Fuel Price Fluctuations Prompt Tanzania to Consider Import System Review for Economic Stability

Tanzania is contemplating a review of its fuel import system in response to the challenge of price fluctuations leading to increased pump prices. In October, fuel prices in Tanzania saw a fourth consecutive monthly rise, with diesel being notably affected.

The fixed prices for petrol in various regions are Tsh3,274 ($1.3) per litre in Dar es Salaam, Tsh3,320 ($1.32) in Tanga, and Tsh3,347 ($1.33) in Mtwara.

Authorities responsible for energy regulation have stated that they are actively monitoring the efficacy of the current bulk oil importation process through tendering. This is aimed at maintaining stability in the monthly capped prices influenced by global fuel markets. The Energy and Water Utilities Regulatory Authority (Ewura) has hinted at the possibility of restructuring the Bulk Procurement System (BPS) used for importing petroleum products if it is found to be inefficient.

James Andilile, the Director General of Ewura, mentioned that an initial assessment of the oil market has been carried out. This is to ensure the involvement of numerous local oil marketing companies in fuel importation and to review the entire price planning system. He stated, "We have made changes in the regulations to encourage more companies to participate in the bidding process. We have also regulated the pricing formula, subject to the regulator’s monthly tariff procedures, to control fuel hoarding."

Recently, Ewura implemented a reduction in fuel prices for November. The capped prices for petrol are Tsh3,274 ($1.3) per litre in Dar es Salaam, Tsh3,320 ($1.32) in Tanga, and Tsh3,347 ($1.33) in Mtwara. Diesel will be sold at Tsh3,374 ($1.3) in Dar es Salaam, Tsh3,510 ($1.4) in Tanga, and Tsh3,546 ($1.41) in Mtwara. Kerosene prices have been set at Tsh3,423 ($1.36) in Dar es Salaam, Tsh3,469 ($1.38) in Tanga, and Tsh3,495 ($1.4) in Mtwara.

The surge in fuel prices in Tanzania during October marked the fourth consecutive monthly increase, with diesel being the most significantly affected.

Tanzania is grappling with fluctuations in fuel prices

Tanzania is grappling with fluctuations in fuel prices, leading to concerns about elevated pump prices. The country is considering a reassessment of its fuel import system to address this issue. In October, fuel prices in Tanzania experienced a fourth consecutive monthly increase, with diesel being particularly impacted.

The government, through the Energy and Water Utilities Regulatory Authority (Ewura), has implemented measures to monitor and regulate the bulk oil importation process. The authorities are focusing on maintaining stability in monthly capped prices, influenced by global fuel markets. The possibility of restructuring the Bulk Procurement System (BPS) is being explored if it is found to be inefficient.

The efforts to encourage more local oil marketing companies to participate in the fuel importation process through changes in regulations. This is part of an overall review of the price planning system to ensure its effectiveness.

Economic implications can be inferred from the fact that fuel prices are a crucial factor in various sectors of the economy. High and fluctuating fuel prices can impact transportation costs, production expenses, and overall consumer prices. The government's intervention to regulate and control fuel prices suggests a recognition of the importance of stability in this sector for broader economic health.

The reduction in fuel prices implemented for November could be seen as a response to address economic concerns and potentially stimulate economic growth. Lower fuel prices can positively influence various economic activities by reducing input costs for businesses and easing the financial burden on consumers. However, the long-term impact on economic growth would depend on various factors, including the overall economic environment, global fuel market trends, and the effectiveness of the regulatory measures implemented by the Tanzanian government.

Fueling Progress: Uganda-Tanzania Gas Pipeline and LNG Projects - Catalysts for Socio-Economic Advancement in East Africa

Uganda and Tanzania have formalized an agreement to initiate a feasibility study for a gas pipeline connecting Tanzania's extensive but isolated deepwater gas fields to Kampala. This development, as communicated by the energy ministers of both nations, is a crucial step toward harnessing Uganda's significant 57.5 trillion cubic feet of natural gas reserves through a proposed $42 billion liquefied natural gas (LNG) project. The country is presently awaiting cabinet approval for this ambitious venture.

In order to expedite the funding for this substantial undertaking, financing institutions are strongly encouraged to offer affordable credit. Uganda's Energy Minister, Ruth Nankabirwa, specifically implores financial entities to play a pivotal role in supporting the project financially.

Meanwhile, Tanzania is navigating its own LNG aspirations, awaiting cabinet approval for a $42 billion LNG initiative aimed at tapping into its substantial natural gas reserves. In May, an agreement was reached between Tanzania's energy ministry and prominent companies such as Equinor, Shell, and Exxon Mobil for the development of an LNG export terminal. This marked a significant breakthrough after years of delays, as reported by Reuters.

