Tanzania’s economy has shown significant growth in the first quarter of 2019, a recent report from Bank of Tanzania (BOT) has said.
According to the report, the real Gross Domestic Product (GDP) is at 6.6, year on year compared to 7.5 in the corresponding quarter in 2018.
The report argues that output growth was attributed by the value added by construction, agriculture, and transport activities, which combined accrue 65.1 percent of the output growth.
However, according to BOT – monthly economic review (August) the external sector performance has also experienced various changes over the course of the financial year.
The current account (which signifies a country’s net foreign assets) saw a widening which attracted a deficit of $2.316 billion, from a deficit of $1.84 billion. Increment fetched from an increase in imports of goods and a decline of official current transfer.
Regardless of the deficit, the report indicates the current account to stay at a favorable stance of around 3.8 percent of the GDP.
Further, in Tanzania – the official foreign exchange remained at $4.719 billion at the end of July 2019, securing Tanzania 5.4 months of imports of goods and services on sufficiency basis.
Thus, BOT report reveals that the import cover was higher than Tanzania’s benchmark reach of 4.0 months. Also, the foreign assets of banks in Tanzania raised significantly to $1.053 billion at the end of July 2019 from $895.2 million in 2018.
The report shows that Tanzania saw a slight decent increase in exports receipts, whereby exports of goods and services saw $8.594 billion increase in the year ending July 2019 from $8.534 billion in financial year ending 2018.
Non-traditional exports accounted for over 80 per cent of all goods exports, increased to $ 3.689 billion from $ 3.1 billion in the corresponding period in 2018. This was largely driven by gold and manufacturing good exports.
Further, the value of gold which accounted for more than 40 percent of the no-traditional exports grew at an annual rate of 23.3 per cent equivalent to $ 1.783 billion, attributed by an increase in export volume.
However, traditional exports came down to $499 million from $1.113 billion in the corresponding period in 2018, whereby all exports of traditional goods fell except cotton and coffee.
On the same note, other exports which include, minerals (excluding gold), oilseeds, cereals, cocoa, hides, and skins, presented an increase in performance as they accrued $ 603.7 million in the year ending July 2019 compared to $471.4 million in the corresponding year in 2018.
The report also highlights the improvement of the respective trend, which will result in the wake of the measure placed to improve the value chain of exports.
Foreign exchange from exports of services accounted for about 46.2 percent of total exports, has increased by $3.987 billion in the year ending July 2018 from $3. 898 in the corresponding period in 2018.
The latter was driven by travel receipts prevailed by tourism, which rose by 3.6 per cent equivalent to $2.4 billion, triggered by the number of tourist’s arrivals in Tanzania.
The show shows also, imports to have increased on goods and services, by $ 10.47 billion from $ 9.89 billion in the year 2018 on accounts of good imported.
However, BOT report shows, the import bills for goods rose by 9.4 percent which is equivalent to $ 8.44 billion, which is hugely influenced by capital goods imports which are aligned with the ongoing enormous public and private investment.
The investment includes infrastructure projects such as bridges, railways, and roads. And yet, Oil imports which accounted for 23.1 percent of all goods imports rose by 8.8 percent, which is equivalent to $ 1.95 billion on account of price increase.
On the other side of the sector, service payments fell by 6.9 percent which is equal to $ 2.02 billion in the year ending July 2019, from the amount recorded in the previous year in 2018, due to travel payments decreasing.
Foreign payments also saw a decent rise of 17 percent in relation to transportation, which is consistent with the increase in the importation of goods.
In regard to the industrialization efforts made by the current Tanzanian government, setting up energy generation structures, promoting investment and infrastructures, it a matter of time for Tanzania to strike even in balance of payments and revitalize its GDP significantly.