements of aid and loans to one of Africa’s biggest per capita aid recipients.

A group of donors last year withheld the release of close to $500 million of financial aid to Tanzania due to concerns over corruption allegations in the energy sector.

Tourism earnings continued to outpace gold exports as the country’s top foreign exchange earner due to higher visitor arrivals, rising 8.4 percent to $2.07 billion.

Gold exports fell to $1.319 billion in the year to February, from $1.59 billion a year ago, due to a decline in both export volumes and prices. Tanzania, which has a population of over 45 million, is Africa’s fourth-largest gold producer after South Africa, Ghana and Mali.

The country’s total bill for imports of goods and services fell 1.3 percent in the 12 months through February to $13.56 billion, while the value of its exports of goods and services rose 7.7 percent to $9.15 billion.

The value of oil imports fell sharply from $4.32 billion to $3.45 billion because of lower world prices and a decline in import volumes, the central bank said.

Its gross official foreign exchange reserves fell to $4.22 billion in the year to February, or about four months of import cover, from $4.52 billion a year ago.