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THE  trade deficit in the year to December widened to US$4,19 billion with the country recording a 10 percent decline in exports.
According to statistics from ZimStat, imports amounted to US$7,704 billion while exports totalled US$3,507 billion (2012: US$3,88 billion).

At half year, the country’s trade deficit was US$2,37 billion after imports of US$3,92 billion and exports amounted to US$1,546 billion.
Overall, the imbalance increased 16 percent last year from US$3,6 billion in 2012.
Exports were mainly skewed towards minerals and tobacco.

The country also exported US$12,87 million worth of collections and collector’s pieces of zoological interest.
The poor performance of exports is linked to unreliable supplies and inability of local manufacturers to compete on price.
Barclays Bank managing director Mr George Guvamatanga, last week said the country was finding it difficult to compete with South African manufacturers due to the strength of the US dollar.

He added that perhaps the country was not in deflation but was rather in some sort of price correction as most goods and services are overvalued. In 1992, more than a quarter of listed firms were exporters.

However, according to the World Bank less than 10 percent of the firms are now exporting their outputs.
Generally in Zimbabwe, businesses are not deterred by lack of knowledge of exports markets or importing country barriers but rather lack-of-short-term finance for exports is limiting export-led growth, for firms that could potentially compete globally.

Imports were as always made up largely of fuels, cars and selected agricultural or processed agricultural products.
South Africa remained the biggest trading partner accounting for US$3,65 billion imports and exports of US$2,6 billion. China imports were at US$438,79 million and exports at US$85 million.

No improvement in the trade deficit is anticipated in the short to medium term as industry continues to be under-capitalised, continued policy uncertainty and concerns over the attraction of Zimbabwe as a predictable foreign direct investment destination. However, economist Dr John Robertson said the trade gap might not strangely enough continue to widen as the country’s ability to pay for imports is shrinking fast and that could be an important factor..

“This will not continue because export revenue is not growing, but as a country we need to improve and rebuild production capacity as well as facilitate foreign investment,” he said.

He said the trend on trade balance was not sustainable for the economy since the little capital was being exported to other countries and worse still the country did not have its own currency.

Another economist Mr Eric Bloch said there was need to concentrate on improving production and at the same time government should incentivise exports in order to narrow the gap.

Mr Bloch said in 2014, the country will still have a negative trade balance though slightly lower than last year.
However, he was optimistic that by year end there might be a marked improvement on the situation with the trade deficit, that might see a steady recovery of the economy. He said there was need to improve on exports especially from mining and tobacco as these would help the economy to recover at a much faster rate. – FinX.