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Acting Business Editor
THE growing imports dependence has been worsened by the continued closure of industries, the Reserve Bank of Zimbabwe acting Governor Dr Charity Dhliwayo has said.Despite the liberalisation of the economy in February 2009, local companies’ productive capacity has not been competitive in light of competition from cheap imported products due to liquidity crunch in the economy among other fundamentals.
Due to low capacity utilisation levels, the local manufacturing sector has been forced to either scale-down operations or close down resulting in the country relying more on imported products mainly from the neighbouring country South Africa for basic commodities and China for clothing, textile and footwear, among others.
“The country’s external sector position remains precarious on the back of uncompetitive exports and the absorption of disproportionately huge imports.
“Growing import dependence has largely been occasioned by widening capacity gaps in the wake of endemic company closures,” she said.
Latest figures from the Zimbabwe National Statistics Agency (Zimstat) show that the country’s trade imbalance rose by 16 percent in 2013 in comparison to the previous year.
The trade deficit stood at $4.2 billion compared to the 2012 figure of $3.6 billion. Total imports last year stood at $7.7billion, a two percent rise from last year’s figure of $7.4 billion. The rise was mainly due to an increase in the levels of fuel imported.
In 2013, total exports declined by nine percent to $3.5 billion from 2012’s figures of $3.8 billion Total trade declined by 1.3 percent from the previous year’s $11.3 billion to $11.2 billion. The widening of the year’s trade deficit and the decline in the level of exports shows that the economy seriously needs resuscitation.
In addition, the slight increase in the level of imports was also a sign of the depressed disposable incomes. Presenting the 2014 national budget in December, Finance and Economic Development Minister Patrick Chinamasa said growth in exports this year would be hinged on the overall performance of the economy.
Exports are forecasted to reach $5 billion. It is hoped that the growth in exports will rely on access to low costs for intermediate inputs. Reduction of input tariffs, extension of the preferred economic operator status and implementation of the duty drawback system would also revitalise the growth of exports of goods and services.
Online Reporter