Vusumuzi Dube
Judith Phiri , Business Reporter
THE decline in global commodity prices resulted in Zimbabwe exporting goods worth US$1,4 billion during the first quarter of 2023, a decrease of 23,8 percent from US$1,8 billion recorded in the previous quarter.
According to the 2023 First Quarter Bulletin for January to March 2023 released by the Ministry of Finance and Economic Development, the reduction in exports was attributed to the falling in the global commodity prices for Platinum group metals (PGMs), declining gold and tobacco export volumes.
“Major drivers of merchandise exports such as PGMs, gold and tobacco declined except for few minor minerals. The country’s exports were mainly destined for South Africa, Singapore, China, Mozambique, United Arab Emirates, Mauritius and Zambia,” reads part of the bulletin.
In an interview, Zimbabwe National Chamber of Commerce (ZNCC) Matabeleland Chapter chairman, Mr Mackenzie Dongo said a decrease in export values has an effect on reducing foreign currency earnings and inflows into the economy.
“This has a net effect on business cashflow ecosystem. Some of the effects of reduced foreign currency circulation are already being felt in businesses trading in foreign currency such as the fuel sector in the form of reduced sales volumes, especially of late.
The reduction in the volumes based on monetary terms can also be attributed to post-Covid-19 pandemic production and supply efficiency which has seen prices stabilising on the world markets.”
He said it was imperative for the country to double its efforts of opening up new markets in Asia and most recently the European market, while there was a need to take advantage of the African Continental Free Trade Area (AfCFTA) for Africa to trade within itself.
Mr Dongo also commended Government efforts that were being witnessed as the Ministry of Foreign Affairs and International Trade and ZimTrade were continuously promoting international trade.
Local economist and National University and Science and Technology (Nust) lecturer Mr Stevenson Dlamini said the decline in merchandise exports generally has a negative impact on business as it bears directly on their profitability which threatens their viability.
“It also affects the cash flows of the exporting firms which disrupts their operational viability.
In as much as exports tend to be affected mainly by external shocks as mentioned in the report, such as the global geopolitical turmoil and the global economic slowdown, they are also affected by local factors, especially the macroeconomic policy,” said Mr Dlamini.
He said within the purviews of the Government, there was need for creation of an enabling environment for the exporting firms through fiscal incentives such as increased foreign currency retention and other tax incentives.
Meanwhile, similarly, merchandise imports decreased by 13,1 percent to US$2 billion from US$2,3 billion spent during the fourth quarter of 2022.
According to the bulletin, the reduction in imports on quarterly basis is attributed to seasonality as the imports increased by 1,9 percent relative to the comparable period the previous year, 2022.
Imports were driven by fuel, electricity, maize and wheat while dairy produce, crude soya-bean oil and palm oil (excluding crude) declined.
The country’s imports for the first quarter were mainly sourced from South Africa, China, Singapore, Zambia, Mozambique and Mauritius, among other markets.
Online Reporter