Analyzing Trends: Tanzania's Capital Flows from 2012 to 2023

Tanzania has been generally successful in attracting capital and financial investments, as indicated by the surplus in the capital and financial account.

However, the historical volatility underlines the importance of considering external factors and adopting policies to sustain economic stability and attractiveness to investors.

Surplus in Q2 2023:

Tanzania experienced a surplus of 964.10 USD million in its capital and financial account during the second quarter of 2023. This surplus suggests that Tanzania attracted more capital and financial investments than it sent out during this period.

Historical Performance:

• Positive Trend: The historical data reveals a generally positive trend in capital flows, with an average of 677.48 USD million from 2012 until 2023.
• Peak in Q4 2022: The fourth quarter of 2022 saw a peak in capital flows, reaching 2033.68 USD million. This could indicate a particularly robust period for foreign investments or favorable economic conditions.

Volatility:

• Record Low in Q2 2013: The data also highlights a significant dip in the second quarter of 2013 when the capital flows hit a record low of -1327.00 USD million. This suggests a period of economic challenges, possibly marked by capital outflows.

Economic Stability and Attractiveness:

• Surpluses as Positive Signals: The consistent surpluses and positive average over the years, including the high in Q4 2022, may be indicative of economic stability and attractiveness to foreign investors.

Consideration of External Factors:

• External Influences: The fluctuations in capital flows could be influenced by various external factors, such as global economic conditions, changes in international trade dynamics, or shifts in investor sentiment.

Policy Implications:

• Informed Decision-Making: Policymakers can use this information to make informed decisions about economic policies, trade regulations, and investment promotion strategies to maintain or enhance the positive trends.

Tanzania's capital and financial account balances, specifically in the second quarter of 2023. Let's break down the key components and their implications:

Capital and Financial Account Surplus:

• In the second quarter of 2023, Tanzania recorded a surplus of 964.10 USD million in its capital and financial account. This suggests that during this period, Tanzania received more capital inflows and financial investments than it sent out.

Definition of Capital and Financial Accounts:

• Capital Account: This account records transactions involving non-financial assets, such as real estate or international aid. A surplus in the capital account indicates that Tanzania received more non-financial assets than it exported.
• Financial Account: This account tracks transactions involving financial assets, such as stocks, bonds, and foreign exchange. A surplus in the financial account suggests that Tanzania attracted more financial investments than it invested abroad.

Average Capital Flows:

• The average capital flows in Tanzania from 2012 until 2023 were 677.48 USD million. This average gives a sense of the typical magnitude of capital movements over this period.

Historical High and Low:

• Historical High (Q4 2022): The capital flows reached their peak at 2033.68 USD million in the fourth quarter of 2022. This could be due to significant foreign investments, increased exports, or other favorable economic conditions.
• Historical Low (Q2 2013): The capital flows hit a record low of -1327.00 USD million in the second quarter of 2013. A negative value indicates a deficit, suggesting that Tanzania experienced more capital outflows than inflows during that period. This could be attributed to factors like capital flight or economic uncertainties.

Implications:

• Surplus: A surplus in the capital and financial account indicates positive economic conditions, attracting foreign investments and capital.
• Trends: Analyzing the historical data helps identify trends and potential factors influencing capital flows, assisting policymakers and economists in making informed decisions.
• Economic Stability: A consistent surplus or positive trend may indicate economic stability and attractiveness to investors.

Examining the 3.70 Percent Increase in Food Prices Year-on-Year

The research provided indicates the inflation rate of food prices in Tanzania, specifically mentioning the increase of 3.70 percent in November 2023 compared to the same month in the previous year. Additionally, it provides the average food inflation rate for Tanzania from 2010 to 2023, along with the highest and lowest points during this period.

November 2023 Data:

• Food prices in Tanzania increased by 3.70 percent in November 2023 compared to November of the previous year. This indicates a rise in the overall cost of food items during that one-year period.

Average Food Inflation (2010-2023):

• The average food inflation rate for Tanzania from 2010 to 2023 is reported as 8.21 percent. This figure represents the mean percentage increase in the prices of food items over this timeframe.

