Foreign trade figures of Tanzania

Foreign Trade in Figures

Tanzania is open to foreign trade, which represents 31% of its GDP (World Bank, latest data available). The country's trade policy aims to create local industries that are more competitive and to diversify its export sector in order to stimulate economic growth. Tanzania is a member of several regional and international trade agreements, including the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA), and the African Continental Free Trade Area (AfCFTA). The country has also implemented several measures to facilitate international trade, including the implementation of a single window system for trade documentation and the establishment of trade facilitation committees. In 2021, pearls, precious stones, and metals accounted for around 44.5% of Tanzania's exports, mainly due to gold exports, the main item in the Tanzanian trade balance (42.9% of total exports). Other major exports are rice (4.7%), vegetables (4.2%) and coffee (2.7%). Imports were led by petroleum oils (19.4%), medicaments (3.3%), iron (3.1%), and motorcars (2.2% - data Comtrade).

Tanzania's main suppliers are China (24.8% of total imports), the United Arab Emirates (12.5%), India (11.1%), Saudi Arabia (6.2%), and Japan (4.3%). Its main customers are the United Arab Emirates (16.5%), India (15.8%), South Africa (14.3% of total exports), Switzerland (8.2%), and Kenya (6.2% - data Comtrade 2021). Low customs duties (the trade-weighted tariff rate is 9.7%) and few trade restrictions make the country easily accessible for international trade. Trade barriers are mainly of a logistic and non-tariff nature. For example, increased traffic in and out of the Dar es Salaam port - the main port of entry and exit of merchandise for both Tanzania and its landlocked neighbouring countries (Uganda, Rwanda, Burundi and Zambia) - has not been followed up with the necessary infrastructural investments. This constitutes one of the main barriers to trade with these countries. Poorly maintained roads and railroads also make trade difficult. However, the government has launched a large number of projects to improve infrastructure. Obtaining construction permits, registering land, and tax payments remain difficult nonetheless.

Tanzania suffers from a chronic trade deficit due to a capital-intensive growth model highly demanding oil and capital goods imports. In 2021, merchandise exports reached USD 6.3 billion, while imports amounted to USD 10 billion (+5.4% and +27% y-o-y – data WTO); meanwhile, exports of services reached USD 3.2 billion, while imports amounted to USD 1.7 billion (WTO). In the same year, the World Bank estimated the country’s trade deficit at 2.7% of GDP (from 1% one year earlier). Data from the Bank of Tanzania show that in the first eleven months of 2022 exports of goods and services increased to USD 11.94 from USD 9.73 billion in the same period one year earlier. The increase was largely driven by non-traditional goods exports and services receipts (mostly tourism). On the other hand, imports of goods and services reached USD 16.45 billion, compared with USD 11.21 billion in 2021.