Expressing a sense of urgency, Tanzania's Deputy Prime Minister and Energy Minister, Doto Biteko, emphasized the need for prompt action during the signing ceremony in the capital city Dodoma. The timely execution of these projects is paramount, given the current delays.

In a collaborative effort with France's TotalEnergies and China's CNOOC, Uganda and Tanzania are jointly working on a 1,445-kilometer-long pipeline. This infrastructure is designed to facilitate the transportation of crude oil from Uganda's oilfields to global markets through a port on Tanzania's Indian Ocean coast. President Yoweri Museveni of Uganda has conveyed the nation's interest in utilizing the same pipeline corridor to transport affordable natural gas from Tanzania. However, a specific timeline for the construction remains undisclosed, and Minister Nankabirwa stressed the importance of avoiding expensive financing to ensure the affordability of the natural gas.

The gas pipeline and LNG projects extend beyond the energy sector, offering potential benefits to various aspects of the countries' societies and economies.

The collaboration between Uganda and Tanzania on the feasibility study for a gas pipeline and the subsequent development of liquefied natural gas (LNG) projects offers potential social and economic advantages for both nations.

Social Advantages:

Employment Opportunities:

The construction and operation of the gas pipeline and LNG projects can generate significant employment opportunities for the local population, thereby reducing unemployment rates and improving livelihoods.

Infrastructure Development:

The projects will necessitate the development and enhancement of infrastructure, contributing to improved connectivity and accessibility in the region. This development can have positive social impacts on communities along the pipeline route.

Skill Development:

The undertaking of such large-scale projects requires a skilled workforce. This can lead to investments in education and training programs, promoting the development of a skilled labor force that can contribute to various sectors beyond the energy industry.

Community Development:

Revenue generated from the projects can be reinvested in local communities, supporting initiatives in education, healthcare, and other social services. This can contribute to an overall improvement in the quality of life for the local population.

Economic Advantages:

Revenue Generation:

The export of liquefied natural gas and the commercialization of natural gas reserves can become a significant source of revenue for both Uganda and Tanzania. This revenue can be channeled into national development projects and public services.

Foreign Direct Investment (FDI):

The development of such projects often attracts foreign investors, fostering economic collaboration and bringing in additional capital. This can have positive ripple effects on other sectors of the economy.

Diversification of Economy:

The LNG projects diversify the economies of Uganda and Tanzania by tapping into the energy sector. This diversification can enhance economic stability and resilience against fluctuations in other sectors.

Regional Cooperation:

The collaboration between Uganda and Tanzania promotes regional economic cooperation. Shared infrastructure projects can strengthen diplomatic ties and foster a more integrated regional economy, encouraging further collaboration in the future.

Energy Security:

Access to natural gas resources provides both countries with a more reliable and diversified energy source. This contributes to energy security, reducing dependence on a single energy type and potentially stabilizing energy prices.

In 2023, Tanzania has positioned itself among the top ten fastest-growing economies in Africa, boasting a GDP growth rate of 5.2%. According to the Africa Development Bank's report, "From Millions to Billions: Financing the Development of African Cities," Rwanda leads the pack with an impressive 6.2% GDP growth rate, followed closely by Côte d'Ivoire at 6.2% and Benin at 5.5%. Uganda follows suit with a GDP growth rate of 5.4%.

Taking a closer look at these thriving economies:

Rwanda (GDP Growth: 6.2%):

Known as the land of a thousand hills, Rwanda's breathtaking landscape is matched by its remarkable economic growth, making it a prominent force in East Africa.

Côte d'Ivoire (GDP Growth: 6.2%):

Emerging as a West African dynamo, Côte d'Ivoire claims the second spot, contributing significantly to the economic prosperity of the region.

Benin (GDP Growth: 5.5%):

Securing the third position is Benin, a small but powerful player with a GDP growth of 5.5%, proving that economic strength transcends size in the West African arena.

Uganda (GDP Growth: 5.4%):

Part of the vibrant East African community, Uganda maintains momentum with a GDP growth rate of 5.4%, showcasing the region's economic potential.

Tanzania (GDP Growth: 5.2%):

A cornerstone in East Africa, Tanzania secures the fifth spot with a diverse economy contributing significantly to the region's economic prowess.

Kenya (GDP Growth: 5%):

Positioned as a beacon in East Africa, Kenya secures the sixth spot with a GDP growth of 5%, driven by a diversified economy and strategic initiatives.

Togo (GDP Growth: 4.6%):

Nestled in West Africa, Togo displays resilience with a GDP growth of 4.6%, standing tall as a key player in the West African economic landscape.

Senegal (GDP Growth: 4.1%):

With a steady GDP growth of 4.1%, Senegal maintains its position as an economic force in West Africa, characterized by stability and strategic initiatives.