Highest Food Inflation (January 2012):

• The data mentions an all-time high for food inflation in Tanzania, reaching 27.84 percent in January of 2012. This spike in inflation during that particular month suggests a significant increase in the cost of food at that time.

Record Low Food Inflation (March 2019):

• The record low for food inflation in Tanzania occurred in March 2019, with a figure of 0.10 percent. A low inflation rate implies a minimal increase in food prices during that specific month.

Inflation rates are important economic indicators as they reflect the general trend in the increase or decrease of prices for goods and services over time. High inflation can erode purchasing power, impacting consumers and businesses, while low or negative inflation may raise concerns about economic stagnation.

It's worth noting that various factors can contribute to changes in food prices, including supply and demand dynamics, weather conditions affecting agriculture, transportation costs, and broader economic factors. Monitoring inflation rates helps policymakers and economists assess economic health and make informed decisions regarding monetary and fiscal policies.

The inflationary trends in the cost of food in Tanzania, offering valuable insights into the economic dynamics of the country, potential challenges, and areas that may require attention from policymakers.

The cost of food in Tanzania and its inflation rates conveys several insights about the economic situation in the country:

Current Inflation Trend (November 2023):

• The 3.70 percent increase in food prices in November 2023 compared to the same month in the previous year indicates a moderate level of inflation in the food sector. This suggests that, on average, the cost of food items has risen during this period.

Average Food Inflation (2010-2023):

• The average food inflation rate of 8.21 percent over the period from 2010 to 2023 implies a general upward trend in food prices during this time. This information provides a broader perspective on the overall inflationary pressures in the food sector.

Historical High (January 2012):

• The record high of 27.84 percent in January 2012 indicates a significant spike in food prices during that specific month. This could be attributed to various factors, such as supply disruptions, economic shocks, or other events impacting the cost of food.

Record Low (March 2019):

• The record low food inflation of 0.10 percent in March 2019 suggests a period of minimal increase in food prices during that month. This could be influenced by factors like stable supply chains, favorable weather conditions for agriculture, or government policies.

Economic Implications:

• Inflation rates, especially in the food sector, can have profound implications for consumers, businesses, and policymakers. Higher inflation may reduce the purchasing power of consumers, impacting their ability to afford essential goods. It also affects businesses' costs and planning. Policymakers might respond with measures such as adjusting interest rates or implementing fiscal policies to manage inflation.

Volatility and Stability:

• The variability in the inflation rates over the years (from the high in 2012 to the low in 2019) highlights the volatility that can exist in the food market. Understanding these fluctuations is crucial for businesses and policymakers to make informed decisions and mitigate potential economic challenges.

The overall assessment suggests a positive economic outlook with satisfactory growth, stable inflation, and prudent monetary and fiscal policies contributing to stability in various sectors, although there are challenges such as the depreciation of the exchange rate.

Monetary Policy Stance:

• The MPC has maintained a less accommodative monetary policy to contain inflation below the target of 5 percent. The policy aims to support economic activities and financial sector stability.

Economic Performance:

• The global shocks have had spillover effects, but the economy's performance in 2023 is considered satisfactory.
• Growth in the first and second quarters of 2023 was 5.4 percent and 5.2 percent, respectively.
• Economic activities in Zanzibar showed recovery, with growth reaching 5 percent in the second quarter and an expected annual target of 7.1 percent in 2023.

Inflation:

• Inflationary pressures have remained muted, evolving below the target of 5 percent.
• Inflation declined to 3.2 percent in October and November 2023, primarily driven by moderation in food prices.
• In both Mainland Tanzania and Zanzibar, inflation is expected to remain stable and consistent with the medium-term target of 5 percent.

Monetary Aggregates:

• The growth of monetary aggregates slowed in November 2023 due to a less accommodative monetary policy.
• Extended broad money supply grew at 13.7 percent, and private sector credit growth slowed to 18.3 percent, but it was still above the projection for the end of December 2023.

Fiscal Performance:

• Fiscal performance was satisfactory, with revenue reaching 96 percent of the target in the first four months of 2023/24.
• Expenditure was aligned with available resources.

Current Account and Foreign Reserves:

• The current account improved slightly, with a narrowed deficit in the year ending October 2023.
• Foreign exchange reserves remained adequate at about USD 5 billion in November 2023, covering more than 4 months of imports.

