Trade deficit reaches $1,5 billion

HARARE – Zimbabwe’s cumulative trade deficit for the six months to July has reached $1,5 billion, latest trade data shows.

Over the years, the country has persistently held an annual trade deficit of $3 billion on the back of falling industrial competitiveness.

Latest figures released by the Zimbabwe Statistics Agency (Zimstat) yesterday showed that between February and July 2018, the country incurred a $1,475 billion trade deficit after importing goods and services worth $3,431 billion against exports of $1,957 billion.

The statistical agency has not provided trade data for January 2018, which would undoubtedly push the trade deficit for the year beyond the $1,5 billion mark.

The figures suggest that the deficit for the full year is set to surpass last year’s levels of around $2,5 billion. This comes as pressures on the country’s economic growth have persisted.

“We are forecasting real GDP growth of just 1,9 percent in 2018 as the economy continues to struggle amid tight hard currency liquidity while the crucial agriculture sector, which is the country’s major employer, will be negatively affected by a poor maize crop after late rains,” BMI, Fitch group research arm, said in a report on Zimbabwe recently.

The widening trade deficit is in direct contrast with government’s efforts to encourage exports.

In a bid to encourage companies to export the government, through the Reserve Bank of Zimbabwe, has over the past two years introduced various export incentive schemes.

Zimtrade, the country’s export promotion body, has cited export permits requirements as one of the major impediments for export business, apart from the prevailing economic conditions which have crippled industry.

Government has, however, exhibited considerable will to improve the ease of doing business within the country.

“Internally, we will speed up the efforts to improve the ease and cost of doing business and economic competitiveness,” President Emmerson Mnangagwa promised the nation in his inauguration speech on Sunday.

In July, the country incurred a trade deficit of $219 million after importing goods and services worth $560 million, against exports $340 million.

Between February and July, Zimbabwe imported goods worth $1,44 billion from South Africa, the country’s largest trading partner, against $917 million exports.

Energy in the form of petrol, diesel and electricity, were the country’s major imports while minerals and tobacco were the major exports. The diesel import bill was $523 million, the petrol bill came in at $268 million while the electric bill was $108 million.

— The Financial Gazette