Zim gains 13 percent on balance of trade

Oliver Kazunga Senior Business Reporter
ZIMBABWE’S exports in the first five months of the year amounted to $949 million compared to imports valued at $2,07 billion. Latest figures released by the Zimbabwe National Statistics Agency show that the country is heavily skewed towards consumptive products following a significant drop in raw material imports.

During the comparable period last year, Zimbabwe’s exports stood at $1,177 billion. Most of the imports are consumptive products that include cooking oil, soap, sugar, bottled water cell phone handsets, electronics, vehicle spares, and clothing, which account for over 70 percent of the import bill.

On the export side, Zimbabwe is exporting among other products wines, minerals, scrap metal, flue-cured tobacco, beef, and other agricultural produce. Although the country’s trade deficit remains in negative territory, Zimbabwe’s total imports in the first five months declined by 13 percent from $2,38 billion in the corresponding period last year.

Early this year, Industry and Commerce Minister Mike Bimha announced that the government had tightened screws on import permits to protect local industry against the influx of cheap imported products.

The tightening of screws on import permits implies that the government now issues import licences depending on the availability of certain products on the local market and the capacity of local industry to produce.

In 2015, Zimbabwe closed the year with exports amounting to $2.7 billion against imports of $6 billion, showing a $3.3 billion trade deficit. Since 2012, Zimbabwe’s exports have declined from $3.9 billion while imports have also receded from $7.5 billion.

The decline is largely attributable to the continued weakening of commodity prices that make up the bulk of Zimbabwe’s exports in recent years. Following the adoption of a multicurrency system in February 2009, Zimbabwe has become a net importer of finished goods such as clothing and footwear, food and automobile products.

This is on the back of low industrial capacity utilisation by the local manufacturing sector, which according to the Confederation of Zimbabwe Industries (CZI), is operating at 34,3 percent owing to challenges that include lack of working capital, obsolete equipment and stiff competition from imports.