Exchange Rate and Liquidity:

• The exchange rate depreciated by around 7.8 percent year-on-year, reflecting a shortage of foreign currency liquidity.

Financial Sector Stability:

• The financial sector remained stable, with the banking sector adequately capitalized and liquid.
• Asset quality improved, as reflected by a decline in non-performing loans.

Government and IMF Support:

• The MPC applauded the government's policies to address the shortage of foreign currency, increase export, and implement import substitution.
• Satisfactory implementation of policies and achievement of targets outlined in national economic programs, including the IMF-supported Extended Credit Facility, were acknowledged.

Tanzania's economic advantages for growth include a diversified economy, private sector investment, export and tourism growth, fiscal prudence, moderate inflation, a stable financial sector, improvements in the current account, and supportive government policies with international support from organizations like the IMF. These factors collectively contribute to a positive economic environment and the potential for sustained growth.

1. Diversified Economic Activities:

The diversified nature of economic activities has contributed to sustained growth, with different sectors playing a role in supporting overall economic development.

2. Private Sector Investment:

Increased private sector investment has been highlighted as a positive factor in economic growth, with the implementation of growth-enhancing policies fostering a favorable environment for private investment.

3. Export and Tourism Growth:

An improvement in proceeds from exports and tourism has positively impacted economic growth, reducing pressure on foreign currency demand. This suggests that external sectors are contributing to the country's economic expansion.

4. Satisfactory Fiscal Performance:

Satisfactory fiscal performance, with revenue reaching 96 percent of the target and expenditure aligned with available resources, indicates prudent fiscal management, contributing to economic stability.

5. Moderate Inflation:

The effective coordination of monetary, fiscal, and structural policies has resulted in moderate inflation, below the target of 5 percent. This stability in prices provides a conducive environment for economic activities and investments.

6. Stable Financial Sector:

The stable financial sector, with well-capitalized and liquid banks, contributes to economic growth by facilitating access to credit and supporting investment activities.

7. Current Account Improvement:

The slight improvement in the current account, driven by increased foreign exchange earnings from traditional export crops and tourism, contributes to a more balanced external position, enhancing economic resilience.

8. Foreign Exchange Reserves:

Adequate foreign exchange reserves at about USD 5 billion provide a buffer against external shocks, ensuring the stability of the country's currency and supporting international trade.

9. Government Policies and IMF Support:

The effective implementation of government policies, including measures to address the shortage of foreign currency and promote export and import substitution, contributes positively to economic growth.

Acknowledgment of satisfactory implementation of policies and achievement of targets outlined in national economic programs, including support from the IMF, reflects a commitment to economic reforms and stability.

10. Positive Economic Outlook:

The positive outlook for economic growth, with expectations that the performance in 2023 may surpass projections, indicates confidence in the overall economic trajectory.

The survey, conducted over the first quarter of 2023, presents a comprehensive overview of perceptions and experiences regarding the impact of projects across various sectors in Tanzania with 2800 total number of respondents. Notably, 63% of respondents are aware of the increasing number of projects, with 67% expressing a positive impact on the overall economy. However, only 17% have personally experienced positive economic changes, prompting a closer examination of the factors influencing this discrepancy.

The sectors deemed most impactful include Agriculture, Manufacturing, and Commercial Building, with Economic Infrastructure also recognized by a significant portion of respondents. Challenges hindering the positive impact of projects include Economic Policies (23%) and Infrastructure Challenges (23%), emphasizing the need for targeted interventions.

The growth in the mortgage market, challenges such as high-interest rates and a shortage of affordable housing continue to impact its expansion. The market is dynamic, with key players and economic factors influencing its trajectory.

Credit Growth:

• The credit growth to the private sector, including mortgages, is notable, with a 21 percent increase in the year ending August 2023. This growth reflects a high demand for new loans and is consistent with improvements in the business environment and supportive fiscal policies.

Agricultural Sector Credit Growth:

• The agricultural sector has experienced substantial credit growth at 52.4 percent. This growth is attributed to policy measures taken by the Bank of Tanzania (BOT) to promote cost-effective credit intermediation, coupled with ongoing government interventions to support the sector.

