1. Overview of Trade Performance

• Tanzania’s external sector is a critical driver of economic growth, with exports contributing to foreign exchange earnings and imports supporting infrastructure and industrial development. The trade balance reflects a persistent deficit due to higher import demand, though export growth, particularly in minerals and tourism, has narrowed the gap. The current account deficit improved by 26% to TZS 5.71 trillion (USD 2,117.5 million) in the year ending May 2025, driven by strong export performance.
• Total Trade (Year Ending May 2025):
  • Exports of Goods and Services: TZS 45.83 trillion (USD 16,994.7 million), up 19.2% from USD 14,258.2 million in May 2024.
  • Imports of Goods and Services: TZS 47.72 trillion (USD 17,686 million), up 9.6% from USD 16,141.9 million in May 2024.
  • Trade Deficit: TZS 1.89 trillion (USD 701.3 million), narrowed from USD 1,009 million in Q3 2024, reflecting export-driven improvements.
• Economic Drivers: Export growth is fueled by gold, agriculture, and tourism, supported by the Third Five-Year Development Plan (FYDP III, 2021/22–2025/26) and AfCFTA participation. Imports are driven by capital-intensive projects (e.g., Standard Gauge Railway, Julius Nyerere Hydropower Plant) and consumer demand. The Tanzanian shilling’s 3.82% depreciation (TZS 2,698.42/USD) boosts export competitiveness but raises import costs.

2. Exports of Goods and Services

• Overview: Tanzania’s exports include goods (minerals, agricultural products, manufactured goods) and services (tourism, transport). Gold and tourism dominate, accounting for 36.8% and 23.2% of total exports, respectively, in 2024. Agricultural exports benefit from global demand, while services leverage Tanzania’s natural attractions and logistics improvements.
• Export Composition (Year Ending May 2025):
  • Goods Exports: TZS 26.67 trillion (USD 9,894.9 million), up from USD 7,758.7 million (+27.5%) in May 2024.
    • Gold: TZS 10.34 trillion (USD 3,835.5 million), 36.8% of goods exports, up 23.1% due to high global prices (USD 3,326/oz) and production increases (1.9 million oz, web:18). Beneficiation policies (e.g., local refining) and BoT gold purchases (976.51 kg) enhance earnings.
    • Cashew Nuts: TZS 1.05 trillion (USD 389.9 million, estimated based on 141% growth), driven by global demand and competitive pricing.
    • Coffee: TZS 0.80 trillion (USD 296.8 million, estimated based on 66.3% growth, supported by improved trade policies.
    • Tobacco: TZS 0.86 trillion (USD 318.8 million, 4.7% of goods exports, web:22), up 32% due to higher productivity.
    • Cloves (Mainly Zanzibar): TZS 0.15 trillion (USD 55.5 million, provided data), down 10.2% due to production and price declines.
    • Horticulture (Vegetables, Fruits, Seeds): TZS 0.84 trillion (USD 312 million, 4.3%), supported by the Horticulture Exports Accelerator Program.
    • Other (Gemstones, Textiles, Fish): TZS 2.63 trillion (USD 976.3 million, estimated), with fish and marine products up 4.3% (USD 4.1 million, provided data) and textiles benefiting from cotton exports to South Asia.
  • Services Exports: TZS 19.16 trillion (USD 7,099.8 million), up 9.2% from USD 6,499.4 million.
    • Travel (Tourism): TZS 10.55 trillion (USD 3,910 million, estimated, 55.1% of services), up 10% due to 2,170,360 tourist arrivals (+10.6% from 1,961,870, provided data). Key attractions include Mount Kilimanjaro, Serengeti, and Zanzibar beaches.
    • Transport Services: TZS 3.83 trillion (USD 1,420 million, ~20%, provided data), up due to improved port and railway infrastructure (e.g., Dar es Salaam port, SGR.
    • Other Services (Construction, Insurance, ICT, Royalties): TZS 4.78 trillion (USD 1,769.8 million, ~25%, provided data), driven by ICT (453.7 million TIPS transactions, web:6) and construction projects.
• Key Destinations:
  • India: 21.4% (~TZS 9.81 trillion), mainly gold and cashew nuts.
  • South Africa: 15.4% (~TZS 7.06 trillion), gold and agricultural products.
  • UAE: 9.4% (~TZS 4.31 trillion), minerals and textiles.
  • Switzerland: 6.4% (~TZS 2.93 trillion), gold.
  • China: 5.9% (~TZS 2.70 trillion), agricultural and manufactured goods.
  • DR Congo: 4.3% (~TZS 1.97 trillion), agricultural products.
• Trends and Drivers:
  • Gold Dominance: Gold’s 36.8% share reflects high global prices and mining reforms. The Epanko Graphite Project signals mineral diversification.
  • Tourism Growth: Tourism receipts (TZS 10.55 trillion) are driven by 2,662,219 arrivals in 2024 (+20%, web:6) and infrastructure (e.g., Mikumi SGR gate). The sector contributes 19.5% to GDP in 2025/26.
  • Agricultural Surge: Cashew nuts (+141%), coffee (+66.3%), and tobacco (+32%) benefit from AfCFTA and trade missions (web:15). Zanzibar’s clove exports (TZS 0.15 trillion) face challenges from market downturns.
  • Services Expansion: Transport earnings (TZS 3.83 trillion) reflect regional logistics improvements (24% intra-African trade rise to USD 5.18 billion, web:6), while ICT and construction grow with infrastructure investments.
• Implications:
  • Strengths: Export growth (19.2%) narrows the current account deficit (TZS 5.71 trillion), supported by reserves (TZS 13.86 trillion, USD 5,136.6 million). Tourism and gold ensure robust foreign exchange inflows.
  • Challenges: Overreliance on gold (36.8%) and tourism (23.2%) risks exposure to global price and demand fluctuations (web:17). Clove exports’ decline (TZS 0.15 trillion, -10.2%) highlights agricultural vulnerabilities.
  • Outlook: Continued export growth (projected +15% in 2025, web:18) depends on diversification (e.g., horticulture) and infrastructure (e.g., SGR). AfCFTA and trade agreements (e.g., Tanzania-UAE, web:24) will boost market access.

