Zimbabwe records nearly US$1bn trade deficit

HARARE – Zimbabwe recorded nearly US$1 billion trade deficit in the eight months to August 2021 Zimbabwe after imported goods at US$4,74 billion, outstripped exports of US$3,75 billion during the period, recent trade data released by ZimStat show.

On a monthly basis August exports stood at US$597 million while imports for the same period came in at US$629 million, resulting in a trade deficit of US$31,9 million, 18 percent lower than the US$39 million deficit realised in July 2021.

Zimbabwe’s major imports in the eight months to August were petrol worth US$209 million, diesel US$191,9 million, maize US$110 million mainly. Electricity valued at US$110 million, rice US$17,5 million, and broken rice worth US$73 million were imported in the period under review.

Cumulatively, petrol, diesel, maize, electricity and rice accounted for 35 percent of Zimbabwe’s total imports in the eight months period, with many other small volumes of various items and services making up the balance.

The ravaging impact of Covid-19 and a weakening Zimbabwe dollar have all aided weak domestic demand for goods and services and a fall in both local and global economic activity.

Locally this can be seen by trends noticed in the import data with raw materials such as fertilized eggs, soya beans, and bottles which averaged over a million dollars a month but in the past two years averaged around US$750 000 a month.

Zimbabwe however still needs to work on its manufactured goods as they only accounted for 6,46 percent of goods exported up from 4,77 percent in the same period last year.

With a target of 30 percent of exports expected to be manufactured goods, the country needs to be more active on making the initiatives for local production to be increased despite increasing 1,91 percent month on month.

This has been as a result of better policies, including the swift response to Covid-19, that has caused companies to scale up production as well as improved availability of electricity and clean water, which has caused temporary relief for companies.

Zimbabwe has vast mineral resources which the country needs to convert to products in order to realize more value than being a price taker on the raw product.

Exports by country were dominated by South Africa which saw goods from Zimbabwe worth US$1,56 billion in the eight months to August.

The United Arab Emirates remains one of Zimbabwe export destinations with the country receiving goods worth US$985,5 million as Mozambique acquired goods worth US$334 million.

The three countries constituted 72 percent of our exports. The trend is likely to continue in the third quarter since most companies are now stocking for the Christmas and closed periods. 

This also rests on the possibility that a second wave of the pandemic does not lead to another round of economic shutdowns to our trading partners. South Africa dominated our imports with the country selling us goods worth US$2,1 billion in the first eight months of 2021.

Singapore, which is where Zimbabwe procure our fuel came in second with US$632 million.

The country saw a slow first half of the year in which Covid-19 hit and forced the country to resort to lockdowns in order to reduce the spread of the virus.

The country was unable to export or import unnecessary goods and services in the period.