Tanzania’s Current Account Gap Narrows 61.6%

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Tanzania’s current account deficit shrank by 61.6 per cent as at the end of October, 2016 helped by a decline in imports and improved performances by the tourism and mining sectors, the central bank said on Wednesday. The gap narrowed to $1.84 billion in the 12 months to October from $4.79 billion in the same period last year.

In its monthly economic report, the Bank of Tanzania attributed the change to a fall in imports of goods and services to $10.69 billion from $13.23 billion and a 7.5 percent rise in goods and services exports to $9.47 billion.

According to Reuters, the East African country generates most of its foreign earnings from tourism and gold exports, both of which increased in the year to October from the same period a year before. Tourism revenues grew to $2.22 billion from $2.01 billion as more visitors arrived, while gold exports rose to $1.39 billion from $1.18 billion on higher volumes and global prices.

Tanzania is Africa’s fourth-largest gold producer. Export earnings from manufactured goods fell to $1.25 billion in the year to October from $1.31 billion a year before, while the value of traditional exports led by tobacco, cashew nuts and coffee rose to $849.9 million from $837.9 million.

“Gross official foreign exchange reserves held by the central bank in the year to October amounted to $4.05 billion, or about four months of import cover, in line with the government’s target,” the central bank said.