Tanzania: High Import Bill Widens Zanzibar's Current Account

28 December 2022
Tanzania Daily News (Dar es Salaam)

ZANZIBAR'S current account deficit widened to 329.5 million US dollars during the year ending October compared with 195.4 million US dollars registered in the corresponding period last year largely due to an increase in import bills.

According to the Bank of Tanzania (BoT) monthly economic review for November, the exports of goods and services rose to 186.6 million US dollars from 184.1 million US dollars in the period ending October last year on account of increased service receipts, in particular tourism.

However, goods exports recorded an annual decline of 6.2 per cent, driven by cloves. Cloves exports declined to 41.6 million US dollars from 46.2 million US dollars recorded in the corresponding period last year owing to the cyclical nature of the crop.

Statistics show that Zanzibar produced roughly 3,000 metric tons of cloves in 2020. The production recovered in comparison to the previous year when 1,690 metric tons of spices were yielded.

Once a leading world producer of cloves, the Tanzanian archipelago has struggled to restore the spices industry that has led to severe fluctuations in the production volume.

For instance, in 2017, over 8,000 metric tons of cloves were produced in Zanzibar.

On a month-to-month basis, goods worth 10.7 million US dollars were exported this year compared with 7.6 million US dollars in October last year.

Goods and services worth 519 million US dollars were imported during the year ending October up from 410 million US dollars in the period ending October last year. The main drivers of the increase were intermediate and consumer goods imports.

The intermediate goods import bill rose to 343 million US dollars from 218.5 million US dollars driven by iron and steel, plastic articles, refined white petroleum products and edible oil and wheat.

The rise in imports of consumer goods was largely on account of an increase in another consumer goods category import bill.

Month-to-month imports amounted to 30.5 million US dollars this year compared with 31.4 million US dollars in October last year.

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