Overall Economic Growth:

• The Tanzanian housing sector's growth is linked to the country's strong and sustained economic growth, with GDP growth averaging 6.2 percent over the past decade. This economic growth contributes to increased demand for housing and financial services.

Government Initiatives:

• Government efforts, in partnership with global non-profit institutions and foreign governments, are directed towards meeting the growing demand for affordable housing. This forecasts a collaborative approach between the public and private sectors in addressing housing and financial needs.

Housing Demand as an Economic Indicator:

• The demand for housing, as indicated by the estimated demand of 200,000 houses annually and a total housing shortage of 3 million houses, serves as an economic indicator. The housing sector's performance is influenced by factors such as population growth and government initiatives, reflecting the broader economic landscape.

Constraints on Financial Sector Growth:

• The information highlights high-interest rates and a lack of affordable housing as prime constraints on mortgage market growth. These challenges may also extend to other areas of the financial sector, indicating potential obstacles to overall financial market expansion.

The current state of the mortgage market in Tanzania as of September 30, 2023:

Market Growth:

• The mortgage market in Tanzania experienced a 2 percent growth in the value of residential mortgages compared to a 6 percent growth in the previous quarter (up to June 30, 2023).
• There was a 14 percent year-on-year growth from TZS 522.95 billion in Q3 2022 to TZS 593.76 billion in Q3 2023.

Market Dynamics:

• No new entrants joined the mortgage market during the quarter, and the number of banks offering mortgage portfolios remained at 31.
• The outstanding mortgage debt increased to TZS 593.76 billion, equivalent to US$ 237.53 million, compared to TZS 584.59 billion (US$ 249.92 million) reported in the previous quarter.

Competition and Market Share:

• The mortgage market was competitive, with 31 different banking institutions offering residential mortgages.
• The top five lenders dominated the market, with CRDB Bank Plc leading with a 33.30% market share, followed by KCB Bank, NMB Bank Plc., Azania Bank, and Stanbic Bank.

Debt Size and Ratios:

• The overall average mortgage debt size increased to TZS 103.46 million (US$ 41,388) from TZS 102.13 million (US$ 43,662) in the previous quarter.
• The ratio of outstanding mortgage debt to GDP increased to 0.36 percent compared to 0.33 percent in the previous quarter.

Interest Rates:

• Typical interest rates offered by mortgage lenders ranged between averages of 15 - 19 percent.

Market Drivers:

• The Tanzanian housing sector's growth is attributed to sustained economic growth, a fast-growing population, and government efforts to meet the demand for affordable housing.
• The demand for credit in the private sector, including mortgages, grew by 21 percent in the year ending August 2023.

Constraints:

• High-interest rates and a lack of affordable housing are identified as prime constraints on mortgage market growth.

Housing Demand:

• The demand for housing in Tanzania is estimated at 200,000 houses annually, with a total housing shortage of 3 million houses according to the National Housing Corporation (NHC) report.
• Easy access to mortgages has contributed to the growth in the housing sector, with the number of mortgage lenders increasing from 3 in 2009 to 31 by September 30, 2023, and the average mortgage interest rate falling from 22 percent to 15 percent.

A comprehensive overview of inflation trends in Tanzania, allowing for an analysis of price changes in specific categories and the overall economy. This information is crucial for policymakers, businesses, and individuals to make informed decisions about economic activities and financial planning.

Overall Inflation Trend:

• The overall inflation rate increased from 109.16 in November 2022 to 112.67 in November 2023.
• The 1-month change in the overall inflation rate was 0.4, indicating a slight increase.

Category-Specific Inflation:

1. Food and Non-Alcoholic Beverages:

The category experienced a 1-month increase of 0.4 and a 12-month change of 3.7, indicating a moderate rise in prices over the one-year period.

2. Alcoholic Beverages and Tobacco:

This category showed a 1-month increase of 0.7 and a 12-month change of 4.1, suggesting a notable increase in prices over the year.

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

A significant 1-month change of 1.4 was observed in this category, with a 12-month change of 2.8, indicating notable price increases.

4. Transport:

The 1-month change was stable at 0.0, but the 12-month change was 2.9, suggesting a moderate increase in transportation costs over the year.

