By Business Insider Reporter
Zanzibar’s external sector began 2026 on a positive trajectory, with January performance showing a strong rebound in exports and continued support from services inflows, according to the Bank of Tanzania (BoT)
The central bank data point to an improving external position at the start of the year, building on the resilience observed throughout 2025 and signalling a favourable outlook for the first quarter of 2026.
“Exports of goods and services increased by 24.7 percent to USD 1,591.9 million in the year ending December 2025, compared with the level recorded
in the corresponding period in 2024,” BoT notes in the January 2026 Monthly Economc Review (MER).
“Services receipts continued to dominate exports of goods and services, supported by a notable increase in tourist arrivals, which grew by 24.5 percent to 917,167 visitors during the year ending December 2025,” it adds.
In January 2026, Zanzibar recorded a marked improvement in goods export earnings compared to the corresponding period of 2025. The performance was driven primarily by traditional export commodities – especially cloves and seaweed – alongside early gains from emerging non-traditional exports.
The rebound reflects improved global demand conditions and ongoing efforts to diversify the Isles’ export base, particularly in value-added and processed products.
Tourism continues to anchor external inflows
According to the February 2026 MER, the services account remained a key stabilising factor in January 2026, with tourism continuing to generate strong foreign exchange inflows.
The recovery in international travel supported Zanzibar’s external balance, helping to offset persistent import-related outflows and reinforcing the role of services exports in the isles economy.
“Exports of goods and services rose by 26.9 percent to US$ 1,634.3 million in the year ending January 2026, compared with the level recorded in the corresponding period in 2025,” reads the report.
“Services receipts continued to dominate exports of goods and services, accounting for about 94 percent, supported by an increase in tourist arrivals to 933,314 tourists from 747,356 in the corresponding period in 2025,” it adds.
Import pressures remain structural
Despite the improved export performance, Zanzibar continues to face a structural trade imbalance driven by high import dependence.
Imports of machinery, consumer goods and industrial inputs remained elevated in January 2026, reflecting ongoing investment needs and consumption demand.
This persistent import requirement continues to weigh on the goods trade balance, underscoring the importance of strengthening domestic production capacity.
“Imports of goods and services grew by 27.8 percent to US$ 757.9 million in the year ending January 2026, compared with the level recorded in the similar
period of 2025. This performance was largely driven by increased imports of capital and consumer goods.
“Imports of capital goods grew by 89.4 percent to US$ 116.3 million, driven primarily by higher imports of industrial transport equipment.”
Q1 2026 outlook and key performance risks
The February 2026 review indicates that the positive momentum observed in January is likely to continue into the first quarter of 2026, supported by:
- Sustained tourism inflows during peak travel season
- Continued recovery in traditional exports such as cloves
- Gradual expansion of non-traditional and value-added exports
However, the external outlook remains sensitive to import dynamics, particularly fuel, consumer goods and capital equipment demand.
While the outlook for the quarter remains broadly positive, several risks could moderate gains:
- Persistent high import dependence
- Exposure to global commodity price fluctuations, especially cloves
- External shocks affecting tourism demand and travel flows
Bottom line
Zanzibar’s external sector started 2026 on a strong footing, with January data showing a clear rebound in exports and continued strength in tourism-driven services inflows. The Q1 outlook remains positive, but sustained progress will depend on reducing import dependence and expanding export diversification to strengthen long-term external resilience.