Madagascar (GDP Growth: 4%):

The enchanting island of Madagascar claims the ninth spot with a solid GDP growth of 4%, proving that economic growth knows no boundaries despite unique geography.

Algeria (GDP Growth: 3.8%):

Closing the list is Algeria, providing North African stability with a GDP growth of 3.8%. As one of the continent's largest economies, Algeria's economic stability influences North Africa's economic landscape.

Tanzania's economic growth, with a GDP growth rate of 5.2

Tanzania's economic growth brings about a range of advantages, from regional contributions to improvements in infrastructure and living standards. These factors collectively contribute to the country's development and enhance its position in the global economic landscape.

Regional Economic Contribution:

As a cornerstone in East Africa, Tanzania's robust economic growth contributes significantly to the overall economic prosperity of the region. This can foster regional stability and collaboration in various economic endeavors.

Diverse Economy:

Tanzania's diverse economy plays a crucial role in its growth. The country's ability to leverage various sectors, such as agriculture, mining, and services, provides a stable foundation for sustained economic development and resilience against external shocks.

Job Creation:

Economic growth often correlates with increased employment opportunities. Tanzania's expanding economy is likely generating new jobs, reducing unemployment rates, and improving livelihoods for its citizens.

Infrastructure Development:

Higher GDP growth rates often translate into increased investments in infrastructure. Tanzania may witness improved transportation, energy, and communication infrastructure, fostering better connectivity and efficiency in the movement of goods and services.

Investment Attraction:

Positive economic growth makes Tanzania an attractive destination for foreign and domestic investments. Investors are more likely to consider opportunities in a country with a growing economy, leading to increased capital inflows and business development.

Improved Living Standards:

Economic growth can lead to higher incomes for individuals and households, contributing to an overall improvement in living standards. This includes better access to education, healthcare, and other essential services.

Trade Opportunities:

A thriving economy opens up new trade opportunities. Tanzania may experience increased exports and trade partnerships, enhancing its economic integration with global markets.

Government Revenue:

With a growing economy, the government is likely to experience an increase in tax revenues. This additional income can be used to fund public services, infrastructure projects, and social programs, contributing to the overall development of the country.

The annual headline inflation rate for October 2023 has seen a marginal decline, dropping from 3.3 percent in September 2023 to 3.2 percent. This decrease in headline inflation indicates that the rate of price change for goods and services over the year ending in October 2023 has slightly slowed down compared to the rate recorded for the year ending in September 2023. Furthermore, the overall index has increased from 108.73 in October 2022 to 112.18 in October 2023.

These numbers represent the changes in the Consumer Price Index (CPI) for each of these main groups over time, indicating inflation or deflation in each category. A positive change indicates inflation, while a negative change indicates deflation. The 12-month change shows the inflation rate over the past year for each category.

Food and Non-alcoholic Beverages:

• Inflation in October 2022: 112.55
• Inflation in September 2023: 118.17
• Inflation in October 2023: 117.57
• 1-Month Change: -0.5
• 12-Month Change: 4.5

 Alcoholic Beverages and Tobacco:

• Inflation in October 2022: 103.6
• Inflation in September 2023: 107.3
• Inflation in October 2023: 107.17
• 1-Month Change: -0.1
• 12-Month Change: 3.4

 Clothing and Footwear:

• Inflation in October 2022: 107.47
• Inflation in September 2023: 110.81
• Inflation in October 2023: 110.72
• 1-Month Change: -0.1
• 12-Month Change: 3.0

Housing, Water, Electricity, Gas, and Other Fuels:

• Inflation in October 2022: 108.06
• Inflation in September 2023: 109.41
• Inflation in October 2023: 109.41
• 1-Month Change: 0.0
• 12-Month Change: 1.2

 Household Maintenance:

• Inflation in October 2022: 107.74
• Inflation in September 2023: 111.44
• Inflation in October 2023: 111.44
• 1-Month Change: 0.0
• 12-Month Change: 3.4

 Health:

• Inflation in October 2022: 104.59
• Inflation in September 2023: 106.37
• Inflation in October 2023: 106.35
• 1-Month Change: 0.0
• 12-Month Change: 1.7

 Transport:

• Inflation in October 2022: 110.37
• Inflation in September 2023: 113.42
• Inflation in October 2023: 113.77
• 1-Month Change: 0.3
• 12-Month Change: 3.1

 Information and Communication:

• Inflation in October 2022: 103.26
• Inflation in September 2023: 104.93
• Inflation in October 2023: 104.72
• 1-Month Change: -0.2
• 12-Month Change: 1.4

 Recreation, Sports, and Culture:

• Inflation in October 2022: 104.64
• Inflation in September 2023: 107.45
• Inflation in October 2023: 107.58
• 1-Month Change: 0.1
• 12-Month Change: 2.8

 Education Services:

