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).