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Tanzania’s cross-border trade surplus grows by 24.8 percent, boosted by export surge
Cross border cargo trucks transport goods from Tanzania to Rwanda.
What you need to know:
- With the expansion of cross-border trade showing promising growth, Tanzania’s efforts to improve trade relations with its neighbors and build a strong economic foundation continue to bear fruit.
Dar es Salaam. Cross-border trade between Tanzania and its neighboring countries has seen significant growth, with the trade surplus expanding by 24.8 percent to reach Sh1.3 trillion for the quarter ending September 2024, according to the latest report from the Bank of Tanzania (BoT).
All regions reported a trade surplus, with the exception of the northern zone. The most notable increase in trade was observed in the Lake Zone, which saw a rise in exports of unrefined gold, rough diamonds, fish and fish products, cosmetics, tiles, and food items.
The Ministry of Industry and Trade attributed the boost to the government's commitment to attracting investment, creating a favorable business climate, and removing several non-tariff barriers (NTBs) between Tanzania and its trading partners, particularly Zambia.
The Consolidated Zonal Economic Performance Report for the year ending September 2024 also highlighted strong growth in the southeastern and southern highlands zones, driven by higher exports of manufactured goods, including cement, maize flour, and juice.
In contrast, the northern zone experienced a widening trade deficit, which surged to Sh495.7 billion from Sh93.4 billion during the same period in 2023. This was primarily due to increased imports of ethylene polymers, tractors, vehicles, medicaments, and other goods.
Dr Lutengano Mwinuka, an economics lecturer at the University of Dodoma (Udom), noted that the improvement in cross-border trade could be attributed to several factors, including strong diplomatic relations between Tanzania and its neighbors, which have paved the way for trade agreements like the recent maize trade pact with Zambia.
“The good relationship between neighboring countries, coupled with signed trade agreements, significantly boosts business activities. For instance, the maize trade agreement with Zambia has proven beneficial,” Mwinuka said.
He also emphasized the growing competitiveness of Tanzanian products, thanks to improvements in quality, which have made them more appealing in international markets.
However, Mwinuka urged businesspeople to invest more in infrastructure, particularly hotels, to support the growing demand for goods. He also stressed the importance of maintaining high production quality to ensure sustainability.
Dr Hashil Abdallah, the Permanent Secretary of the Ministry of Industry and Trade, highlighted three key factors that have fueled the growth in cross-border trade: the government’s proactive stance on opening the country to foreign investors, the creation of a conducive business environment, and the reduction of NTBs with Zambia and other neighboring countries like the Democratic Republic of Congo.
“We have made significant strides in facilitating trade, but there are still issues to address. For instance, a substantial volume of cargo shipments passes through Zambia. If we do not maintain strong relations with Zambia, it could hinder the performance of cross-border trade,” Dr Abdallah said.
Infrastructure improvements, including better ports, policy reforms, and reduced charges, have also played a crucial role in the growth of cross-border trade, according to Dr Abdallah. The Ministry continues to prioritize enhancing the business environment to sustain this positive trajectory.
With the expansion of cross-border trade showing promising growth, Tanzania’s efforts to improve trade relations with its neighbors and build a strong economic foundation continue to bear fruit.