3. Imports of Goods and Services

• Overview: Tanzania’s imports support its capital-intensive growth model, with capital goods and industrial inputs dominating. The 9.6% import growth reflects infrastructure demand and consumer needs, particularly in tourism and manufacturing.
• Import Composition (Year Ending May 2025):
  • Goods Imports: TZS 26.67 trillion (USD 9,894.8 million, estimated based on national import share), up from USD 9,693.4 million in May 2024.
    • Petroleum Oils: TZS 6.95 trillion (USD 2,578.5 million, 19.9% of goods imports, web:22), down 7% due to global price effects and domestic energy investments (e.g., Julius Nyerere Hydropower Plant).
    • Machinery and Mechanical Appliances: TZS 4.94 trillion (USD 1,830 million, 12.1%), for infrastructure (e.g., SGR, hydropower).
    • Vehicles and Transport Equipment: TZS 4.34 trillion (USD 1,610 million, 10.7%), supporting logistics and construction.
    • Electrical Machinery and Equipment: TZS 2.58 trillion (USD 955 million, 6.32%), for industrial and ICT applications.
    • Wheat and Meslin: TZS 0.84 trillion (USD 310 million, 3.1%), reflecting food import needs.
    • Other (Chemicals, Plastics, Consumer Goods): TZS 6.96 trillion (USD 2,581.3 million, estimated), including fertilizers and manufactured articles.
  • Services Imports: TZS 7.67 trillion (USD 2,841.7 million), up 27.0% from USD 2,324.9 million.
    • Freight (Transport): TZS 3.66 trillion (USD 1,356.5 million, 47.7%, provided data), driven by import volumes of capital goods and fuel.
    • Other Services (Construction, Insurance, ICT, Financial): TZS 4.01 trillion (USD 1,485.2 million, ~52.3%, provided data), linked to infrastructure projects and financial services.
• Key Origins:
  • China: 27.5% (~TZS 13.12 trillion), machinery and electronics.
  • India: 12.9% (~TZS 6.16 trillion), petroleum and chemicals.
  • UAE: 9.4% (~TZS 4.49 trillion), refined petroleum.
  • Saudi Arabia: 6.1% (~TZS 2.91 trillion), petroleum products.
  • Japan: 4.3% (~TZS 2.05 trillion), vehicles and machinery.
• Trends and Drivers:
  • Capital-Intensive Growth: Imports of machinery (TZS 4.94 trillion) and vehicles (TZS 4.34 trillion) support infrastructure projects (e.g., SGR, TZS 7.72 trillion budget allocation) and manufacturing (9% GDP).
  • Petroleum Decline: Petroleum imports (TZS 6.95 trillion, -7%) reflect hydropower advancements (235 MW from Julius Nyerere dam, web:17) and plans for LNG and oil pipelines by 2026.
  • Freight Costs: The 27.0% rise in services imports (TZS 7.67 trillion) is driven by freight (47.7%), linked to port congestion and global shipping costs. The Tanzania Shipping Agency Corporation’s monopoly may elevate costs.
  • Food Imports: Wheat imports (TZS 0.84 trillion) highlight food security gaps, despite domestic production increases (557,228 tonnes maize).
• Implications:
  • Economic Support: Imports fuel 6% GDP growth, with capital goods (TZS 4.94 trillion) and vehicles (TZS 4.34 trillion) enabling infrastructure and trade (24% intra-African trade rise).
  • Trade Deficit: The TZS 1.89 trillion deficit reflects import reliance, exacerbated by TZS depreciation (3.82%), increasing costs by ~TZS 0.73 trillion for USD-denominated imports.
  • Outlook: Reducing petroleum imports (via LNG, hydropower) and boosting local manufacturing can narrow the deficit. AfCFTA’s tariff reductions (90% of products) will lower import costs but require infrastructure upgrades.

