Tanzania accumulated $5.5 billion worth of gold and dollar reserves by the first half of 2019/2020, covering more than six months of imports.
The country’s benchmark is at least four months’ reserve of imports cover, while for EAC is four and a half months and SADC six months of import cover.
The Bank of Tanzania, in its Monetary Policy Statement Mid-Year Review released last week, attributes the good run to the increase in value of exports specifically from the non-traditional goods counter of minerals and manufactured goods.
“The value of exports of goods and services increased by 25.5 per cent to $5.554 billion from the level registered in the first half of 2018/2019, due to increase in the value of export of non-traditional goods,” said BoT.
By the end of the first half of 2019/2020, data shows the value of non-traditional goods exports increased by 39.3 per cent to $2.363 billion, largely driven by manufactured goods and gold.
Exports of manufactured goods increased by 19.2 per cent to $518.6 million from $435.2 million in the same period in 2018/2019. The increase is attributed to a rise in exports of iron and steel products, glass and glassware, manufactured tobacco, sisal yarn and twine.
As of January 2020, manufactured goods recorded a 24 per cent increase of $984.9 million, driven by sisal yarn and twine, iron and steel products, glass and glassware, manufactured tobacco and fertilisers.
Gold, which accounted for 53.7 per cent of non-traditional goods exports, increased by 59.6 per cent to $1.268 billion from $795.1 million in 2018/2019 on account of both volume and favourable prices at the world market.
“Higher volumes of gold exports correspond with government initiatives to effectively manage mining activities in the country, which curbed smuggling and tax evasion,” said Prof Florens Luoga, BoT governor in the midyear review.
Traditional goods exports also increased to reach $634.4 million compared with $322.1 million in the same period last year, driven by exports of cashewnuts.
Services receipts increased to $2.257 billion, boosted by a good performance in travel and transport receipts.
According to BoT gross domestic product maintained an average growth of 6.9 per cent, same as in 2018, occasioned by scaling up of public investments, steady private sector activity, and stable consumption expenditure.
The main contributors to growth for the first half of 2019/2020 were the construction sector by 28.9 per cent, agriculture by 18 per cent and transport by 9.9 per cent.
With the ongoing public investments in social and physical infrastructure, continued improvement in power supply, expansion of credit to the private sector, and enhanced capacity utilisation in the manufacturing industry real GDP growth is expected to remain robust at the end of the 2019/2020 financial year.