Earnings from gold have continued to drop, dealing Tanzania’s external trade a major blow last year after the country recorded a slump in the value of the goods and services it exported.
The latest Central Bank review of the economy shows that the trade deficit widened further last year after the value of exports of goods and services declined to $8,519.1 million from $8,675.6 million in 2012.
The Bank of Tanzania (BoT) attributes the slump in export earnings to a drop in the value of goods exported in the year, with gold playing a major role.
Only manufactured goods performed better in this category, raking in $1,072.1 million. Whereas foreign exchange from exports dwindled by about $156.5 million, the import bill went up by 7.3 per cent to $13,602.2 million in 2013, from the previous year’s $12,678 million.
The surge saw the trade balance–the difference between export and import proceeds–rise to $5,083 million from the 2012 deficit of $4,002.4 million.
“The value of non-traditional exports declined by 9.2 per cent from the amount recorded in 2012 to $3,782.3 million in 2013, mainly on account of low export value of gold,” BoT notes in the January monthly economic review.
“The value of gold exports declined after a fall in both export volume and unit price. Despite the decline, gold continued to dominate non-traditional exports, followed by manufactured goods.”
Last year, gold exports fetched $1,732.9 million compared to $2,117.4 million and $2,224.1 million earned in 2012 and 2011 respectively. Much of the foreign exchange came from the travel trade, which brought in $1,888.4 million that made it the major source of export earnings during the year.
The decline in gold export earnings is likely to affect the contribution of the sub-sector to the national economy, which has not been convincing so far. There is a belief in many quarters that the country benefits very little from the industry and these concerns have led to revision of the law regulating the sector.
According to the Tanzania Chamber of Minerals and Energy, the industry now directly employs over 15,000 people, up from the 1,781 jobs it created in 1997 when large-scale mining took off. In 2012, the sector contributed 3.5 per cent to the gross domestic product (GDP).
Between 1997 and 2012, mining companies paid a total of $1.339 billion (Sh2.17 trillion) to the government in royalties, statutory taxes and other contributions.
NMG
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