Dar es Salaam: Tanzania's current account deficit narrowed 22.6 percent in the year to March helped by a declining import bill and higher gold earnings, the central bank said on Tuesday. The Bank of Tanzania (BOT) said the deficit narrowed to $2.26 billion against $2.92 billion the same period a year earlier.
"On an annual basis, import of goods and services amounted to $7.77 billion compared with $8.12 billion recorded in the corresponding period a year before," it said in a monthly economic review for April.
"The value of goods imports dropped to $6.08 billion compared with $6.46 billion ... largely due to a decline in the value of imported oil, fertilizers and industrial raw materials."
Oil imports fell in value due to the fall in world market prices. Imports of capital goods into east Africa's second largest economy also declined to $2.51 billion during the period, compared with $2.76 billion previously.
BoT said exports of goods and services earned the country $4.84 billion, an increase of 5.5 percent from a year before, boosted by higher gold earnings.
"The improved performance is largely attributed to an increase in the value of minerals, particularly gold that went up by 40.2 percent to $1.21 billion following a rise in export volumes and prices in the world market," said the bank. "The price of gold rose from $867.2 per troy ounce recorded in the previous year to $1,022.8 per troy ounce following the weakening of the U.S. dollar against other major currencies."
Export volumes of gold increased to 37 tonnes from 30.4 tonnes a year before, partly due to Barrick Gold's local subsidiary commencing exports from its Buzwagi mine in June 2009. Tanzania is Africa's third biggest gold producer.
Tourism, Tanzania's biggest foreign exchange earner, rose 0.6 percent to $1.28 billion, as the global economy began to recover from the impact of the financial crisis. Tourism and gold accounted for more than 50 percent of total export revenues, bank data showed.
Earnings from traditional exports -- tobacco, cotton, coffee, cashew nuts and tea -- rose to $475.2 million, an increase of 3.9 percent from a year before due to higher tobacco prices and an increase in coffee output.
It said gross official reserves for the period increased to $3.49 billion -- or 5.4 months of import cover -- from $2.7 billion a year earlier thanks to the improved current account and disbursement of funds from the International Monetary Fund.