The Tanzania external sector has continued improving as the intensity of Covid-19 pandemic and restrictions on global economic activities fade. According to the Bank of Tanzania (BoT) monthly economic review for September, the situation has contributed to an increase in the exports of goods coupled with a decrease in imports. The value of exports of goods and services amounted to $9,300.2m in the year ending August compared to $8,972.7m in the corresponding period in 2019, owing to an increase in goods exports. The value of traditional exports almost doubled to $995.6m in the year ending August from $512.5m recorded in the corresponding period last year, explained by increased exports value for cashew nuts, cotton, cloves and sisal. Sisal exports rose on account of increase in both volume and unit prices. Export values for cashew nuts, cotton and cloves rose due to improved export volumes, supported by improved production. By contrast, export values for coffee and tea declined on account of low export volume and unit prices.
The value of non-traditional exports increased to $4,888.5m in the year ending August from $3,836.0m in the corresponding period in 2019, mainly on account of increase in exports value of minerals and manufactured goods. Gold accounted for 55.9 per cent of non-traditional exports and increased by 42.9 per cent to $2,734.6m resulting from increase in volume and unit price. On month-to-month, the export value of gold increased to $276.5m in August from $270.6m in the corresponding month last year, owing to increase in gold prices as a result of continued weakening of financial asset prices attributable to Covid-19 pandemic. During the period under review, the current account deficit narrowed to $772.2m from $1,764.0m recorded in the year ending August last year. As a result, the overall balance of payments deficit remained moderate amounting to $150.0m in the year ending August, compared to a deficit of 117.9m in the year ending August last year. The foreign assets of banks amounted to $1,018.7m at the end of August compared to $1,052.4m at the end of August last year. However, on a monthly basis, the value of exports of goods and services was $689.3m in August 2020 compared with $973.8m recorded in August 2019, owing to decrease in service receipts. On month-to-month, the value of traditional good exports declined to $23.1m from $44.0m, largely explained by low export of cashew nuts. The price movement of traditional exports was broadly in line with developments in the world market prices. Service receipts amounted to $3,101.1m in the year ending August, lower than $4,202.2m recorded in the year ending August last year, owing to decrease in travel receipts.
Travel receipts declined by 35.8 per cent to $1,660.9m due to a decrease in the number of tourist arrivals attributable to the Covid-19 pandemic. Travel receipts during August, dropped to $43.8m from $268.6m in August last year, following the suspension of international flights and lockdowns in major tourist source markets. Nevertheless, travel receipts remained significant accounting for 53.6 per cent of total services receipts for the year ending August.