Chronicle Editor
ZIMBABWE’S trade deficit narrowed in the first quarter after a drop was experienced on both sides of the trade matrixes. According to figures from Zimstat, imports were down to $1,32 billion from $1.6 billion in the same comparable period last year mainly due to a cocktail of import restrictions placed on selected products by Government, weak industry demand for raw materials, continued weakness in the South African rand, the country’s main trading partner (traders are now paying less to get goods from the country), a decline in the value of petroleum products due to lower crude oil prices and troubles in the external payment systems.
Exports were at $625.96 million, a decrease of 12,6 percent from $716,6 million last year mainly affected by the low start to the tobacco selling season and weak commodity prices amid tepid global economic recovery while the strong US dollar has seen products from the country less competitive.
On the imports, the country imported almost $1 million worth of apples, $21,85 million of wheat, $51,16 million of maize as part of ongoing efforts to mitigate the effects of the El-Nino induced drought, $15,75 million rice while the cooking oil industry imported $24,9 million of crude soya bean oil.
The country also imported about $50 million worth of medicines for chronic illnesses.
Of the major petroleum products, unleaded petrol was at $118,96 million, $4,01 million of paraffin, $220,5 million diesel which is also essential in industry and $6,07 million of lubricating oils.
In order to ease load shedding, imports of electrical energy were at $47,63 million as suppliers from Mozambique and South Africa are operating on a cash basis model. However the situation is unsustainable going forward as the import tariffs are much higher than what is currently obtaining especially when the power utility is saddled with a +$1 billion debt.
Generally, Zimbabwean imports are largely consumptive in nature with the bulk going to retail and distribution. $317 000 worth of chewing gum was imported in the period, $689 000 worth of mineral water which is readily available in the country, and $3 million worth of skin care products.
The major exports remained primary commodities although there is a current push to beneficiate raw materials in the country.
The manufacturing sector’s export performance between 2014 and 2015 indicates that the sector’s capacity to export is declining.
In addition, the process of obtaining export documentation (permits/licences) and achieving export compliance makes it cumbersome to export. The challenge with the permits is not only their cost but also the time it takes to process them, which in itself is a higher cost.
ZimTrade is currently pushing for export reforms while the organisation is at the forefront of calling for the addressing of trade facilitation issues for the country to realise an export economic growth.
Some countries in the region (eg South Africa), provide export incentives to facilitate their companies to do business across borders. – Wires.
Online Reporter
dyton mupawaenda