IMF boosts balance of payment account

IN a rare feat, the country’s economy registered a staggering USD 620.4 million (approx. 806.4bn/-) balance of payment surplus thanks to disbursements from International Monetary Fund (IMF) during the year ending September 2009.

Bank of Tanzania (BoT) said in its October 2009 monthly economic review report that the IMF disbursed funds through Exogenous Shock Facility and allocated Special Drawing Rights to the country which contributed to the improvement of gross reserves position.

“The gross international reserves rose to USD 3,560.3 million as at end of September 2009 from USD 2,692.9 million recorded in the corresponding period a year ago,” the central bank report noted.

The gross international reserve is enough to cover about 5.7 months of imports of goods and services. The central bank report further pointed out that the positive development was also made possible by reduced current account deficit thanks to a fall in imports and a surge in exports.

“Moreover, there was a surge in official current transfers to USD 832.7 million from USD 432.8 million recorded in the corresponding period last year which resulted into the improved performance in the current account,” it stated.

The country which qualified for a policy support instrument by International Monetary Fund last year, made significant progress in balance of trade with surging exports which grew by 7.9 per cent to earn over USD 2.6bn during the year.

Traditional exports such as coffee, cotton, tobacco, fish and horticultural produce teamed up with gold and manufactured goods to boost the fragile export account which led to the positive development.

“In September 2009, the value of traditional exports increased to USD 45.0 million from USD 37.5 million recorded in the previous month mainly on account of a rise in the export volumes of cotton, coffee and cloves,” the report noted.

On a year to year basis, the value of traditional exports rose to USD 497.2 million from USD 372.4 million recorded in the corresponding period in 2008 a development which was mainly caused by a surge in the export volumes of coffee, tobacco and cloves.

With the exception of tea, tobacco and cashew-nuts which recorded increases in the export unit prices, other traditional exports recorded declines in prices.

source; daily news