4. Policy Recommendations

To enhance Tanzania’s trade performance, the following actions are recommended based on the analysis:

1. Diversify Exports:
   • Action: Invest in horticulture (TZS 0.84 trillion exports) and manufacturing (e.g., textiles, TZS 0.10 trillion, web:17) via the Horticulture Exports Accelerator Program and SEZ incentives. Support clove production in Zanzibar (TZS 0.15 trillion, -10.2%) with irrigation and market access.
   • Impact: Reduces reliance on gold (TZS 10.34 trillion, 36.8%) and tourism (TZS 10.55 trillion, 23.2%), mitigating global price risks.
   • Example: The AfCFTA Guided Trade Initiative can boost agricultural exports to DR Congo (TZS 1.97 trillion).
2. Reduce Import Dependence:
   • Action: Accelerate domestic energy production (e.g., LNG, Julius Nyerere dam) to cut petroleum imports (TZS 6.95 trillion, 19.9%). Promote import substitution in manufacturing (e.g., wheat processing, TZS 0.84 trillion, web:22) via MKUMBI II reforms.
   • Impact: Narrows the trade deficit (TZS 1.89 trillion) and mitigates TZS depreciation effects.
   • Example: The 2025/26 budget’s VAT exemptions for farmers can boost local food production.
3. Enhance Logistics Infrastructure:
   • Action: Upgrade Dar es Salaam port and railways (e.g., SGR, Mikumi gate, web:6) to reduce freight costs (TZS 3.66 trillion, 47.7% of services imports). Address port congestion via private investment.
   • Impact: Lowers import costs and boosts transport earnings (TZS 3.83 trillion, web:6). Supports intra-African trade (TZS 13.98 trillion).
   • Example: The Tanzania Shippers Council’s collaboration to reduce logistics costs aligns with AfCFTA goals.
4. Strengthen Tourism and Services:
   • Action: Expand tourism marketing to Asia and Americas (71.6% of Zanzibar arrivals from Europe) and invest in ICT (TZS 4.78 trillion in other services). The 2025/26 tourism budget (TZS 0.36 trillion) can fund new attractions.
   • Impact: Sustains tourism receipts (TZS 10.55 trillion) and diversifies services exports.
   • Example: World Travel Awards 2025 recognition can attract more visitors.
5. Improve Trade Facilitation:
   • Action: Streamline TANCIS documentation and reduce non-tariff barriers (e.g., port delays). Leverage AfCFTA to eliminate tariffs on 90% of products.
   • Impact: Enhances export competitiveness and reduces import costs, supporting the trade balance.
   • Example: The Dar es Salaam International Trade Fair (June–July 2025) can promote local products.

5. Economic Implications

• Export Strengths: Gold (TZS 10.34 trillion) and tourism (TZS 10.55 trillion) drive foreign exchange inflows, supporting reserves (TZS 13.86 trillion) and GDP growth (6%). Agricultural exports (TZS 3.60 trillion combined for cashew, coffee, tobacco, horticulture) leverage AfCFTA markets.
• Import Challenges: High capital goods (TZS 4.94 trillion) and freight costs (TZS 3.66 trillion) widen the trade deficit (TZS 1.89 trillion), with TZS depreciation (3.82%) adding ~TZS 0.73 trillion to USD-denominated costs.
• Sustainability: The current account deficit (TZS 5.71 trillion) is manageable with reserves covering 4.2 months. However, import reliance risks external vulnerabilities, requiring diversification and domestic production.
• Outlook: Exports are projected to grow 15% in 2025 (web:18), driven by minerals, agriculture, and tourism. Reducing petroleum imports (via LNG, web:17) and enhancing logistics can further narrow the deficit, supporting Vision 2050’s USD 1 trillion GDP goal.

Tanzania Exports and Imports - May 2025: Key Figures

Note: USD conversion based on TZS 2,698.42/USD (May 2025).

