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Oliver Kazunga Senior Business Reporter
Buy Zimbabwe, a private sector initiative to drive the consumption of local products, says it is impressed by the contraction of the trade deficit in recent months with latest data indicating a 44 percent decrease to US$81,4 million in February 2024 from US$147 million the previous month.
The campaign promotes the production and consumption of locally manufactured products to stimulate the growth and development of competitive domestic industries.
According to the Zimbabwe National Statistics Agency (ZimStat), in February the country exported goods worth US$644 million against import worth US$725,4 million while in January exports valued at US$539,9 million were shipped compared to imports worth US$686,9 million.
ZimStat says Zimbabwe has for the four years operated in a negative trade balance with a cumulative deficit of US$6,8 billion from 2020 to 2023, as the gap between imports and exports generally increased annually.
Buy Zimbabwe chairman Mr Munyaradzi Hwengwere said even though the country continued to register a trade deficit, the trend in recent months indicated that the gap between imports and exports was narrowing.
“The beauty about what you see within the import-export trade data is that for the last two months, I think for the better part of the past year actually, we are still in the negative but the trend is going down.
“What we need to do is to have a better understanding of whether this is systematic or is it seasonal.
“What are the fundamentals that are driving it? Otherwise the general direction is good because in Zimbabwe our aim should be to get into trade surplus where our exports are higher than our imports,” he said.
Mr Hwengwere emphasised the need to develop a strong import substitution framework to reduce dependency on imports.
Over the years, Zimbabwe has largely depended on imports from the neighbouring countries such as South Africa, Botswana and Zambia; importing basic commodities as well as clothing and footwear, among others.
Outside Africa, Zimbabwe imports second-hand clothing and footwear, information communication technology equipment and second hand motor vehicles from countries such as the United Kingdom, America, China and Japan, among others.
Due to the influx of cheap imports, the local manufacturing sector has been grappling with competitiveness issues whose net impact has seen industry struggling to boost capacity utilisation and operational efficiencies.
The Confederation of Zimbabwe Industries (CZI), which represents the local manufacturing industry, is yet to release results of the 2023 manufacturing sector survey, but in 2022 the industrial lobby group reported that capacity utilisation stood at 56,1 percent.
The manufacturing sector survey, which is not limited to CZI members, is carried out annually to give a detailed insight into the performance of the local industry.
The survey covers about 10 industrial sectors including food stuffs, beverages, tobacco, clothing, footwear, furniture, paper (printing) chemicals, non-metallic minerals, transport and equipment.
Capacity utilisation is a key statistic derived from the survey as it details a company and the country’s industrial performance.
“As Buy Zimbabwe we have always said that we must come with intentional programmes where we prefer locally produced goods and where companies in Zimbabwe look to substitute things that can be made in Zimbabwe and we import that which is necessary to import.
“For us to get to Vision 2030 as espoused by President Mnangagwa, it is critical to increase the national wealth that is resident in Zimbabwe.
“Whenever you see a trade deficit you must understand that you are taking from your pocket, from your country and giving it to another country,” said Mr Hwengwere.
“But in terms of the general direction, l think it is good and that’s what the Ministry (Industry and Commerce) and the Government have been espousing and have chosen that it is possible to do so.
“Let us remember this as an economic struggle.”
In an interview, economic commentator Mr George Nhepera said the Government should continue implementing policies that reduce imports.
“In my view, our policies should seek to cut on any unnecessary import bill considered to be luxurious during such a difficult year on the back of the El Nino induced drought in our country,” he said.
Last year, the World Meteorological Organisation warned of the impact of the EI-Nino conditions that have severely impacted farm output in Zimbabwe and many parts of the southern Africa region in the 2023/2024 summer cropping season.
Against this background, the 2023/2024 rainy season has seen the country receiving below normal rainfall as had been predicted that the country and other regional countries would receive normal to below-normal rainfall.
So far, as a result of the El Nino weather phenomenon that is characterised by high temperatures and prolonged dry spells, that has seen farmers who are in crop production particularly maize countrywide counting losses with little or nothing to harvest.
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