5. Restaurants and Accommodation Services:

This category showed a 1-month change of 0.1 and a 12-month change of 4.5, indicating a notable increase in prices for dining and accommodation services.

Stability in Some Categories:

• Categories like Health, Information and Communication, and Education Services showed minimal changes in the 1-month and 12-month periods, suggesting relative stability in these areas.

Diverse Inflation Rates Across Sectors:

• Different sectors experienced varying levels of inflation, indicating that economic factors affecting each category play a role in price fluctuations.

Economic Implications:

• Rising inflation can impact the cost of living, consumer purchasing power, and overall economic stability.
• Sectors with higher inflation rates may face increased costs, potentially affecting businesses and consumers.

Policy Considerations:

• Central banks and policymakers may use this data to assess the effectiveness of monetary and fiscal policies and consider adjustments to maintain price stability.

These figures represent the percentage change in prices for each category, providing insights into the inflation rates in Tanzania for the specified months.

Tanzania across different categories for the months of November 2022, October 2023, and November 2023, along with the 1-month and 12-month changes:

Food and non-alcoholic beverages:

• November 2022: 113.85
• October 2023: 117.57
• November 2023: 118.07
• 1 Month Change: 0.4
• 12 Month Change: 3.7

Alcoholic beverages and tobacco:

• November 2022: 103.63
• October 2023: 107.17
• November 2023: 107.88
• 1 Month Change: 0.7
• 12 Month Change: 4.1

Clothing and footwear:

• November 2022: 107.71
• October 2023: 110.72
• November 2023: 111.23
• 1 Month Change: 0.5
• 12 Month Change: 3.3

Housing, water, electricity, gas, and other fuels Furnishings, household equipment, and routine:

• November 2022: 107.65
• October 2023: 109.19
• November 2023: 110.68
• 1 Month Change: 1.4
• 12 Month Change: 2.8

Household maintenance:

• November 2022: 107.96
• October 2023: 111.41
• November 2023: 111.86
• 1 Month Change: 0.4
• 12 Month Change: 3.6

Health:

• November 2022: 104.94
• October 2023: 106.35
• November 2023: 106.38
• 1 Month Change: 0.0
• 12 Month Change: 1.4

Transport:

• November 2022: 110.48
• October 2023: 113.77
• November 2023: 113.73
• 1 Month Change: 0.0
• 12 Month Change: 2.9

Information and communication:

• November 2022: 103.53
• October 2023: 104.72
• November 2023: 104.85
• 1 Month Change: 0.1
• 12 Month Change: 1.3

Recreation, sports, and culture:

• November 2022: 104.67
• October 2023: 107.58
• November 2023: 108.23
• 1 Month Change: 0.6
• 12 Month Change: 3.4

Education services:

• November 2022: 101.9
• October 2023: 105.48
• November 2023: 105.48
• 1 Month Change: 0.0
• 12 Month Change: 3.5

Restaurants and accommodation services:

• November 2022: 108.39
• October 2023: 113.14
• November 2023: 113.28
• 1 Month Change: 0.1
• 12 Month Change: 4.5

Insurance and financial services:

• November 2022: 100.1
• October 2023: 100.66
• November 2023: 100.74
• 1 Month Change: 0.1
• 12 Month Change: 0.6

Personal care, social protection, and miscellaneous goods and services:

• November 2022: 105.74
• October 2023: 109.27
• November 2023: 109.48
• 1 Month Change: 0.2
• 12 Month Change: 3.5

Tanzania is experiencing challenges in its external trade, with a notable increase in the current account deficit. Policymakers and economists may need to examine these trends to formulate strategies that address the trade imbalances and promote economic stability.

• Tanzania is facing an increased trade deficit, especially in goods, as seen in the Goods Account and the overall Goods and Services balance.
• The Services Account has also contributed to the decline in the overall trade balance.
• While there is stability in the Primary Income Account, there is a slight increase in transfers in the Secondary Income Account.
• The overall Current Account Balance has worsened, with a larger deficit compared to both the previous month and the same period last year.

Tanzania's Current Account and the key insights about the country's economic situation:

Goods Account:

• There has been a decrease in the Goods Account balance from September to October, leading to a higher trade deficit.
• The one-year change shows an increase in the trade deficit compared to the same period last year.

