Finance Minister justifies imports increase, says remittances covering US$2,7 billion exports difference




Mthuli Ncube hopes to use Kuvimba to pay off farmers (pic: Tateguru)
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The government has justified the US$ 2.7 billion variance between imports and exports in 2023 as a breather in the economy adding that the difference is being compensated by diaspora remittances.

Zimbabwe has seen a 56% increase in imports since 2019 and the government has since attributed the upward increment to steady economic growth.

In 2019, the country’s imports were US$5.4 billion and have almost doubled with this year’s non-domestic commodities expected to reach US$10 billion.

Presenting at this year’s pre-budget seminar, held under the theme ‘Consolidating Economic Transformation’, in Mount Hampden, Minister for Economic and Investment Promotion, Mthuli Ncube said the country’s economy is showing signs of growth.

In comparison, in terms of export earnings since 2018, the country’s outflows have significantly increased by 71%.

“What we have seen is a sharp growth, a steep growth in imports where we were in 2019 we import US$5,4 billion dollars worth of imports, by 2022 we will have US$9,6 billion and this year we will end at about US$10 billion worth of imports,” said Ncube.

“It shows you that the economy is growing. The economy does not grow without increasing its imports, it cannot afford its imports. This just proves that the economy is indeed growing.

“2018, exports were US5.2 billion in 2022 we were at US$7.2 billion and in 2023, US$7.3billion and 2024 next year we are expecting it to reach US$8 billion.

“You can see again the steady growth in exports. An economy that is not expanding that is not growing cannot have this steady improvement in export performance. This is also proof that our economy is growing,” the minister said.

Mthuli said a healthy economy has more inflows than outflows.

“We all want to know the difference between imports and exports just to be able to measure inflows and outflows. But if you have more out flows than inflows…you are banking you are going to create risk for your state.

“So in our situation I am happy to report that if you look at inflows coming from our exports and you and remittances, those two together on one side and compare to our imports, the difference is positive,” said the minister of Finance.

Current account surplus is envisaged to close the year 2023 at US$248.5 million, slightly lower compared to US$305 million that the country registered in 2022.

“We have been in this positive situation for the last five years and this is quite commendable.”

Mthuli added that comparing Zimbabwe’s export earnings in SADC shows that the country is not a small economy.

“Botswana’s GDP is US$21 billion, with a growth rate this year of 3,8% and its value for exports at US$7,5 billion. Malawi’s GDP is at US$13,3 billion, growth rate 1,6% and value of exports at US$1 billion.

Mozambique, the size of the economy is US$ 18,7 billion, growth rate 2,3% and value of exports at US$ 2 billion.

“Rwanda’s US$ 14,4 billion size of economy, 6,2% rate of growth and US$ 1,6 billion value of exports. Zambia US$ 13,6 size of the economy, 10,6% rate of growth and US$ 10,1 billion value of exports.

“Zimbabwe’s value of the economy is US$ 32,4 billion. Look at the size of the economy compared to Zambia, Rwanda, Mozambique, Malawi and Botswana. We are not an insignificant economy.”

Zimbabwe’s economy, according to Ncube, will grow by 5.5%. – NewZim