• Inflation in October 2022: 101.9
• Inflation in September 2023: 105.48
• Inflation in October 2023: 105.48
• 1-Month Change: 0.0
• 12-Month Change: 3.5

 Restaurants and Accommodation Services:

• Inflation in October 2022: 107.85
• Inflation in September 2023: 113.04
• Inflation in October 2023: 113.14
• 1-Month Change: 0.1
• 12-Month Change: 4.9

 Insurance and Financial Services:

• Inflation in October 2022: 100.1
• Inflation in September 2023: 100.65
• Inflation in October 2023: 100.66
• 1-Month Change: 0.0
• 12-Month Change: 0.6

Personal Care, Social Protection, and Miscellaneous Goods and Services:

• Inflation in October 2022: 105.5
• Inflation in September 2023: 109.46
• Inflation in October 2023: 109.27
• 1-Month Change: -0.2
• 12-Month Change: 3.6

The data shows that while there is inflation in many categories, it varies across sectors. This can be a reflection of different factors impacting each sector of the economy. Rising food and transport costs may pose challenges for households, while sectors with stable or declining prices may provide some relief. The government and policymakers need to monitor these trends and implement appropriate measures to manage inflation and promote economic stability and growth in the country.

The inflation rates in Tanzania for different categories can provide some insights into the country's economic performance. Inflation is an important economic indicator, and its behavior in different sectors can offer clues about overall economic health:

Overall Inflation Trend:

The 12-month change in the various categories shows that, on average, there has been inflation in Tanzania over the past year. This indicates a general increase in prices across these categories.

Food Inflation:

Food and non-alcoholic beverages, a significant part of consumer spending, have seen a 12-month change of 4.5%, shows rising food prices. High food inflation can impact the cost of living and potentially lead to challenges for households.

Stable Housing and Household Maintenance Costs:

Housing, water, electricity, gas, household maintenance, and household equipment categories have shown relatively stable inflation rates over the 12-month period, which can indicate some stability in these essential areas of expenditure.

Rising Transport Costs:

Transport has seen a 12-month change of 3.1%, indicating increasing costs in this sector. This can affect both individuals and businesses, as it may result in higher transportation expenses.

Education and Health Costs:

Education services and health have both seen 12-month changes indicating inflation, which might be a concern for individuals and families seeking these essential services.

Variability in Other Categories:

Other categories like clothing and footwear, recreation, and personal care show mixed inflation trends, with some increasing and some decreasing. These fluctuations may reflect changes in consumer preferences and supply and demand dynamics.

Inflation in Alcoholic Beverages and Tobacco:

The category of alcoholic beverages and tobacco has seen a 12-month change of 3.4%. This could be an indicator of increased consumption in these items or possible tax changes affecting their prices.

Positive Trends in Restaurants and Accommodation Services:

The 12-month change in restaurants and accommodation services indicates a 4.9% increase, which may show growth in the hospitality and dining sector.

Stability in Insurance and Financial Services:

The category of insurance and financial services has seen minimal change over the 12-month period, indicating stability in this sector.

Tanzania's exports have been steadily increasing over the past two years, which is a positive sign for its international trade performance. However, imports have also grown, leading to trade deficits in both years, although the trade deficit improved in 2023 compared to 2022.

Export of Goods and Services:

• In 2021, the total export value was 9,446 (in millions of units, typically currency).
• In 2022, it increased to 11,555, showing a 22% growth compared to 2021.
• In 2023, it further increased to 13,415, representing a 16% growth compared to 2022.
• The one-year change from 2022 to 2023 indicates a 16% increase.
• The two-year change from 2021 to 2023 shows a significant 42% increase in exports.

Import of Goods and Services:

• In 2021, the total import value was 10,420.
• In 2022, it increased significantly to 15,633, demonstrating a 50% growth compared to 2021.
• In 2023, it further increased to 16,157, which is a 3% growth compared to 2022.
• The one-year change from 2022 to 2023 indicates a 3% increase.
• The two-year change from 2021 to 2023 reflects a substantial 55% increase in imports.

Balance of Payments:

• In 2021, the balance of payments was -974.5, indicating a trade deficit.
• In 2022, this trade deficit increased significantly to -4,077.7.
• In 2023, the trade deficit decreased to -2,741.9, representing a 33% reduction compared to 2022.
• The one-year change from 2022 to 2023 indicates a 33% improvement in the balance of payments.
• The two-year change from 2021 to 2023 still shows a substantial trade deficit, but it has decreased by 181%.

Tanzania's trade and balance of payments for August 2023 provides insights into the country's economic performance in the context of international trade.

Tanzania’s trade indicates positive growth in exports and a reduction in the trade deficit, which are generally favorable for Tanzania's economic performance. However, the country continues to face challenges related to trade imbalances.