Services Account:

• The Services Account has experienced a significant decrease in one month, indicating a notable change in the balance of trade in services.
• The one-year change is negative, suggesting a decline in the Services Account balance compared to the same period last year.

Goods and Services:

• The combined balance of trade in both goods and services has shown a substantial decrease, indicating an overall decline in the trade balance.

Primary Income Account:

• There is no change in the Primary Income Account from September to October.
• The one-year change is negative, suggesting a slight decrease in income flows compared to the same period last year.

Secondary Income Account:

• The Secondary Income Account has experienced a small increase in one month, indicating a rise in transfers that do not result in goods or services.
• The one-year change is positive but relatively small.

Current Account Balance:

• The overall Current Account Balance has decreased significantly from September to October, pointing to a larger current account deficit.
• The one-year change is positive, indicating a higher deficit compared to the same period last year.

Tanzania's Current Account for different time periods, and it includes components such as the Goods account, Services account, Primary income account, Secondary income account, and the overall Current account balance:

Goods Account:

• 22-Oct: -620.9
• 23-Sep: -477.6
• 23-Oct: -612.5
• 1 Month Change: -23.08%
• 1 Year Change: 28.25%

The Goods Account represents the balance of trade in physical goods. A negative value indicates a trade deficit, meaning that the country is importing more goods than it is exporting.

Services Account:

• 22-Oct: 229.83
• 23-Sep: 381.7
• 23-Oct: 334.9
• 1 Month Change: 66.08%
• 1 Year Change: -12.26%

The Services Account includes the balance of trade in services. It shows the difference between the value of services exported and imported. A positive value shows a surplus in services.

Goods and Services:

• 22-Oct: -391
• 23-Sep: -95.8
• 23-Oct: -277.6
• 1 Month Change: -75.50%
• 1 Year Change: 189.77%

This represents the combined balance of trade in both goods and services.

Primary Income Account:

• 22-Oct: -101.2
• 23-Sep: -101.2
• 23-Oct: -99.8
• 1 Month Change: 0.00%
• 1 Year Change: -1.38%

The Primary Income Account reflects income flows, such as profits and dividends, between residents and non-residents.

Secondary Income Account:

• 22-Oct: 45.3
• 23-Sep: 48.5
• 23-Oct: 48.7
• 1 Month Change: 7.06%
• 1 Year Change: 0.41%

The Secondary Income Account includes transfers that do not result in any goods, services, or financial assets in return.

Current Account Balance:

• 22-Oct: -446.9
• 23-Sep: -148.5
• 23-Oct: -328.6
• 1 Month Change: -66.77%
• 1 Year Change: 121.28%

The Current Account Balance is the sum of all the accounts mentioned above. A negative value indicates a current account deficit, meaning that the country is importing more than it is exporting, and the deficit is funded by capital inflows.

Tanzania has seen positive growth in both exports and imports, with efforts towards reducing the trade deficit. This research shows an overall improvement in the trade balance.

Export Growth:

• Tanzania has experienced a positive trend in the export of goods and services.
• The export values have increased consistently over the three years, with a significant 15% growth from 2022 to 2023 and a substantial 41% growth over the two-year period from 2021 to 2023.
• This growth shows an expansion in the international market for Tanzanian goods and services.

Import Growth:

• Import values have also risen, but at a slightly slower pace compared to exports. There was a modest 1% increase from 2022 to 2023 and a more substantial 50% increase over the two-year period from 2021 to 2023.
• The higher rate of import growth might contribute to concerns about trade imbalances and potential pressure on foreign exchange reserves.

Balance of Payment:

• The Balance of Payment represents the difference between exports and imports. A negative balance indicates a trade deficit.
• Tanzania's trade deficit has narrowed from 2022 to 2023, as evidenced by the 39% reduction in the deficit. However, it's important to note that there is still a deficit, albeit a smaller one.
• The two-year change shows a significant 128% reduction in the trade deficit from 2021 to 2023, indicating improvement in the overall trade balance. This could be attributed to the faster growth rate of exports compared to imports.

The Balance of Payment represents the difference between the value of exports and the value of imports. A negative balance indicates a trade deficit (import > export), while a positive balance indicates a trade surplus (export > import). The percentage changes provide insights into the trends and shifts in the trade balance over the specified periods.

