Export earnings set to increase

US$3,4 billion last year.
Finance Minister Tendai Biti enunciated the growth projection in export earnings in his presentation of the Mid-Term Fiscal Policy Review Statement.

According to the fiscal policy statement, the projected rise in export earnings will be sustained by the growth in agriculture, mining and manufacturing sectors, whose export receipts are also expected to increase by 15,5 percent, 30,6 percent and 16,9 percent.

Economists believe that improvement of the country’s export sector can help ease the prevailing liquidity crunch, as it will result in a more positive balance of payments position.
The cash shortages being currently experienced are partly attributable to import levels outweighing exports.
“Zimbabwe needs to harness all her natural resources in a competitive manner in order to benefit from them at an optimal level. We should also have deliberate policies to encourage beneficiation so that we export high value goods that would fetch more foreign currency.

“To achieve economic growth there is need to reinforce current promulgation of market-based policies, and improvement of our standing as an investment destination standing in order to lure the much needed foreign direct investment,” said one observer.
Data from the budget statement show that imports increased by 32,9 percent in the first six months of this year from US$2,6 billion last year to US$3,4 billion last year, pushing up the country’s deficit.

The balance of trade balance during the period under review slightly widened from US$1,3 billion last year to US$1,4 billion this year as imports grew faster than exports. The increase in imports was attributed to the influx of cheap imports of clothing and textiles, motor vehicles and machinery as well as rising crude oil prices.

In addition, economic activity has been somewhat depressed since the beginning of this year as a result of constrained access to affordable credit for the majority of companies. The dysfunctional effects of Zimbabwe’s present state of trade deficit have been heightened by the fact that the country’s foreign direct investment inflows have stalled in recent years.
The latest United Nations Conference on Trade and Development World Investment Report shows that the country’s FDI flows remained at US$105 million last year from the previous year, against a total for the continent of US$55 billion.