Export Growth:

Tanzania has experienced consistent growth in its exports of goods and services over the past two years. The year-over-year increase from 2022 to 2023 was 16%, and the two-year change from 2021 to 2023 was a substantial 42%. This shows that Tanzanian businesses have been successful in expanding their international markets and increasing their export capacity, which can be seen as a positive indicator of economic performance.

Import Growth:

Imports of goods and services also increased, with a significant 55% growth from 2021 to 2023. While the one-year change from 2022 to 2023 was relatively modest at 3%, the overall trend indicates a growing demand for foreign goods and services in Tanzania. However, such rapid import growth can put pressure on the balance of payments.

Balance of Payments Improvement:

The balance of payments, which measures the difference between exports and imports, saw a notable improvement in 2023. The trade deficit decreased by 33% from 2022 to 2023. While Tanzania still had a trade deficit, the reduction in the deficit is a positive development, indicating that the country's trade balance has improved, which can have favorable implications for its external financial stability.

Challenges Remain:

Despite the improvement in the balance of payments, the data shows that Tanzania still faces a trade deficit, as indicated by the negative balance of payments. A trade deficit means that the value of imports exceeds the value of exports, and this can put pressure on foreign exchange reserves and the overall balance of payments. Addressing this trade deficit remains a challenge.

Net Foreign Assets:

• On 22-Aug, it was 3.8.
• On 23-Sep, it increased to 4.3.
• This represents a 12% increase over one month.
• Over the past year, there was a significant increase of 828%.

Bank of Tanzania:

• On 22-Aug, it was 6.1.
• On 23-Sep, it decreased to 2.9.
• This shows a significant decrease of 110% over one month.
• Over the past year, there was a substantial increase of 993%.

Net Domestic Assets:

• On 22-Aug, it was 22.8.
• On 23-Sep, it decreased to 18.
• This represents a 27% decrease over one month.
• Over the past year, there was a decrease of 161%.

Domestic Claims:

• On 22-Aug, it was 17.5.
• On 23-Sep, it increased slightly to 18.1.
• This shows a 3% increase over one month.
• Over the past year, there was a decrease of 86%.

Securities Held by Banks:

• On 22-Aug, it was 24.8.
• On 23-Sep, it decreased to 21.3.
• This represents a 16% decrease over one month.
• Over the past year, there was a 19% increase.

Claims on the Private Sector:

• On 22-Aug, it was 21.
• On 23-Sep, it decreased to 19.5.
• This represents an 8% decrease over one month.
• Over the past year, there was a 13% decrease.

Extended Broad Money (M3):

• On 22-Aug, it was 17.4.
• On 23-Sep, it decreased to 14.5.
• This shows a 20% decrease over one month.
• Over the past year, there was a 6% increase.

Foreign Currency Deposits:

• On 22-Aug, it was 22.5.
• On 23-Sep, it decreased to 16.2.
• This represents a 39% decrease over one month.
• Over the past year, there was a 32% increase.

Broad Money Supply (M2):

• On 22-Aug, it was 15.9.
• On 23-Sep, it decreased to 14.
• This shows a 14% decrease over one month.
• Over the past year, there was a 3% decrease.

Narrow Money Supply (M1):

• On 22-Aug, it was 15.2.
• On 23-Sep, it decreased to 12.8.
• This shows a 19% decrease over one month.
• Over the past year, there was a 21% increase.

Currency in Circulation:

• On 22-Aug, it was 16.3.
• On 23-Sep, it decreased significantly to 10.7.
• This represents a 52% decrease over one month.
• Over the past year, there was a 66% decrease.

Transferable Deposits:

• On 22-Aug, it was 14.7.
• On 23-Sep, it decreased to 13.8.
• This shows a 7% decrease over one month.
• Over the past year, there was a 51% increase.

Tanzania's money supply and its changes over time can offer insights into the country's economic performance:

Net Foreign Assets:

The significant increase in net foreign assets over the past year (828%) shows a substantial inflow of foreign capital, which could be positive for Tanzania's economy. However, the one-month change indicates a decrease of 12%, which may be a short-term fluctuation.

Bank of Tanzania:

The Bank of Tanzania has seen a remarkable increase in assets over the past year (993%), but it has experienced a significant decrease in assets over one month (110%). This could be due to various factors, such as changes in central bank policies or external financial conditions.

Net Domestic Assets:

A decrease of 27% in net domestic assets over one month may indicate a reduction in domestic economic activity or a change in monetary policy. The significant decrease over the past year (161%) shows a longer-term trend.

Extended Broad Money (M3):

M3, which represents the broadest measure of money supply, has decreased by 20% over one month. This could suggest reduced liquidity in the economy, which might be associated with economic challenges or changes in financial markets.

