Tanzania’s current account benefits from strong gold prices, tourism boost

DAR ES SALAAM, Capital Markets in Africa: Tanzania’s current account deficit shrank by 55 percent in the year to May, central bank data showed on Tuesday, as the country benefited from a jump in tourist arrivals and rising gold prices, and paid less for oil imports.

Tanzania is Africa’s fourth-largest gold producer and gold and tourism are its main sources of foreign income.

The current account gap narrowed to $1.9 billion in the 12 months to May, from $4.2 billion a year earlier, the central bank said in its latest monthly economic report.

“The improved performance of exports was recorded in travel (tourism) receipts, manufactured goods and gold,” it said.

Earnings from tourism rose 7 percent to $2.3 billion due to more visitor arrivals, the bank said, while revenue from gold rose 4 percent to $1.28 billion, reflecting higher export volumes.

Oil imports fell by 10 percent to $2.84 billion in line with falling import volumes and declining global oil prices.

East Africa’s second-biggest economy is growing by around 7 percent annually, although the International Monetary Fund has urged it to rein in public spending.

Gross official foreign exchange reserves held by the central bank in the year to May amounted to $3.89 billion, or about four months of import cover, the central bank said.

Source: Reuter Africa’s Business News