Export of Goods and Services:

• 2021: TZS9,609 million
• 2022: TZS11,730 million
• 2023: TZS13,544 million
  • 1-Year Change (2022 to 2023): +15%
  • 2-Year Change (2021 to 2023): +41%

Import of Goods and Services:

• 2021: TZS10,764 million
• 2022: TZS16,061 million
• 2023: TZS16,173 million
  • 1-Year Change (2022 to 2023): +1%
  • 2-Year Change (2021 to 2023): +50%

Balance of Payment:

• 2021: -TZS1,154.6 million (deficit)
• 2022: -TZS4,331 million (deficit)
• 2023: -TZS2,628.4 million (deficit)
  • 1-Year Change (2022 to 2023): -39%
  • 2-Year Change (2021 to 2023): -128%

This research provides a snapshot of the Tanzania's debt dynamics, allowing policymakers, economists, and analysts to assess the financial health of the nation and make informed decisions about economic policies and future fiscal strategies. It's essential to monitor these trends over time to understand the long-term implications and make adjustments as needed.

The National Debts Development conveys important information about the country's financial situation, particularly in terms of external and domestic debts:

Overall Debt Trends:

• The total national debt increased from TZS 90,957,363.00 in September 2023 to TZS96,688,407.00 in October 2023.
• The 1-month change in total debts is 1%, indicating a moderate increase in the country's overall indebtedness during this period.

External Debt:

• External debt increased from TZS64,357,163.00 in September 2023 to TZS67,238,907.00 in October 2023.
• The 1-month change in external debt is 0%, suggesting a relatively stable external debt level during this period.
• Over the past year, external debt has increased by 5%, indicating a growth in the country's external financial obligations.

Domestic Debt:

• Domestic debt rose from TZS26,600,200.00 in September 2023 to TZS29,449,500.00 in October 2023.
• The 1-month change in domestic debt is 2%, reflecting a moderate increase in domestic financial obligations.
• Over the past year, domestic debt has experienced a more significant growth of 12%.

Comparison Over the Past Year:

• The 1-year change figures provide a perspective on the percentage increase in debts from October 2022 to October 2023.
• The total national debt increased by 7% over the past year, with external debt contributing a 5% increase and domestic debt contributing a higher 12% increase.

Implications:

• The increase in both external and domestic debts may indicate that the country is taking on more financial obligations, which could be for various reasons such as infrastructure development, economic stimulus, or budgetary needs.
• The 1-year change figures highlight the trend of growing indebtedness over a more extended period, which might raise concerns about the country's fiscal sustainability.

Tanzania's external and domestic debts, both in terms of absolute values and their percentage changes over the specified time periods. The percentage change figures indicate the growth or reduction in debt levels compared to the previous month and the same month in the previous year. The "TOTAL DEBTS" section sums up both external and domestic debts to provide a comprehensive overview of the country's overall indebtedness:

Debt Components:

External Debt:

• Sep-23: TZS64,357,163.00
• Oct-23: TZS67,238,907.00
  • 1-Month Change: 0% (Percentage change in external debt from September to October 2023)
  • 1-Year Change: 5% (Percentage change in external debt from October 2022 to October 2023)

Domestic Debt:

• Sep-23: TZS26,600,200.00
• Oct-23: TZS29,449,500.00
  • 1-Month Change: 2% (Percentage change in domestic debt from September to October 2023)
  • 1-Year Change: 12% (Percentage change in domestic debt from October 2022 to October 2023)

Total Debts:

• Sep-23: TZS90,957,363.00 (Sum of External and Domestic Debts in September 2023)
• Oct-23: TZS96,688,407.00 (Sum of External and Domestic Debts in October 2023)
  • 1-Month Change: 1% (Percentage change in total debts from September to October 2023)
  • 1-Year Change: 7% (Percentage change in total debts from October 2022 to October 2023)

The government's financial performance in October 2023, comparing actual operations with the budget estimates for the year:

Government Expenditure:

• There was a significant increase in Development Expenditure, surpassing the budget estimate by 74%. This suggests a higher-than-expected investment in development projects.
• Other Recurrent Expenditure experienced a substantial decrease of 61% compared to the budget estimate, indicating potential cost savings or underspending in certain areas.
• While Interest Costs increased by 43%, the Wages and Salaries category decreased by 12% compared to the budget estimate.

