(3 Minutes Read)
Zanzibar’s current account surplus has registered a significant increase in the last year thanks to the tourism sector contribution. According to the Bank of Tanzania (BoT), the current account balance witnessed a remarkable improvement, reaching a surplus of USD 506.9 mn in the year ending May.
This marks a substantial rise from the USD 389.1 mn surplus recorded during the corresponding period last year. The development was largely associated with an increase in service receipts, particularly from tourism-related activities, according to BoT’s latest monthly economic review. The tourism sector’s robust performance has been a key driver of Zanzibar’s economic growth, contributing significantly to the balance of payments.
The report said service receipt, particularly tourism rose by 12 per cent to USD 1.020 bn, following increased tourist arrivals. Generally, exports of goods and services amounted to USD 1.084 bn a year to May, higher than USD 975.8 mn in a similar period last year, owing to an increase in service receipts. Conversely, cloves exports declined by 32 per cent to 28.9 million US dollars from the level recorded in the corresponding period last year, due to the cyclical nature of the crop.
Every month, exports of goods and services rose to USD 103.4 mn in May from 67.1 million in May, driven by services, particularly tourism-related activities.On the other hand, imports of goods and services decreased slightly by 0.6 per cent to 591.8 million in the year ending.The decrease is largely explained by the fall in goods imports, particularly intermediate and consumer goods.
The decline in intermediate goods imports was largely due to a decrease in imports of industrial supplies and fuel and lubricants. The decrease in consumer goods imports was mostly on account of the decrease in food and beverages, particularly for household consumption and non-industrial transport equipment. Meanwhile, capital goods imports recorded an increase, largely attributed to the ongoing infrastructure developments.
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Month-to-month imports of goods (FoB) and services amounted to 43.7 million US dollars in May, slightly lower than 49.7 million US dollars registered last May. Experts highlight that the surge in tourist arrivals and increased visitor spending have bolstered service revenues, thereby enhancing the current account surplus. This trend underscores the importance of tourism as a vital component of the nation’s economy. Zanzibar has a unique economic structure shaped by its history, geography, and political status