Narrow Money Supply (M1):

M1 has decreased by 19% over one month, indicating a reduction in the most liquid forms of money. This could be a sign of decreased consumer and business spending.

Currency in Circulation:

The sharp decrease of 52% in currency in circulation over one month could be related to changes in consumer behavior, monetary policies, or banking activities. This decrease could be a cause for concern if it represents a loss of confidence in the local currency.

Foreign Currency Deposits:

The 39% decrease in foreign currency deposits over one month might indicate a change in preferences for foreign currencies or a reduction in foreign exchange reserves.

Other Deposits:

The 8% decrease in other deposits over one month and the 40% decrease over the past year could be due to various factors, including changes in saving habits and financial market conditions.

Tanzania's Current Account, which is a part of the country's balance of payments. The Current Account measures the flow of goods, services, income, and current transfers in and out of a country.

The "Goods Account" and the "Current Account Balance" have seen significant changes, with the former decreasing and the latter also showing a substantial decrease in the 1-month period.

Please note that negative values indicate deficits in these accounts.

Goods Account:

• On 22nd September, it was -738.6 million units of the currency.
• On 23rd August, it was -404.4 million units of the currency.
• On 23rd September, it was -475.3 million units of the currency.
• In the 1-month period from 23rd August to 23rd September, it decreased by 45.25%.
• In the 1-year period from 23rd September (of the previous year) to 23rd September, it increased by 17.53%.

 Services Account:

• On 22nd September, it was 177.17 million units of the currency.
• On 23rd August, it was 356.6 million units of the currency.
• On 23rd September, it was 338.9 million units of the currency.
• In the 1-month period from 23rd August to 23rd September, it increased by 101.28%.
• In the 1-year period from 23rd September (of the previous year) to 23rd September, it decreased by -4.96%.

Goods and Services:

• On 22nd September, it was -561.4 million units of the currency.
• On 23rd August, it was -47.8 million units of the currency.
• On 23rd September, it was -136.5 million units of the currency.
• In the 1-month period from 23rd August to 23rd September, it decreased by 91.49%.
• In the 1-year period from 23rd September (of the previous year) to 23rd September, it increased by 185.56%.

Primary Income Account:

• On 22nd September, it was -81.9 million units of the currency.
• On 23rd August, it was -87 million units of the currency.
• On 23rd September, it was -86.1 million units of the currency.
• In the 1-month period from 23rd August to 23rd September, it increased by 6.23%.
• In the 1-year period from 23rd September (of the previous year) to 23rd September, it decreased by -1.03%.

Secondary Income Account:

• On 22nd September, it was 44.6 million units of the currency.
• On 23rd August, it was 49.6 million units of the currency.
• On 23rd September, it was 50.3 million units of the currency.
• In the 1-month period from 23rd August to 23rd September, it increased by 11.21%.
• In the 1-year period from 23rd September (of the previous year) to 23rd September, it increased by 1.41%.

Current Account Balance:

• On 22nd September, it was -598.7 million units of the currency.
• On 23rd August, it was -85.2 million units of the currency.
• On 23rd September, it was -172.2 million units of the currency.
• In the 1-month period from 23rd August to 23rd September, it decreased by 85.77%.
• In the 1-year period from 23rd September (of the previous year) to 23rd September, it increased by 102.11%.

Tanzania's economy has experienced changes in its trade balance and current account position, particularly over the past month. The country's economic situation can be influenced by both domestic and international factors, and these changes may reflect the impact of global economic trends, commodity prices, and the performance of key sectors like tourism and services:

Goods and Services:

The combined "Goods and Services" account shows a substantial change over the past year, with a significant increase of 185.56%. This shows that Tanzania has experienced a notable change in its trade balance, likely due to shifts in the export and import of goods and services.

Goods Account:

The "Goods Account" has seen a 45.25% decrease in just one month. A decrease in the goods account could indicate a decline in the trade balance, which might be influenced by factors such as changes in commodity prices, export demand, or import levels. The 17.53% increase over the past year may be indicative of longer-term economic trends.

Services Account:

The "Services Account" increased by 101.28% in the span of one month, which is a significant change. This could be related to changes in the tourism industry, which is an important sector for Tanzania. The 1-year decrease of -4.96% may reflect the impact of the global economic environment on the services sector.

Current Account Balance:

The "Current Account Balance" has seen a substantial decrease of 85.77% in just one month, indicating that Tanzania's current account deficit has worsened in a short time frame. However, over the past year, it increased by 102.11%, which shows that the situation may have been better compared to the previous year.

Primary Income Account:

This account shows a small increase of 6.23% in one month but has decreased by -1.03% over the past year. This might reflect changes in income flows, such as remittances or foreign investment returns.

Secondary Income Account:

The "Secondary Income Account" has increased by 11.21% in one month and 1.41% over the past year. This may be related to factors like aid, grants, or other transfers.

