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.