THE shilling has remained stable against the US dollar thanks to inflow from the mining sector and reduction of outbound travel.
From year-to-year to April the shilling, according to the Bank of Tanzania, appreciated by 68/- to 2,309/97 compared to the last April of 2,368/54.
PwC said in its 2021/22 budget bulleting that the shilling managed to hold steadily due to mining sector exports. “And yet,” PwC report said, “the currency has remained stable.
How? Well, riding to the rescue has been the mining sector.” The mining exports of 3.0 billion US dollars in the year to April compared to 2.4 billion last April and 1.7billion same period in 2019 and helped balance the current account.
“Also of assistance on the current account side has been a reduction of outbound travel [with service payments for travel reducing to USD 0.1bn from USD 0.6bn],” the PwC report released last week said.
The shilling, year-to-yesterday, has almost remained at the same level against the US dollars as in January was exchanged 2.309/90 a greenback compared to 2,310/14 yesterday.
Orbit Securities said in its Weekly Market Synopsis report that the shilling not only held ground against the US dollar but also appreciated slightly. “The shilling held ground against the greenback while gaining momentum with a slight appreciation of 3 pips,” Orbit said.
NMB Bank said in e- Market that shilling maintained its steadiness trading session throughout the last week, with moderate activities from importers.
“Inflows from agri-products specifically sesame, cotton and tobacco, continue to support the current demand,” the NMB report said.
However, the shilling on the secondary market closed at 2308/2338 levels against the dollar. The mining sector -and in particular, the two largest gold mines-Geita and North Mara-has also played a role in stabilising government revenues.
“Top line revenue increase, apart from adjusting the base for royalties will also have gone straight to the bottom line and resulted in windfall payments in terms of corporate tax (applied at 30 per cent),” PwC report showed.
For example, AngloGold Ashanti’s 2020 Environmental, Social, and Governance (ESG) and Sustainability Data Workbook discloses total tax payments borne and generated by Geita of 326milion US dollars, up from 190million US dollars in the prior year.
Despite the boost from mining, BoT reports (Monthly Economic Review) indicate that tax revenue collections in the ten months to April were 1.0 per cent below the prior year, with taxes on imports slightly up, consumption taxes-local supplies- flat, and income taxes down.
“Given the results reported by the major consumer goods and services companies, these numbers are not a surprise,” PwC said in the report.