External Debt:

• On 21st September, it was 63,705,462.00 million of the currency.
• In August 2023, it increased to 66,783,625.00 million of the currency.
• By September 2023, it decreased to 65,120,471.00 million of the currency.
• In the 1-month period from August to September, it decreased by 2%.
• In the 1-year period from September (of the previous year) to September, it increased by 2%.

Domestic Debt:

• On 21st September, it was 25,542,800.00 million of the currency.
• In August 2023, it increased to 29,226,300.00 million of the currency.
• By September 2023, it further increased to 29,449,500.00 million of the currency.
• In the 1-month period from August to September, it increased by 1%.
• In the 1-year period from September (of the previous year) to September, it increased by 15%.

Total Debts:

• On 21st September, the total debt was 89,248,262.00 million of the currency.
• In August 2023, it increased to 96,009,925.00 million of the currency.
• By September 2023, it decreased to 94,569,971.00 million of the currency.
• In the 1-month period from August to September, the total debt decreased by 1%.
• In the 1-year period from September (of the previous year) to September, the total debt increased by 6%.

The decrease in the total debt in the 1-month period is driven by the reduction in external debt, while domestic debt continues to grow. It's important for Tanzania's government to manage its debt levels carefully to ensure sustainable economic growth and stability:

External Debt:

Tanzania's external debt decreased by 2% in one month but increased by 2% over the past year.

Domestic Debt:

Domestic debt increased by 1% in one month and by a significant 15% over the past year.

Total Debts:

The total national debt decreased by 1% in one month but increased by 6% over the past year.

Tanzania's national debt provides some insights into the country's economic situation:

• External Debt: The 2% decrease in external debt over one month shows that Tanzania has been able to reduce its reliance on external borrowing during that period. However, the 2% increase in external debt over the past year indicates that, despite the recent decrease, Tanzania's external debt has been growing over a longer time frame.
• Domestic Debt: The 1% increase in domestic debt in just one month may reflect increased government borrowing from domestic sources. The significant 15% increase in domestic debt over the past year shows that the government has been actively borrowing from domestic markets to fund its activities.
• Total Debts: The 1% decrease in total national debt in one month is primarily due to the reduction in external debt. However, the total debt has still increased by 6% over the past year, reflecting the country's overall borrowing and debt accumulation.

The management of national debt is a critical aspect of economic policy, and Tanzania's government may have specific reasons for its borrowing and debt management strategies. The sustainability of this debt and its impact on the economy will depend on a variety of factors, including the terms of borrowing, economic growth, and the ability to service the debt without causing fiscal stress.:

• The government's decision to reduce external debt over a one-month period could be a strategy to manage its debt burden and reduce reliance on foreign borrowing.
• The increase in domestic debt may indicate that the government is using domestic sources to finance its budget and development projects.
• The overall increase in the total national debt over the past year shows that the government has been actively borrowing to fund its programs and infrastructure projects.

The government's fiscal performance, including expenditure control and revenue generation, and the resulting budget deficit. The actual performance shows a smaller deficit than initially projected, which may have implications for fiscal stability and government finances.

Government Expenditure:

Wages and Salaries:

• Actual Operations (August 2023): 822.9
• Budgeted/Estimated: 825.9
• Percentage Change Between Actual and Estimated: 0%

Interest Costs:

• Actual Operations (August 2023): 285.1
• Budgeted/Estimated: 236.6
• Percentage Change Between Actual and Estimated: 20%

Development Expenditure:

• Actual Operations (August 2023): 1,357.3
• Budgeted/Estimated: 1,392.9
• Percentage Change Between Actual and Estimated: -3%

Other Recurrent Expenditure:

• Actual Operations (August 2023): 562.4
• Budgeted/Estimated: 768.5
• Percentage Change Between Actual and Estimated: -27%

Total Government Expenditure:

• Actual Operations (August 2023): 3,028
• Budgeted/Estimated: 3,224
• Percentage Change Between Actual and Estimated: -6%

Government Revenues:

Taxes on Imports:

• Actual Operations (August 2023): 824.7
• Budgeted/Estimated: 719.4
• Percentage Change Between Actual and Estimated: 15%

Income Tax:

• Actual Operations (August 2023): 988.9
• Budgeted/Estimated: 950.6
• Percentage Change Between Actual and Estimated: 4%

Tax on Local Goods and Services:

• Actual Operations (August 2023): 315.4
• Budgeted/Estimated: 349.6
• Percentage Change Between Actual and Estimated: -10%

Other Tax:

• Actual Operations (August 2023): 114.5
• Budgeted/Estimated: 126.7
• Percentage Change Between Actual and Estimated: -10%

Non-Tax Revenues:

