Tanzania trade deficit doubles due to oil demand

By BUSINESS REPORTER

TANZANIA’S current account deficit more than doubled in the year to March following a sharp rise in oil imports and a decline in transfers of aid and loans, its central bank said yesterday.

The deficit widened by 117.2 percent to $5.178 billion from $2.384 billion the year ago, highlighting an underlying economic weakness that has put downward pressure on currencies in neighbouring Uganda and Kenya as well.

Oil imports surged 82.8 percent to $3.592 billion due to a rise in domestic demand and higher commodity prices on the world market.

The country's total imports bill rose by 35.9 percent to $12.643 billion, while exports increased by 11.5 percent to $6.934 billion from a year ago.

"The worsening of the current account balance was intensified by the decline in official current transfers by 13.4 percent to $598.7 million," Bank of Tanzania said in a statement.

Official current transfers are composed of aid and loans from external sources.

Tanzania, which has significant natural gas deposits, is one of Africa's biggest per capita aid recipients, having received $453 million of aid for its 2011/12 budget.