In 2024, Tanzania’s trade profile reflects its position as a developing economy reliant on primary commodity exports and significant imports of energy and capital goods. With total exports valued at $7.06 billion and imports at $12.05 billion, the country recorded a trade deficit of $4.99 billion. Exports are dominated by precious stones (52.4%), particularly gold and tanzanite, alongside agricultural products like fruits, tobacco, and coffee, which collectively contribute ~27% of export value. Imports are led by mineral fuels (25.9%), machinery (14.1%), and vehicles (14.5%), highlighting Tanzania’s dependence on foreign energy and industrial inputs. This trade imbalance significantly impacts the balance of payments, with an estimated current account deficit of $2.49 billion, partially offset by tourism and remittances, and financed by foreign direct investment (FDI) and loans. This analysis examines the key figures, their implications, and strategies to strengthen Tanzania’s trade and BoP position.

1. Export Figures and Composition

• Total Export Value: $7,063,098,000.
• Total Export Weight: 8,702,027,904 kg.
• Top Export Categories:
  • Natural/Cultured Pearls, Precious Stones, Metals, Coins, etc.: $3,702,006,668 (52.4% of total export value, 25,475,294 kg, 0.3% of weight).
    • Key Products: Gold and tanzanite, critical for foreign exchange earnings. Their high value-to-weight ratio underscores Tanzania’s mining sector strength.
    • Implication: This category’s dominance makes exports vulnerable to global price volatility, risking BoP instability if prices fall.
  • Edible Fruits and Nuts: $618,872,845 (8.8%, 486,249,663 kg, 5.6%).
    • Key Products: Cashew nuts, avocados, mangoes.
    • Implication: Significant for rural economies, but raw exports limit value addition.
  • Tobacco and Manufactured Tobacco Substitutes: $545,622,444 (7.7%, 114,290,786 kg, 1.3%).
    • Key Products: Processed tobacco for global markets.
    • Implication: A stable earner, but diversification into other processed goods could enhance value.
  • Edible Vegetables and Certain Roots and Tubers: $392,039,771 (5.5%, 655,797,745 kg, 7.5%).
    • Key Products: Cassava, potatoes, beans.
    • Implication: High volume reflects regional trade strength, but low value per kg suggests bulk, unprocessed exports.
  • Coffee, Tea, Mate, and Spices: $351,574,312 (5.0%, 108,360,278 kg, 1.2%).
    • Key Products: Coffee, cloves (from Zanzibar).
    • Implication: Traditional exports with potential for higher earnings through processing (e.g., roasted coffee).
• Insight: Exports are heavily concentrated in primary commodities (~80% of value from precious stones and agriculture), with precious stones alone contributing over half the revenue. This lack of diversification limits resilience, as a drop in gold or tanzanite prices could reduce export earnings by ~$1.8–2 billion (assuming a 50% price decline).

2. Import Figures and Composition

• Total Import Value: $12,051,010,000.
• Total Import Weight: 15,684,509,316 kg.
• Top Import Categories:
  • Mineral Fuels, Oils, and Products of Their Distillation: $3,116,521,534 (25.9%, 4,850,718,867 kg, 30.9%).
    • Key Products: Petroleum products, diesel.
    • Implication: Energy dependency drains foreign exchange, with ~$3.1 billion spent annually, a major BoP pressure point.
  • Vehicles (Non-Railway): $1,749,632,899 (14.5%, 487,514,203 kg, 3.1%).
    • Key Products: Cars, trucks, motorcycles.
    • Implication: Supports transport infrastructure but contributes significantly to the trade deficit.
  • Nuclear Reactors, Boilers, Machinery, and Mechanical Appliances: $1,694,274,504 (14.1%, 319,673,868 kg, 2.0%).
    • Key Products: Industrial machinery for manufacturing, construction.
    • Implication: Essential for industrialization but increases import costs in the short term.
  • Electrical Machinery and Equipment: $1,022,094,834 (8.5%, 199,416,625 kg, 1.3%).
    • Key Products: Electronics, telecom equipment.
    • Implication: Supports technology and infrastructure development, adding to the deficit.
  • Plastics and Articles Thereof: $874,886,359 (7.3%, 718,520,526 kg, 4.6%).
    • Key Products: Packaging, consumer goods.
    • Implication: Reflects growing consumer and industrial demand, contributing to import costs.
• Insight: Imports are diverse, with energy (25.9%) and capital goods (machinery, vehicles, ~28.6% combined) dominating. Food imports like cereals ($420.4 million, 3.5%) and sugars ($422.6 million, 3.5%) indicate gaps in domestic production, straining the BoP.