• Actual Operations (August 2023): 293.2
• Budgeted/Estimated: 338.8
• Percentage Change Between Actual and Estimated: -13%

Total Government Revenues:

• Actual Operations (August 2023): 2,537
• Budgeted/Estimated: 2,485
• Percentage Change Between Actual and Estimated: 2%

Deficit:

• Actual Operations (August 2023): -491
• Budgeted/Estimated: -738.8
• Percentage Change Between Actual and Estimated: -34%

Key takeaways from this data:

• Government expenditure in August 2023 was slightly below the budgeted and estimated figures.
• Interest costs exceeded the budgeted amount, indicating increased borrowing costs.
• Development expenditure was slightly less than budgeted.
• Other recurrent expenditure was significantly lower than the budgeted amount.
• Government revenues exceeded the budgeted and estimated figures.
• The budget deficit in August 2023 was smaller than originally estimated.

Tanzania's government was able to maintain some control over its fiscal situation in August 2023, which is a positive sign for the country's economic stability. Effective expenditure management, revenue collection, and deficit reduction are essential components of sound fiscal policy:

Expenditure Control:

The government managed to control its expenditure in August 2023, with actual spending coming in slightly below the budgeted and estimated figures. This shows prudent financial management.

Interest Costs:

The fact that interest costs exceeded the budgeted amount by 20% indicates that the government may have had to pay more in interest on its debt during the month. This could be a result of higher borrowing costs or increased debt servicing requirements. 

Development Expenditure:

Although development expenditure was slightly less than budgeted, it remains a significant part of the budget. This indicates the government's commitment to investment in infrastructure and development projects.

Other Recurrent Expenditure:

The significant decrease in other recurrent expenditure compared to the budgeted amount (-27%) might reflect cost-cutting measures or adjustments in specific spending areas. 

Government Revenues:

Government revenues exceeded the budgeted and estimated figures, which is a positive sign for the country's fiscal health. This could be due to improved tax collection or other sources of revenue.

 Deficit Reduction:

The budget deficit in August 2023 was substantially smaller (-34%) than the initial estimate, indicating that the government managed its finances more efficiently during the month. A reduced deficit is generally positive for fiscal stability.

Tanzania has emerged as one of the top 10 African nations with the most favorable government fiscal situation when considering the balance between government revenue and government expenditure. According to data from the IMF's Fiscal Monitor Report, Tanzania now ranks ninth among African countries with a government overall balance of -3.3 percent of GDP.

The concept of "overall government balance," as defined by the IMF, pertains to the net lending and borrowing activities of the general government. In the realm of macroeconomics, the total government balance stands as a crucial indicator of a country's fiscal health and the management of its public finances. This term typically encompasses the disparity between government revenue and government expenditure, accounting for all revenue sources and types of spending.

According to the IMF, the overall fiscal balance could signify either net lending and borrowing by the general government or the contrast between total revenue, grants, and total expenditure and net lending in certain instances.

The IMF's Fiscal Monitor Report for October comprehensively outlines the overall balance for each nation, encompassing advanced economies, emerging and developing economies, as well as low-income countries. The fiscal gross and net debt figures presented in the Fiscal Monitor are derived from official data sources and estimations made by IMF staff.

When comparing regions, Sub-Saharan African countries exhibit an average overall balance of -4.0, in contrast to Asia's -3.3 and Latin America's -1.2, particularly among low-income developing countries.

Tanzania would depend on how the government uses its fiscal surplus or reduces its fiscal deficit and how it channels the resources to support economic growth and development.

Other factors like political stability, the business environment, and global economic conditions also play a significant role in determining a country's economic advantages.

Tanzania resulting from its government's favorable overall balance. However, having a positive government overall balance or a less negative one (in Tanzania's case, -3.3 percent of GDP) can potentially lead to several economic advantages for the country:

Fiscal Stability:

Maintaining a lower budget deficit can contribute to fiscal stability. It means the government is not overspending and is managing its finances prudently, which can instill confidence in investors and lenders.

Reduced Debt Burden:

A more favorable government overall balance may help reduce the accumulation of public debt. This can free up resources for other essential public investments and services.

Lower Borrowing Costs:

Countries with better fiscal management often benefit from lower interest rates when borrowing money, reducing the cost of servicing debt.

Attracting Investment:

A stable fiscal environment can make Tanzania more attractive to both domestic and foreign investors, as it suggests a lower risk of sudden tax hikes or financial crises.

Economic Growth:

Effective public financial management can support economic growth by ensuring that government resources are allocated efficiently and effectively, promoting infrastructure development, education, and healthcare, which can have positive impacts on the overall economy.

Confidence in the Economy:

A positive government overall balance can enhance confidence in the Tanzanian economy among both citizens and international partners, leading to increased economic activity and investments.

Below are the ten African countries with the highest overall government balance in Africa.