Tanzania account deficit narrows in 2015 on cheaper oil

Tanzania account deficit narrows in 2015 on cheaper oil

Tanzania’s current account deficit narrowed 38 percent to $3.13 billion last year despite a decline in gold exports, helped by lower global oil prices, the central bank said.

The value of oil imports in East Africa’s second-biggest economy slumped 28 percent to $2.76 billion in 2015 in line with falling import volumes and declining global oil prices.

“The import bill of goods and services amounted to $12.416 billion, a decrease of 8.6 percent from the value recorded in the year ending December 2014,” the Bank of Tanzania said in its latest monthly economic review.

“Most of the decrease was observed in imports of intermediate goods, particularly oil.”

Gold export earnings in Africa’s No. 4 gold producer after South Africa, Ghana and Mali extended their slide, declined to $1.27 billion last year from $1.32 billion in 2013, largely due to a fall in global commodity prices and output, the bank said.

The balance of payments deficit was $258.4 million compared with a deficit of $251.8 million in 2014, the bank added.

Total exports of goods and services rose 8.6 percent to $9.47 billion, helped by the improved performance of tourism and manufacturing sectors.

Earnings from tourism, the country’s biggest source of foreign exchange, rose 11 percent to $2.23 billion in 2015 compared to a year earlier as visitor numbers rose. Tanzania is famed for its pristine beaches and safari parks beneath snow-capped Mount Kilimanjaro.

Export earnings from manufactured goods, the other main source of foreign income, rose to $1.36 billion from $1.23 billion previously, led by sisal products, cotton yarn, plastics and textiles.

Gross official foreign exchange reserves held by the central bank amounted to $4.09 billion in the year to December, or about four months of import cover.

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Story By Reuters
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