ZIMBABWE recorded a trade deficit of $2,3 billion in the period between February and December 2018, latest trade data has shown.
BY MTHANDAZO NYONI
Figures released by the Zimbabwe National Statistics Agency (ZimStat) show that between February and December 2018, the country imported goods and services worth $6,4 billion against exports of $4,1bn, which remain heavily skewed towards consumptive products.
However, according to ZimStat, the Zimbabwe Revenue Authority (Zimra), which is the source of merchandise trade data, has not provided figures for December 2017 and January 2018.
Between February and November 2017, the country imported goods and services worth $4,6bn against exports of $3,2bn, givinga trade deficit of $1,4bn.
The bulk of the country’s imports in the period under review comprise fuel, electricity, maize, medicines and vehicles, while exports were gold, flue-cured tobacco, ferrochrome, nickel, chrome, and diamonds.
The top five imports in the period between February and December were ranked as diesel, which guzzled $1,02bn, followed by unleaded petrol ($494m), electricity ($151m), crude soyabean oil ($123m) and durum wheat ($108m).
The largest foreign currency earners were gold ($1,1bn), followed by tobacco ($838m), nickel mattes ($525m), nickel ores and concentrates ($394m), ferro-chromium ($244m), chromium ores and concentrates ($94m), diamond ($92m).
Economist and financial analyst Persistence Gwanyanya said government needed to work hard to correct trade imbalances brought partially by the failure to contain expenditure.
“There is an expectation with government that this year, it’s not going to be very good in terms of the trade deficit. The reason being that we are importing far more than we are generating foreign currency,” he said.
“We are failing to contain our imports as a country. We have always been exceeding our target in respect to the imports, which largely speaks to the import dependent nature of the country. We depend largely on imported products and even including the raw materials.”
Gwanyanya said high imports were reflective of the de-industrialisation challenge the economy was facing, adding it was not going to be easy to contain imports within a short space of time.
In the 2019 National Budget statement, Finance minister Mthuli Ncube revealed that the country’s exports were largely uncompetitive due to cost and inefficient production.
“In addition, our reliance on primary commodity exports means less value compared to high value processed goods. The import bill has been dominated by a wide range of imports, some of which are not critical or strategic,” he said.
Going forward, Ncube said measures to address the current account deficit included supporting export-oriented production like horticulture; strategically manage available foreign currency by prioritising import substitution production, for instance, retooling and raw materials.