Government Revenues:

• Taxes on Imports and Tax on Local Goods and Services exceeded their budget estimates by 14% and 2%, respectively.
• Income Tax and Other Tax fell short of the budget estimates by 19% and 5%, respectively.
• Non-Tax Revenues experienced a significant decrease of 33% compared to the budget estimate.

Deficit:

• The budget deficit widened substantially, increasing by 84%. This indicates that government expenditures exceeded revenues by a larger margin than initially projected.

Overall Implications:

• The government's increased focus on development projects could stimulate economic growth, but the widening budget deficit raises concerns about fiscal sustainability.
• The substantial decrease in Other Recurrent Expenditure may be intentional cost-cutting measures or a result of underspending, warranting a closer look at the allocation of resources.
• Shortfalls in Income Tax and Other Tax revenues might be attributed to economic factors affecting income and business activities.
• The decrease in Non-Tax Revenues may require attention to alternative revenue sources or a review of existing non-tax revenue-generating mechanisms.

The Government Budget Performance Evaluation for October 2023, comparing actual operations with the budget estimates for the fiscal year 2023. The insight includes details on government expenditure, government revenues, and the resulting budget deficit, along with the percentage change between the actual and estimated figures.

Government Expenditure:

Wages and Salaries:

• Actual (2022): TZS745.6 million
• Budget Estimated (2023): TZS935.9 million
• Actual Operations (2023): TZS825.4 million
• Percentage Change Between Actual and Estimated: -12%

Interest Costs:

• Actual (2022): TZS280.4 million
• Budget Estimated (2023): TZS311.8 million
• Actual Operations (2023): TZS445.1 million
• Percentage Change Between Actual and Estimated: 43%

Development Expenditure:

• Actual (2022): TZS1,105.2 million
• Budget Estimated (2023): TZS1,237.3 million
• Actual Operations (2023): TZS2,158.7 million
• Percentage Change Between Actual and Estimated: 74%

Other Recurrent Expenditure:

• Actual (2022): TZS346.5 million
• Budget Estimated (2023): TZS758 million
• Actual Operations (2023): TZS294.4 million
• Percentage Change Between Actual and Estimated: -61%

Total Government Expenditure:

• Actual (2022): TZS2,478 million
• Budget Estimated (2023): TZS3,243 million
• Actual Operations (2023): TZS3,724 million
• Percentage Change Between Actual and Estimated: 15%

Government Revenues:

Taxes on Imports:

• Actual (2022): TZS738.2 million
• Budget Estimated (2023): TZS774.6 million
• Actual Operations (2023): TZS884.7 million
• Percentage Change Between Actual and Estimated: 14%

Income Tax:

• Actual (2022): TZS453 million
• Budget Estimated (2023): TZS626.1 million
• Actual Operations (2023): TZS510 million
• Percentage Change Between Actual and Estimated: -19%

Tax on Local Goods and Services:

• Actual (2022): TZS288.1 million
• Budget Estimated (2023): TZS472.4 million
• Actual Operations (2023): TZS460.8 million
• Percentage Change Between Actual and Estimated: -2%

Other Tax:

• Actual (2022): TZS144.5 million
• Budget Estimated (2023): TZS134.7 million
• Actual Operations (2023): TZS128.4 million
• Percentage Change Between Actual and Estimated: -5%

Non-Tax Revenues:

• Actual (2022): TZS337.5 million
• Budget Estimated (2023): TZS454.9 million
• Actual Operations (2023): TZS304.4 million
• Percentage Change Between Actual and Estimated: -33%

Total Government Revenues:

• Actual (2022): TZS1,961 million
• Budget Estimated (2023): TZS2,463 million
• Actual Operations (2023): TZS2,288 million
• Percentage Change Between Actual and Estimated: -7%

Deficit:

• Actual (2022): -TZS516.4 million (deficit)
• Budget Estimated (2023): -TZS780.3 million (deficit)
• Actual Operations (2023): -TZS1,435.3 million (deficit)
• Percentage Change Between Actual and Estimated: 84%