In October 2024, Tanzania’s external sector demonstrated notable resilience, driven by robust export growth and a substantial narrowing of the current account deficit. Key contributors include a rise in tourism revenue and strong performance in gold exports, which supported foreign reserves and bolstered economic stability. Despite these gains, the Tanzanian Shilling continued to face depreciation pressures, underscoring the importance of careful currency management to maintain the country's economic momentum and resilience.

1. Current Account Deficit:
   • The current account deficit reduced to USD 2.36 billion in the year ending September 2024, down significantly from USD 3.39 billion in the same period in 2023. This improvement is attributed to a boost in exports and a recovery in tourism, which brought in additional foreign revenue.
2. Exports:
   • Total Exports: Exports of goods and services reached USD 15.35 billion, an increase of 13.4% from the previous year’s USD 13.54 billion.
   • Tourism: Tourism receipts rose to USD 3.83 billion, up from USD 3.16 billion a year earlier. This sector’s recovery reflects increased international arrivals, with a 21.2% rise in tourist numbers to over 2 million visitors, driven by government and private sector promotion efforts.
   • Commodity Exports: Gold exports continued to lead, with non-traditional exports (which include gold) totaling USD 6.83 billion. Gold alone accounted for 47.8% of these exports, underscoring its importance as a foreign exchange earner.
3. Imports:
   • Total Imports: Goods and services imports rose slightly by 2.2% to USD 16.45 billion, driven by higher costs for refined petroleum products (accounting for 19.7% of goods imports), industrial supplies, and equipment. Despite the increase in imports, export growth outpaced it, helping to narrow the current account deficit.
4. Foreign Exchange Reserves:
   • Reserves Level: Tanzania’s foreign exchange reserves stood at USD 5.41 billion, sufficient to cover approximately 4.4 months of projected imports. This level exceeds the national benchmark of 4 months, indicating a strong reserve position and providing a buffer against external shocks.
5. Currency Pressure:
   • The Tanzanian Shilling continued to face depreciation, which signals persistent foreign currency demand pressures despite the improved current account position. While export earnings help support reserves, the currency’s value has been impacted by factors such as global market dynamics and demand for USD.

In summary, Tanzania’s external sector performance reflects solid economic fundamentals, with growth in exports, particularly in tourism and commodities, bolstering reserves and reducing the current account deficit. However, the ongoing depreciation of the Shilling suggests continued foreign