Gold weighs on June exports

24 Sep, 2019 - 00:09 0 Views
Gold weighs on June exports

The Herald

Golden Sibanda Senior Business Reporter
ZIMBABWE’s exports fell 32 percent in June this year weighed down by reduced shipments of major mineral exports, latest statistics from the Reserve Bank of Zimbabwe (RBZ) show.

The drop in exports came against marginal growth in imports, resulting in the widening of the trade deficit from US$93,6 million in May 2019 to US$217,4 million in June 2019.

Zimbabwe’s trade balance continues to be weighed down by significant mismatch between exports and imports given its reliance on foreign products and dependency on predominantly low value unprocessed export products; mainly minerals and tobacco.

In fact, Zimbabwe is imports dependent because its industry is one of the most constrained productive sectors in the country with the average capacity utilisation well below 42 percent, according to Confederation of Zimbabwe Industries (CZI).

Overall exports took a dip both in the first and second quarter of the year due in part to a slowdown in the global economy, but more significantly concerns over foreign currency retention thresholds among small-scale gold producers and chrome miners.

According to the Reserve Bank of Zimbabwe’s monthly economic review statement for June 2019, merchandise exports fell by 32,6 percent from US$458,6 million in May 2019 to US$309,2 million in June 2019.

“The decline was underpinned by a fall in export earnings of gold, ferrochrome and industrial diamonds. Gold exports declined by 31,3 percent; industrial diamonds, 45,9 percent; and ferrochrome, 19 percent,” RBZ said.

The country’s export basket was dominated by exports of nickel ores and concentrates (23,4 percent), gold (20,1 percent), flue-cured tobacco (5,7 percent), and ferrochrome (5,2 percent).

The country’s exports were mainly destined for South Africa, which accounted for about 48,5 percent of total exports, followed by the United Arab Emirates (13,9 percent), Mozambique (9,6 percent), Belgium (2,1 percent), and Zambia (2,3 percent).

However, cumulative exports for the five-month period up to May 2019 stood at US$1,558 billion, a 5,1 percent increase from US$1, 482 billion realised in the comparable period in 2018.

The increase in exports was bolstered by higher export earnings for nickel, tobacco, diamonds and jewellery.

Merchandise imports amounted to US$457,2 million in June 2019, a 4,7 percent rise from US$436,8 million in the prior month. This was largely attributable to the increase in imports of diesel and petrol of 38,3 percent and 19,6 percent, respectively.

The country’s major import sources were South Africa (34,7 percent), Singapore (34,4 percent), China (6,2 percent), Mauritius (2,8 percent) and India (2,2 percent).

Merchandise imports amounted to US$457,2 million in June 2019, a 4,7 percent rise from US$436,8 million in the prior month. This was largely attributable to the increase in imports of diesel and petrol of 38,3 percent and 19,6 percent, respectively.

Merchandise imports for the first five months of 2019 sharply declined from US$2,747 billion in the comparative period in 2018 to US$1,957 billion, a 28,8 percent decline.

Zimbabwe’s cumulative trade deficit between January and May 2019 stood at US$399 billion, which is a significant improvement from a deficit of US$1,265 billion, incurred in the same period in 2018.

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