March 20, 2017 / 2:25 PM / in 8 months

Gold exports slim Tanzania's current account gap in year to January

DAR ES SALAAM (Reuters) - Tanzania’s current account deficit halved in the year to January, helped by soaring earnings from gold exports and a decline in oil imports, its central bank said on Monday.

The gap narrowed to $1.79 billion in the 12 months to January from $3.8 billion in the same period in 2016, the Bank of Tanzania said in its latest monthly economic report.

Earnings from tourism - the main foreign exchange source - rose to $2.13 billion from $2.02 billion in the previous period, helped by more visitor arrivals.

Gold, the other main foreign exchange earner, fetched $1.5 billion, up from $1.15 billion, reflecting higher export volumes and global prices.

“Gold exports grew by 29.8 percent in value ... due to a recovery in price in the world market and an increase in (output) volume,” the bank said.

Tanzania, which has a population of around 50 million, is Africa’s fourth-largest gold producer after South Africa, Ghana and Mali.

The bank said the overall balance of payments swung into a surplus of $367 million in the year to January from a deficit of $422.4 million in the same period in 2016.

Imports of goods and services fell 15.3 percent to $10.49 billion due to a decline in oil, capital and consumer goods purchases, while total exports rose 5.1 percent to $9.34 billion, the bank said.

Spending on oil, which dominates the goods import bill in east Africa’s second-largest economy, fell by 11.6 percent to $2.47 billion due to a decline in global petroleum prices.

The value of traditional exports rose to $941.9 million, driven by increased output and higher prices of tobacco, cashew nuts and cotton.

Gross official foreign exchange reserves held by the central bank reached $4.33 billion in the year to January, or about four months of import cover.

Reporting by Fumbuka Ng'wanakilala; Editing by Ruth Pitchford; Editing by Aaron Maasho/Ruth Pitchford

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