Online Reporter
Ivan Zhakata
Herald Correspondent
ZIMBABWE’S trade deficit narrowed sharply in October to US$3,6 million, a major improvement from US$20,7 million recorded in September, driven largely by stronger export growth that outpaced the rise in imports.
This is according to the latest External Trade Statistics released by the Zimbabwe National Statistics Agency (ZimStat).
This marks one of the smallest monthly trade gaps recorded this year and points to improving foreign currency inflows at a time the country is pushing export growth to stabilise the economy.
ZimStat said exports reached US$1,02 billion during the month, representing a 20,2 percent increase from September, while imports rose by 17,8 percent to US$1,03 billion.
The agency said the improvement demonstrates strengthening performance in key export sectors.
“Zimbabwe’s exports for October reached US$1,02 billion, reflecting a 20,2 percent increase from September,” the agency said.
It added: “Imports totalled US$1,03 billion, representing a 17,8 percent rise.”
“What we are seeing is the effect of higher mineral output and firmer global commodity prices. October’s export rise is an encouraging indicator,” ZimStat said.
A narrower trade deficit means the country is retaining more foreign currency rather than losing it through imports.
This development helps ease pressure on the local currency, supports the Reserve Bank’s forex reserves, improves liquidity for critical imports such as fuel and medicines, and strengthens the balance of payments position.
It also signals improved competitiveness, particularly for mining exports, which currently drive the bulk of the country’s foreign earnings.
The improvement in export earnings is also being supported by global commodity prices, which have been firming over the past months following increased global demand, supply disruptions in major producing regions and heightened investor interest in minerals regarded as safe assets during periods of economic uncertainty.
Zimbabwe, whose exports are dominated by gold, platinum group metals, tobacco and nickel, typically earns more when prices of these commodities rise internationally, resulting in stronger monthly forex inflows.
Exports in October were led by semi-manufactured gold, which contributed 45,2 percent of total earnings, followed by tobacco at 14,8 percent and nickel mattes at 12,5 percent.
These three commodities accounted for over 70 percent of the export basket.
On the imports side, mineral fuels remained the biggest expense at 20 percent of the total import bill.
Machinery and mechanical appliances contributed 10,6 percent, while cereals and vehicles accounted for 9,2 percent and 8 percent respectively.
Economic analyst Mr Butholezwe Ndlovu said the country’s import structure reflects long-standing economic challenges.
“We still rely heavily on fuel and machinery imports, and we are also importing a lot of food. Until domestic production strengthens, the import bill will stay high,” he said.
The United Arab Emirates remained Zimbabwe’s single largest export destination in October, absorbing 49,8 percent of exports, mainly gold.
South Africa accounted for 20,6 percent, while China received 12,7 percent.
Collectively, the three countries accounted for 83 percent of export revenues.
South Africa continued to dominate the import side, supplying 37,4 percent of Zimbabwe’s imports, followed by China at 15,9 percent, the Bahamas at 8,9 percent and Bahrain at 5,7 percent.
Trade experts said the figures demonstrate Zimbabwe’s export potential but also highlight the urgency of diversifying into processed and value-added goods.
Trade expert Dr Tapuwa Musikatiwere said: “The figures show we can narrow our deficit when exports perform well, but we still rely heavily on raw commodities. Long-term growth depends on adding value before exporting.”
ZimStat is expected to issue the full-year external trade report at the end of December.
