TANZANIA'S current account deficit widened 24 per cent in the year to May due to a surge in oil imports and a decline in current transfers, its central bank said over the weekend.
The deficit widened to $4.939 billion in the 12 months to May from $3.983 billion during the same period last year.
"The out-turn was mainly on account of an increase in imports of goods and services, coupled with a decrease in current transfers," the Bank of Tanzania said in its latest monthly economic report.
Current transfers are mainly composed of aid and loans that Tanzania receives from abroad. "During the year to May 2014, the value of imports of goods and services was $14.05 billion, an increase of 10.7 per cent compared to the amount recorded in the year ending May 2013 ... Much of the increase was registered in oil imports, driven by a surge in volume," the central bank added.
Oil imports rose to $4.319 billion, a 37.8 per cent increase from a year ago, partly due to demand from the energy sector. The value of the country's exports of goods and services went up 4.4 per cent to $8.833 billion, helped by tourism.
Tourism earnings continued to outpace gold exports as the country's top foreign exchange earner due to higher visitor arrivals, fetching $1.956 billion from $1.76 billion a year ago, representing a 10.7 per cent increase.
Gold exports declined to $1.745 billion in the year to May, from $1.975 billion a year ago, due to a decline in both export volumes and prices.
"For the past three years, receipts from the export of gold have declined, while that from travel (tourism) and manufactured exports increased," said the central bank.
Tanzania, which has a population of around 45 million, is Africa's fourthlargest gold producer after South Africa, Ghana and Mali.
The value of traditional exports fell to $843.2 million in the year ending May 2014 from $852.5 million previously, due to a decline in both export volumes and prices of coffee, cotton, tea and cashew nuts.
Gross official foreign exchange reserves held by the central bank rose to $4.48 billion in the year to May, or about 4.4 months of import cover, from $4.28 billion a year ago, the central bank said.