Tanzania c/a deficit soars on higher oil imports

DAR ES SALAAM (Reuters) - Tanzania's current account deficit jumped 67.9 percent in the year to July following a sharp rise in oil imports, its central bank said on Wednesday.

The deficit in east Africa's second-biggest economy widened to $4.13 billion from $2.46 billion in the year ago period.

Oil imports surged 56.2 percent to $3.621 billion due to a rise in domestic demand for thermal power generation.

"There was also a substantial increase in imports of machinery for gas and oil exploration," said the central Bank of Tanzania in its latest monthly economic review report.

Imports of machinery rose 35.6 percent to $1.92 billion, said the central bank.

Tanzania is fast becoming a regional energy hub following recent major discoveries of natural gas in its offshore.

The country's total imports bill rose by 26.2 percent to $12.965 billion, while exports increased by 12.7 percent to $8.038 billion from a year ago.

The central bank said gold exports, the country's top foreign exchange earner, rose 21.9 percent in the year to July largely due to an increase in gold prices at the world market, fetching $2.26 billion.

Tanzania, with a population of around 43 million, is Africa's fourth-largest gold producer after South Africa, Ghana and Mali. Gold accounted for 54.6 percent of the country's total non-traditional exports.

The price of gold on the world market went up by 19.2 percent to $1,672.6 per troy ounce in the year to July, while the export volume of the precious metal increased to 39.8 tonnes from 37.0 tonnes previously.

Tourism earnings increased to $1.488 billion from $1.322 billion a year ago, on higher tourist arrivals.

Gross official foreign exchange reserves held by the central bank rose to $3.855 billion in the year to July, or about 4.1 months of import cover, from $3.539 billion a year ago.