The Bank of Tanzania’s September Monthly Economic Review shows the Isles’ external sector remains resilient, playing a vital role in safeguarding foreign exchange reserves and supporting macroeconomic stability
Unguja. Zanzibar’s economy has sustained a strong post‑pandemic recovery, with the current account surplus rising 42.1 percent to $673.3 million in the year ending August 2025, driven by robust tourism earnings.
The Bank of Tanzania’s September Monthly Economic Review shows the Isles’ external sector remains resilient, playing a vital role in safeguarding foreign exchange reserves and supporting macroeconomic stability.
Exports of goods and services rose 25.7 percent to $1.3 billion, up from $1.03 billion a year earlier.
This growth was led by a 30.6 percent increase in service receipts to $1.27 billion, with tourism at the forefront.
Tourist arrivals surged 26.1 percent to 861,962 visitors over the year, underlining tourism’s critical role in foreign exchange earnings, job creation, and attracting investment.
Conversely, clove exports, Zanzibar’s traditional export, fell sharply, reflecting cyclical production trends.
Exports of goods and services rose to $151.7 million in August 2025, from $104 million in the same month last year.
Imports of goods and services rose 12.3 percent to $648 million, driven mainly by higher imports of capital, intermediate, and consumer goods. Capital goods imports climbed 94.9 percent to $28.3 million, reflecting stronger demand for machinery and mechanical appliances.
Consumer goods imports grew 21.3 percent to $71.7 million, supported by higher purchases of non‑industrial transport equipment and food items.
Inflation eased to 3.9 percent in August 2025, down from 4.1 percent in July and 5.1 percent a year earlier, aided by lower food prices that reduced food inflation to 4.2 percent from 8.9 percent in August 2024.
Improved food supply, lower import costs, a stable exchange rate, and reduced transport costs supported this moderation.
On the fiscal side, revenue performance was robust. Total funding, comprising domestic revenue and grants, reached Sh178.5 billion in August 2025, exceeding the target by 2.7 percent.
Domestic revenue stood at Sh174.5 billion, with grants making up the rest.
Tax revenue was Sh158.7 billion, surpassing projections by 5.1 percent, while non‑tax revenue reached Sh15.8 billion, or 78.1 percent of the target.
Government spending in August totalled Sh308.1 billion, with recurrent expenditure of Sh168 billion and Sh140.1 billion on development projects, 85 percent funded domestically.
Economists say Zanzibar’s strong external performance, driven by tourism and prudent fiscal management, reinforces its position as one of East Africa’s most resilient small economies.
They caution, however, that sustaining growth will require diversification beyond tourism and cloves, alongside measures to ease import pressures and boost productive investment
