Beijing — INDUSTRIAL exports rose significantly during the first half of this fiscal year, narrowing the country's current account deficit in a trend attributed to reliable power supply to manufacturers.
The Bank of Tanzania (BoT) said in its latest Monetary Policy Report (MPS) that exports by manufacturers rose to contribute positively to the current account.
The sector's exports increased by almost 14 per cent between July and November 2014, while gold dwindled by 26.4 per cent. Industrial exports rake in 615.6 million US dollars, while gold earned 504 million US dollars.
Traditional exports nosedived by 11.7 per cent to 388.1 million US dollars and non-tradition slid by 1.8 per cent to reach 1.643 million US dollars.
Confederation of Tanzania Industries (CTI), Director of Policy and Advocacy, Mr Hussein Kamote, told 'Daily News' on Wednesday that the availability of relatively stable electricity was the reason behind good exports.
"Stable power availability dominated the good period of last year this plus GDP (Gross Domestic Products) growth poises as the reason behind," Mr Kamote said.
The electricity stability and economic growth gave the manufacturers ample room to increase output as aggregate market demand for industrial goods was naturally created.
The CTI director said deletion of imported cement tax rebate helped local manufacturers to produce more for local and foreign markets, thus enabling them to increase exports especially to SADC and EAC regions.
"Last year cement manufacturers produced at almost 85 per cent of the installed capacity, this is a big output," Mr Kamote said.
The CTI's chief economist said last year's bumper harvest also contributed massively for the success of the manufacturing sector, as good agriculture season go hand in hand with industrial performance.
"Our agriculture and industry are interdependent, the success of one sector is easily reflected to the other," BoT said the narrowing of the deficit reflects in part a fall in the import bill and increase in export earnings from manufacturing, which exceeded earnings from gold, traditional exports and tourism.
"Continued decline in global oil prices and increased earnings from manufacturing exports point to further improvement in the current account in the near term," BoT said in its MPS report.