TANZANIA recorded highest foreign reserves at the end of November last year sufficient to cover 6.4 months of projected imports of goods and services it traded on.
According to the Bank of Tanzania (BoT) monthly economic review for December last year, the country’s foreign reserves was 5,533.7 million US dollars (over 12.7tri/-) higher than 5,078.8 million US dollars recorded in the previous year and enough to cover about 5.0 months, against 5,404.0 million US dollars recorded at end of the October, 2019 plenty to cover 6.2 months of projected imports of goods and services in Tanzania.
The import cover has exceeded the country’s benchmark of a minimum of 4.0 months as well as the East African Community (EAC) and Southern African Development Community (SADC) targets of not less than 4.5 months and 6 months, respectively.
During the period under survey, the country’s export earnings improved further to record annual growth of 11.9 percent to 9,534.4 million US dollars on account of an increase in the value of nontraditional goods exports and service receipts.
The value of exports of nontraditional goods grew by 31 per cent to 4,160.0 million US dollars in the year to November 2019 having been driven by factors of gold and manufactured goods.
Gold exports accounted for 51.4 per cent of nontraditional goods exports, increased by 41.9 per cent to 2,139.9 million US dollars on account of both volume and price in the world market.
ccording to the Central Bank report, the increase in volume exported was partly attributed to the government’s actions to effectively manage mining activities in the country.
Some of the mining reforms, which led to the rise on outputs and earnings were cited as amendment of legislations, and establishment of mining trading markets as well as mineral centres.
In addition, the construction of a wall fence around Mirerani and installation of Closed Circuit Television (CCTV) cameras, played an important role in checking smuggling of Tanzanite and enabled the government to collect its fair share of revenues.
The list included manufactured goods’ exports, which improved by 28.4 per cent to record 996 million US dollars in the period under review as a result of good performance in exports of iron and steel products, glass and glassware, processed tobacco, sisal yarn and twine, and fertilisers.
The improvement of export performance contributed to the narrowing of the deficit in the current account to 1,863.6 million from a deficit of USD 1,989.7 million in the year ending November 2018. Much of the deficit in the current account was financed through equity investment and external borrowing.
In a related development, the overall balance of payments recorded a surplus of 702.5 million US dollars in the year ending November 2019, in comparison to a deficit of 753.2 million US dollars recorded in the year ending November 2018.
However, traditional goods’ exports continued to decline after contracting by 21.4 per cent to 740.3 million US dollars in the year ending November 2019, in comparison to 885.5 million US dollars of the corresponding 2018 period.
The value of all traditional goods’ exports declined except coffee, cotton and sisal, which improved due to increase in the volume exported following favourable weather during the crop season.
On the contrary, the value of cashew nuts exports dropped after market prices fluctuated in world and cloves exports reduced owing to lower volume typical of the nature of the crop pegged on a decline in world market price(s).
Price sways of traditional goods exports were broadly in line with developments in the world market prices.
