ZANZIBAR — ZANZIBAR’S current account surplus has registered a significant increase in the last one 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 506.9 million US dollars in the year ending May.
This marks a substantial rise from the 389.1 million US dollars’ surplus recorded during the corresponding period last year.
“The development was largely associated with an increase in service receipts, particularly from tourismrelated activities,” BoT’s latest monthly economic review said.
A current account surplus means that a country has more exports and incoming payments than imports and outgoing payments to other countries.
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 1.020 billion US dollars, following increased tourist arrivals.
Generally, exports of goods and services amounted to 1.084 billion US dollars a year to May, higher than 975.8 million US dollars 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.
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On a monthly basis, exports of goods and services rose to 103.4 million US dollars 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,” BoT said.
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 by the ongoing infrastructure developments.
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
Source: allafrica.com
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