Trade deficit hits $2,4bn

Enacy Mapakame Business Reporter
Zimbabwe’s trade deficit for the 11 months to December 2018 stood at $2,4 billion, as the value of imports continued to outstrip value of exports, mostly unprocessed raw materials.

Figures from the Zimbabwe national Statistics Agency (Zimstats), show that Zimbabwe imported goods worth $6,3 billion between February and December 2018, from $4,9 billion recorded during the same period the prior year.

This was against exports that came in at $3,9 billion, representing an increase of 14 percent from the $3,4 billion worth of exports recorded in 2017. However, the growth was not enough to offset the ballooning import bill.

According to the Zimstats, South Africa remained Zimbabwe’s top trading partner accounting for the biggest chunk of both imports and exports while Mozambique, China, United Arab Emirates and Zambia have also remained Zimbabwe’s top trade partners.

Tobacco and minerals such as gold, nickel and ferrochrome were the biggest exports by value while Zimbabwe imported diesel, petrol and wheat were among the top imports.

Zimbabwe has been experiencing trade deficits due to a decline in exports, usually unprocessed items such as tobacco and minerals, and a ballooning import bill, mainly for consumptive goods. The country is a net importer of fuel and capital goods. The firming United States dollar has also made Zimbabwe’s products more expensive and exports to the region uncompetitive

Analysts say the trade deficit experienced last year shows the economy has less competitive exports relative to the region partly as a result of operating with a firm USD currency.

“In addition to the supply shortages imports mounted spurred by a domestic growth in aggregate demand fuelled by money supply,” said analysts Equity Axis.

Since dollarisation, Zimbabwe has not achieved any annual trade surplus, but achieved the narrowest gap in 2017 on the back of increased import controls and forex rationing which was coupled with propagation of local industry support measures. In 2011, trade deficit amounted to $5 billion which was the worst since dollarisation. Government has however said it will continue working towards reducing the deficit.

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