Tanzania’s external sector showed robust improvement in April 2025, with the current account deficit narrowing by 18.6% to USD 2,224.9 million from USD 2,733.4 million in April 2024, driven by a 7.3% increase in services receipts to USD 6,940.8 million, led by tourism (USD 3,842.6 million, 56.0%) due to 2,162,487 arrivals. Services payments rose 22.8% to USD 2,842.6 million, primarily for transport (USD 1,444.2 million, 53.3%), reflecting higher freight costs. Supported by USD 5.3 billion in reserves, this performance underscores Tanzania’s growing role as a tourism and trade hub. The following table summarizes these key figures.

1. Current Account Performance

The current account balance reflects the net flow of goods, services, primary income (e.g., investment income), and secondary income (e.g., remittances). A narrowing deficit indicates improved external sector performance, driven by export growth outpacing imports.

Key Figures:

• Current Account Deficit (Year ending April 2025): USD -2,224.9 million
• Current Account Deficit (Year ending April 2024): USD -2,733.4 million
• Improvement: Deficit narrowed by USD 508.5 million, or 18.6% year-on-year.
• Reason for Improvement: Higher export earnings outpacing growth in imports.

Analysis:

• Deficit Reduction: The 18.6% improvement in the current account deficit (from USD -2,733.4 million to USD -2,224.9 million) reflects robust export performance, particularly in services, and a relatively moderate increase in imports. TICGL confirm this trend, noting a 31.1% deficit reduction to USD 2,021.5 million in the year ending January 2025, driven by strong export earnings from gold, agriculture, and tourism. The Monthey Economic Review highlights stable foreign exchange reserves of USD 5.3 billion (4.3 months of import cover, previous responses), supporting external balance stability.
• Export-Driven Growth: The narrowing deficit aligns with a 15.1% increase in total exports of goods and services to USD 16,093.1 million in the year ending January 2025, with services exports (e.g., tourism) playing a significant role. Gold exports (USD 3,369.7 million, 36.8% of goods exports) and tourism receipts (USD 3,842.6 million, see below) were key drivers.
• Import Dynamics: Imports of goods and services grew moderately to USD 17,511.8 million in the year ending February 2025 from USD 16,040.6 million in 2024, driven by industrial transport equipment and freight payments, but tempered by lower imports of petroleum, machinery, and wheat. The Monthey Economic Review notes a 3.9% annual TZS depreciation to TZS 2,684.41/USD (previous responses), which may have increased import costs but was offset by export growth.
• Macro Context: The deficit reduction supports Tanzania’s macroeconomic stability, with inflation at 3.2% in February 2025 and GDP growth projected at 6% in 2025. The IMF’s Extended Credit Facility (ECF, USD 1,046.4 million) and foreign exchange interventions (USD 6.25 million sold in April 2025, previous responses) further bolster external balances.

Insights:

• The 18.6% deficit reduction reflects a strong recovery in services exports, particularly tourism, which grew due to a 11.5% increase in tourist arrivals (2,162,487 in April 2025 vs. 1,938,875 in April 2024). This aligns with TICGL reporting 2,106,870 arrivals in the year ending November 2024.
• The moderate import growth (see below) suggests effective management of import bills, particularly for petroleum, amid favorable global commodity prices.
• The deficit, at approximately 2.8% of GDP (based on 2024 GDP of USD 79.2 billion), is sustainable, below the 4.2% projected for 2025, supported by reserves and IMF financing.

2. Exports – Services Receipts by Category

Services receipts are a critical component of Tanzania’s export earnings, driven by tourism and transport, reflecting the country’s role as a regional tourism hub and trade gateway.

Key Figures:

• Total Services Receipts (Year ending April 2025): USD 6,940.8 million
• Total Services Receipts (Year ending April 2024): USD 6,466.0 million
• Growth: +7.3% (USD +474.8 million)
• Breakdown by Category:

Analysis:

• Travel (Tourism, 56.0%, USD 3,842.6 million): Tourism is the largest contributor to services receipts, driven by a 11.5% increase in international arrivals (2,162,487 in April 2025 vs. 1,938,875 in April 2024). TICGL confirm this trend, with arrivals reaching 2,106,870 in the year ending November 2024, boosting travel receipts to USD 3,680 million. The Monthey Economic Review notes tourism’s role as a top foreign exchange earner, supported by Tanzania’s rich wildlife and Vision 2025’s focus on tourism. The sector contributes ~10% to GDP and is projected to reach 19.5% by 2025/26.
• Transport Services (35.2%, USD 2,444.6 million): Receipts from freight and passenger movement grew by 6.5% from ~USD 2,296.0 million in 2024, reflecting Tanzania’s role as a trade hub via Dar es Salaam port, serving six landlocked neighbors. TICGL report transport earnings at USD 2,720 million in November 2024, driven by improved infrastructure (e.g., TAZARA Railway upgrades). The Monthey Economic Review highlights increased trade with neighboring countries (previous responses).
• Other Services (8.8%, USD 653.6 million): This category, including construction, insurance, financial, ICT, government, IP rights, and professional services, grew modestly. Web TICGL note steady growth in ICT and financial services, aligning with the Monthey Economic Review’s emphasis on financial sector digitalization (e.g., mobile money transactions up 26.73%).
• Growth Context: The 7.3% increase in services receipts aligns with a 14% rise in services exports to USD 6,980 million in November 2024, driven by global tourism recovery and regional trade. The African Continental Free Trade Agreement (ratified 2022) and agreements with Angola and the UAE bolster export growth.

Insights:

• Tourism’s 56.0% share underscores its critical role in foreign exchange earnings, supported by a record 2,162,487 arrivals, approaching pre-pandemic levels (1,527,230 in 2019). Investments in tourism infrastructure (e.g., World Bank’s REGROW Project) drive this growth.
• Transport services benefit from Tanzania’s strategic port and railway upgrades (e.g., USD 1.4 billion for TAZARA), enhancing regional trade with landlocked neighbors.
• The modest growth in “Other Services” reflects emerging sectors like ICT, supported by digital payment growth (84% of SMEs adopted digital payments).

3. Imports – Services Payments by Category

Services payments represent expenditures on foreign services, primarily driven by transport costs linked to goods imports, reflecting Tanzania’s import-dependent economy.

Key Figures:

• Total Services Payments (Year ending April 2025): USD 2,842.6 million
• Total Services Payments (Year ending April 2024): USD 2,314.6 million
• Growth: +22.8% (USD +528.0 million)
• Breakdown by Category:

Analysis:

• Transport Services (53.3%, USD 1,444.2 million): The largest category, transport payments grew by 13.2% from ~USD 1,276.2 million in 2024, driven by freight costs linked to goods imports (USD 1,377.9 million in February 2025). TICGL note a 15.8% increase in services payments to USD 2,605.7 million in February 2025, with freight accounting for 53.3%. The Monthey Economic Review attributes this to increased imports of industrial transport equipment (previous responses), reflecting manufacturing and construction activity (GDP contributions of 9% and 16%).
• Travel (19.0%, USD 540.6 million): Payments for Tanzanians traveling abroad for tourism, business, or education grew moderately. TICGL indicate stable travel payments, with services payments rising to USD 2,533.8 million in January 2025, driven by business travel and education abroad. The Monthey Economic Review notes foreign exchange pressures from import payments (previous responses), including travel.
• Other Services (27.7%, USD 857.8 million): This category, including telecom, insurance, royalties, business services, and construction, remained stable (~0% growth). TICGL highlight increased payments for telecom and business services, but overall moderation due to lower global commodity prices. The Monthey Economic Review supports this with stable non-tax revenue (TZS 347.8 billion), indicating controlled service imports.
• Growth Context: The 22.8% increase in services payments outpaced services receipts (7.3%), contributing to the current account deficit. TICGL note a moderate rise in total imports to USD 17,511.8 million in February 2025, driven by industrial supplies but offset by lower petroleum imports.

Insights:

• Transport payments’ dominance (53.3%) reflects Tanzania’s reliance on imported goods, with freight costs tied to Dar es Salaam port’s role as a regional hub. The 13.2% growth aligns with increased construction and manufacturing.
• Stable “Other Services” payments suggest cost management in non-essential services, supported by favorable global prices and BoT’s exchange rate interventions.
• Travel payments (19.0%) indicate growing outbound activity, but their smaller share compared to tourism receipts (USD 3,842.6 million) highlights a net positive services balance.

Conclusion

Tanzania’s external sector performance in April 2025 showed significant improvement, with the current account deficit narrowing by 18.6% to USD 2,224.9 million from USD 2,733.4 million, driven by a 7.3% rise in services receipts to USD 6,940.8 million, led by tourism (USD 3,842.6 million, 56.0%) and transport (USD 2,444.6 million, 35.2%). Services payments grew faster at 22.8% to USD 2,842.6 million, primarily due to transport costs (USD 1,444.2 million, 53.3%), reflecting increased goods imports. The tourism sector, bolstered by 2,162,487 arrivals, and regional trade via improved infrastructure (e.g., TAZARA upgrades) were key drivers, supported by reserves of USD 5.3 billion and IMF financing.

The following table summarizes these key figures.