Imports drop as trade deficit narrows

30 Aug, 2016 - 00:08 0 Views
Imports drop as trade deficit narrows Minister Bimha

The Herald

Minister Bimha

Minister Bimha

The country’s total import bill dropped 20,34 percent in the seven months to July due to a number of factors which include troubles in the external payment systems, import restrictions placed on selected products by Government, troubles in the external payment systems and weak industry demand for raw materials.Weakness in the South African rand, whose country is the biggest trading partner, has also contributed with the rand trading around 12,45 on the dollar last year against last month’s 13,9.

Data from Zimstat shows that imports fell to $2,89 billion from $3,62 billion same period last year. Month on month, July imports fell 8,09 percent to $394,83 million from June’s bill of $429,58 million as foreign payments continue to face delays.

The greatest effect has been payments to countries out of Africa where supplier terms are stricter.

In the period, monthly imports from Singapore fell 31,55 percent to $71,14 million in July from $103,94 million in June and United States dropped 46,7 percent to $4,83 million from $9,08 million in the same period.

The full impact of Statutory Instrument 64 of 2016 are expected to kick in from August going forward.

Imports from China totalled $214,5 million but South Africa remained dominant at $1,14 billion. There was an increase month on month on SA imports of 4,58 percent to $176,37 million from $168,64 million as the rand began to firm from lows of 15 to the dollar.

South Africa has been most vocal about recent measures by Government to control the imports of selected products.

At the ongoing Southern African Development Community Summit preparatory meetings in Swaziland, Industry Minister Mike Bimha said the issue of the SI had been discussed under SA-Zim bilateral engagement. The discussions also included the tariff phasedown of 112 products proposed by SA.

Though Zimbabwe continued to import goods which are readily available here such as sweet potatoes, carrots, natural honey, shelled macadamias, lemons; the rate is much lower than last year.

Grape imports dropped to $1,5 million from $1,9 million last year. Apple imports were at $2,58 million.

Wheat worth $51,11 million was brought in as the winter crop continues to decline while maize imports were at $142,81 million.

In spite of excess seed capacity, imports were at $538 645. Rice (bulk) at $36,98 million is a fall from $59 million last year. Crude soya bean oil used in cooking oil manufacturing was at $61,79 million.

Petrol imports were at $235,14 million, down 7,7 percent against $254,89 million last year.

Diesel was at $445,8 million against $491 million last year while electricity imports rose to $76,64 million from $28,8 million and against exports of $3,5 million.

Total exports in the period were at $1,3 billion, a 10,2percent drop from $1,45 billion last year. As a result, the trade deficit narrowed 27percent at $1,58 million against $2,16 million last year.

Flue cured tobacco exports at $274,35 million were 5,9 percent lower than the $291,5 million sold last year.

On the minerals side granite exports increased to $22,5 million from $15,09 million last year, nickel near flat at $152 million and diamonds at 77 million against $123,6 million last year due to the consolidation disruptions.

Gold exports were at $447,23 million, an increase of 20,85 percent as global prices firmed against last year while Government has also put in place measures to get more output from the small scale mining sector.

Platinum exports were down to $26,29 million from $35,51 million same period last year.

The RBZ in May announced a 5percent export incentive which will be funded through a $200 million Afreximbank facility.

Some countries in the region (eg South Africa), provide export incentives to facilitate their companies to do business across borders.

Generally, manufacturing sector’s export performance between 2014 and 2015 indicates that the sector’s capacity to export is declining. In addition, the process of obtaining export documentation (permits/licences) and achieving export compliance makes it cumbersome to export.

The challenge with the permits is not only their cost but also the time it takes to process them, which in itself is a higher cost.

ZimTrade is currently pushing for export reforms while the organisation is at the forefront of calling for the addressing of trade facilitation issues for the country to realise an export economic growth. – Wires.

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