Tanzania’s trade surplus jumps 91.6pc in Q1 on robust exports

All zones recorded a trade surplus except the Northern zone, which posted a deficit during the review period.

With demand from neighbouring countries remaining strong, government and private sector stakeholders are optimistic that efforts to boost value addition and expand export markets will further strengthen the country’s external trade balance.

In the Lake zone, growth was supported by increased exports of gold, fish products, and coal. The Southern Highlands zone registered improved performance thanks to a rise in maize flour exports, while the South Eastern zone benefited from higher exports of manufactured goods, particularly cement.

“Export diversification and growing demand from neighbouring markets are beginning to pay off, especially in non-traditional export regions,” said trade economists.

The Northern zone’s deficit was mainly driven by a decline in exports of industrial products such as coal, ceramics, and cement clinker, coupled with increased imports of manufactured goods, including margarine, lubricants, and medicated products.

Commenting on the performance, Ministry of Industry and Trade Permanent Secretary Dr Hashili Abdallah told The Citizen that numerous reforms had been implemented, including the elimination of several levies, which have made doing business easier.

“These reforms are attracting business activities within the Southern African Development Community (Sadc) and East African Community (EAC) regions,” he said.

Dr Abdallah also cited the 2023 trade policy review, which revised outdated provisions and simplified cross-border business procedures.

He noted that while trade disputes had previously affected bilateral ties, progress had been made in resolving them.“As you may recall, there were many trade disputes between Tanzania and Kenya, but we have resolved most of them.

A few issues remain, and we are actively working on them. Just the other day, we were in the Songwe region addressing challenges at the Tunduma border. The goal is to ensure that trade takes place without obstacles,” he said.

The ministry is preparing a second blueprint to further ease doing business and continues to implement strategies to strengthen regional trade, including updating policies to reflect current realities.

Analysts say the strong trade surplus reflects Tanzania’s growing competitiveness in regional markets, although they caution that some zones continue to face production constraints and rising imports.

Independent economist Mr Renatus Mbamilo said the surge highlights Tanzania’s improved competitiveness and the benefits of enhanced cross-border facilities such as the Namanga and Mutukula One Stop Border Posts (OSBPs) as well as trade facilitation measures.

  The BoT report also pointed to significant zonal differences: the Lake zone leads with gold and fish exports, the Southern Highlands and South Eastern zones benefited from agriculture and coal, while the Northern and Central zones posted smaller surpluses due to lower output.

These patterns, experts say, call for region-specific export strategies and reforms to improve the investment climate and regulatory environment. The surplus is already translating into tangible benefits for farmers, artisanal miners, transporters, and service providers.

  Smallholder farmers are earning better farm-gate prices, traders are benefiting from cross-border logistics, and mining communities are enjoying stronger export demand.

“To sustain this momentum, Tanzania must diversify its export base, scale up value addition, and deepen regional trade agreements under the African Continental Free Trade Area (AfCFTA).

These steps will help convert current trade gains into broad-based economic transformation in line with the Tanzania Development Vision 2050,” Mr Mbamilo said.

University of Dodoma agricultural trade economist Dr Lutengano Mwinuka added that value addition and processed products had significantly enhanced the worth of exports, contributing to stronger performance in specific economic zones.

He urged the creation of a more conducive environment to attract investors, particularly in agriculture, livestock, and horticulture, to help stimulate growth in the Northern zone, which has lagged behind due to its reliance on tourism and small-scale farming.

Independent economist Mr Oscar Mkude linked the positive external trade performance to improving global economic conditions following the Covid-19 pandemic and supply chain disruptions caused by the war in Ukraine.

“Tanzania has been relatively resilient and has managed to turn around better than many countries, positioning itself to meet the rising demand for its exports,” he said.

Mr Mkude emphasised that to maintain the momentum, Tanzania must strengthen and safeguard export-oriented sectors in the short term.

In the long run, he said, the country must diversify its export sector, with a focus on agriculture and value addition to make gains more inclusive and job-rich.