Zim opens 2015 with negative $271m trade balance

Oliver Kazunga Senior Business Reporter
THE Zimbabwe National Statistics Agency (Zimstat) says the country’s trade balance for last month alone stood at $271.2 million as the value of imported products continues to outpace exports.

Figures from the agency show that goods worth $538.2 million were imported while exports stood at $267 million.

Topping the list of imported products during the period under review were products such as wheat, cane, rice, maize, and crude oil while tobacco, minerals, cotton, wood products and cigarettes topped the exports list.

Over the years, Zimbabwe’s trade deficit has remained on the negative side due to the prevailing economic conditions.

Since the liberalisation of the economy in February 2009, the country has continued to experience an influx of imported products among them basic commodities, clothing and footwear products on the back of depressed manufacturing sector.

Imported products were mainly from countries such as South Africa, Botswana, Zambia, China, Japan, Sweden, United Arab Emirates and Brazil.

Between January and November last year, the country spent $5.79 billion on imports while the value of exports stood at $2.8 billion.

Zimbabwe’s trade balance has been of concern to the government with statistics in the first 11 months of 2014 showing a negative balance of $3 billion.

Domestic industrial production remains suppressed while most goods from local firms are expensive compared to imports.

Higher price margins have been blamed for poor domestic product competitiveness.

Industrialists on one hand blame high costs of production and have engaged the government to implement reforms that would improve their operations.

In the 2015 national budget, Finance and Economic Development Minister Patrick Chinamasa increased duty on most imported products. He also introduced export incentives saying economic growth was underpinned by improving production and export of goods and services through value addition and beneficiation, among other strategies aligned to cluster priorities under the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-Asset) programme.

“In recognition of the need to promote exports, government put in place export incentive schemes, which include duty drawback, inward processing rebate and reduced tax for companies that export more than 50 percent of manufactured output,” he said.

Although measures such as increased duty have been introduced to curtail imports, the government anticipates that they will go up by nearly two percent to $6.5 billion this year while exports are forecast to grow by five percent to $3.83 billion.