Economy

Zanzibar import bill falls

ZANZIBAR has posted a big drop in the value of imports for the first time in the past seven months due to the shortage of dollars.

Traders spent Sh115.7 billion on goods ordered from abroad for August 2023 compared with Sh162.9 billion in July, according to the data collected by the Office of Chief Government Statistician.

The 29.0 percent— about Sh47.2 billion— fall has come when global prices of major imports went up because of shortage of dollars.

The drop in import bill was largely attributed by a Sh15.3 billion fall in expenditure on intermediate goods used by manufacturers from Sh52.7billion in the July 2023.

Zanzibar manufacturers largely rely on foreign markets for the supply of materials.

Expenditure on fuel, the main driver of the import bill, also dropped from Sh57.7billion in July to Sh52.7 billion in August.

The fall in value of fuel orders largely mirrors a reduction in prices of Murban crude oil from peaks of about $130 per barrel in March 2022 to about $96 today. Zanzibar imports refined fuel from Murban crude oil, largely from the United Arab Emirates.

The expenditure on food and live animals imports, however, declined to Sh16.3 billion from Sh42.0billion in July on the back of increased price of food products such as sugar and rice.

The price of sugar has increased from less than Sh2,000 to Sh3,000 per kilogramme within a short period of three months this year, as consumers called for government intervention.

Exporters earned Sh6.2 billion in August, dropped by 14.3 percent from Sh7.7 billion in July.

Income from food products and live animals, Zanzibar’s largest source export by earnings, decreased from Sh4.7 billion in July to Sh3.7billion in August, while machinery and transport equipment exports went down from Sh1.8 billion in July to Sh112.4million in August.

A widening import-export gap also piles some pressure on the shilling as the demand for dollars outstrips the supply.

Zanzibar has over the years struggled to narrow its goods trade deficit partly due to reliance on traditional farm produce exports such as horticulture and rice.

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