3. Trade Balance

• Calculation:
  • Exports: $7,063,098,000.
  • Imports: $12,051,010,000.
  • Trade Deficit: -$4,987,912,000 (~70.6% of export value).
• Implication: The $4.99 billion deficit reflects Tanzania’s reliance on imported energy and capital goods to support growth, necessitating external financing to maintain BoP stability.

4. Balance of Payments (BoP) Impact

The trade deficit is a major component of the current account, which also includes services, primary income (e.g., investment income), and secondary income (e.g., remittances). Using the trade data and estimates from prior analysis:

• Current Account:
  • Trade Balance (Goods): -$4,987,912,000 (200% of the current account deficit).
  • Services Balance: ~+$1,500,000,000 (60% offset, driven by tourism revenue from Serengeti, Zanzibar).
  • Primary Income: ~-$500,000,000 (20% worsening, due to profit repatriation by foreign mining firms).
  • Secondary Income: ~+$1,500,000,000 (60% offset, from remittances ~$400–500 million and aid ~$1 billion).
  • Estimated Current Account Deficit: ~-$2,487,912,000.
• Capital Account:
  • ~+$500,000,000 (from grants, e.g., for infrastructure projects).
• Financial Account:
  • ~+$2,000,000,000 (from FDI in mining/energy and loans, e.g., from China for ports/railways).
• Overall BoP Balance:
  • Current Account: -$2,487,912,000.
  • Capital + Financial Accounts: +$2,500,000,000.
  • Net BoP Deficit: ~-$12,912,000 (financed by drawing down reserves).
• Percentage Insights:
  • The trade deficit drives ~200% of the current account deficit, making it the primary BoP challenge.
  • Tourism and remittances/aid offset ~120% of the trade deficit, highlighting their critical role.
  • FDI and loans cover ~100% of the current account deficit, but reliance on external financing risks debt accumulation.

5. Economic Implications and Recommendations

• Export Dependence: Precious stones (52.4%) and agriculture (~27%) dominate exports, but reliance on raw goods limits value. Processing cashews or coffee could increase earnings by ~20–30% per unit (e.g., roasted coffee fetches higher prices).
• Import Pressures: Fuel imports ($3.1 billion, 25.9%) are a major BoP drain. Leveraging Tanzania’s offshore gas reserves could save ~$1–2 billion annually.
• Food Security: Cereal imports ($420.4 million) suggest domestic shortfalls. Boosting local production could reduce this by ~50%, saving ~$200 million.
• BoP Strategy:
  • Diversify Exports: Invest in agro-processing (e.g., $100 million in cashew processing plants could boost fruit/nut exports by 10–15%).
  • Reduce Fuel Imports: Develop domestic gas infrastructure to cut ~30% of fuel import costs.
  • Enhance Tourism: Increase tourism revenue by 10% (~$150 million) through marketing.
  • Sustainable FDI: Attract FDI in manufacturing to reduce import reliance on machinery/plastics (~$2.5 billion combined).

Conclusion

Tanzania’s trade data reveals a $4.99 billion trade deficit, driven by high imports of mineral fuels (25.9%), machinery (14.1%), and vehicles (14.5%), against exports dominated by precious stones (52.4%) and agricultural goods (~27%). This trade deficit contributes to an estimated current account deficit of $2.49 billion, partially offset by tourism (~$1.5 billion) and remittances/aid (~$1.5 billion). The BoP is balanced by capital inflows (~$500 million) and financial inflows (~$2 billion from FDI/loans), with a small residual deficit (~$12.9 million) likely financed by reserves. To improve the BoP, Tanzania should diversify exports, reduce fuel imports, and enhance tourism and agricultural productivity.

Tanzania Export and Import Summary Table

Notes

• Export Insights: Exports are dominated by primary commodities, with precious stones (52.4%) reflecting Tanzania’s mining strength (gold, tanzanite). Agricultural products like fruits, tobacco, vegetables, and coffee contribute ~27%, but the reliance on raw goods highlights the need for value-added processing.
• Import Insights: Imports are led by mineral fuels (25.9%), machinery (14.1%), and vehicles (14.5%), indicating energy dependency and investment in infrastructure. Cereals and sugars (not in top 5 but notable at ~7% combined) suggest food security gaps.
• Trade Balance: The $4.99 billion deficit drives a current account deficit, estimated at ~$2.49 billion, partially offset by tourism (~$1.5 billion) and remittances/aid (~$1.5 billion). Capital and financial inflows (~$2.5 billion) finance most of the deficit.
• BoP Implications: The trade deficit strains foreign exchange reserves, requiring FDI and loans. Diversifying exports and reducing fuel imports are critical for BoP stability.