Zim import duty suspension widens trade deficit

Taguma Mahonde
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HARARE – In May 2023, Zimbabwe’s trade deficit increased by 29 percent to US$196.8 million compared to US$152.6 million in April.

The Zimbabwe National Statistics Agency (ZimStats) reported that total imports for May rose by 20.2 percent to US$851 million, while exports increased by 17.8 percent to US$654.2 million. The higher growth rate of imports contributed to the widening trade deficit.

Economic experts attribute the expanding trade deficit to the recent suspension of import duties on basic commodities. The government implemented this measure to stabilize the economy, address price increases, and improve access to essential goods for ordinary citizens.

The main imports by economic category in May were industrial imports (26.4 percent), capital goods (22.9 percent), and fuels and lubricants (22.2 percent). Industrial supplies accounted for 91.1 percent of the main exports, followed by fuels and lubricants at 3.2 percent. Major exported products included semi-manufactured gold (24 percent) and nickel mattes (18.3 percent).

Mr. George Nhepera, the development manager of Lupane State University’s business clinic, highlighted that the importation of raw materials, machinery, and equipment also contributed to the increase in imports and, consequently, the trade deficit. He emphasized the need for Zimbabwe to focus on developing an export-led economy to generate foreign currency inflows, stabilize the exchange rate, and promote economic growth and job creation.

In line with the National Export Strategy launched in 2019, Zimbabwe aims to achieve annual exports of goods amounting to US$6.26 billion and services amounting to US$651 million, as part of its efforts to boost export performance.