Zanzibar Economy Surges with Tourism Growth in July 2024
ZANZIBAR ECONOMY SURGES DUE TO TOURISM BOOST AND INCREASED CURRENT ACCOUNT SURPLUS.
Zanzibar’s current account surplus has surged in the last 12-month period, driven by the booming tourism sector. According to the Bank of Tanzania (BoT), the current account balance reached a surplus of 506.9 million USD in the year ending May. This is a significant increase from the 389.1 million USD surplus recorded during the same period last year.
Tourism’s Impact on Zanzibar Economy
The BoT’s latest economic review highlights that the rise in service receipts, especially from tourism, has been a major factor in this growth. A current account surplus means the country has more exports and incoming payments than imports and outgoing payments. This surplus indicates a healthy economic position.
Tourism has played a crucial role in Zanzibar’s economy expansion, greatly impacting the balance of payments. The report noted that service receipts from tourism increased by 12%, reaching 1.020 billion USD, due to a higher number of tourist arrivals.
Exports and Imports Overview
Overall, exports of goods and services amounted to 1.084 billion USD in the year to May, up from 975.8 million USD in the same period last year. This increase is largely attributed to higher service receipts. However, clove exports dropped by 32% to 28.9 million USD, reflecting the cyclical nature of the crop.
On a monthly basis, exports of goods and services rose to 103.4 million USD in May from 67.1 million USD in May last year. This growth in Zanzibar economy was again driven by tourism-related activities. Conversely, imports of goods and services slightly decreased by 0.6%, totaling 591.8 million USD for the year ending.
The decline in imports was mainly due to reduced imports of intermediate and consumer goods. Specifically, there was a drop in industrial supplies, fuel, lubricants, food, beverages, and non-industrial transport equipment. However, imports of capital goods increased, driven by ongoing infrastructure projects.
Month-to-month imports of goods (FoB) and services amounted to 43.7 million USD in May, slightly down from 49.7 million USD in the previous May. Experts attribute the growth in the current account surplus to the surge in tourist arrivals and increased visitor spending.
The positive trend in tourism highlights its importance as a key component of Zanzibar’s economy. The island’s unique economic structure, shaped by its history, geography, and political status, continues to benefit from the thriving tourism sector.