Foreign Affairs and International Trade deputy minister David Musabayana says his ministry is working on the National Trade and Export Policies whose promulgation will depend on cabinet and parliament.
The call for these policies comes as the national statistics agency, Zimstat, last week reported a trade deficit that narrowed by 81% to US$474 million between February and December last year compared to the same period in 2018. However, the decline in the deficit is largely due to shortages of foreign currency that has greatly reduced imports rather than a growth in exports.
“We have a trade policy that is in place. In terms of the dates of release, I think that will depend on the process with cabinet or parliament. Remember when a policy is pronounced there is some consultation that happens and some procedures that have to take place and now I cannot give a date or specific dates as to the consummation of those processes,” Musabayana told Standardbusiness in an interview last week.
“The goal of these policies is to improve on the ease of doing business, the investment climate, so that investors are safe with the protection of investments and also property rights to ensure that we have proper property rights and that we safeguard property rights.”
According to the Zimstat, the country imported goods and services worth US$4,45 billion against exports of US$3,98 billion between February and December last year.
In 2018, over the comparative period, imports stood at
US$6,5 billion and exports at US$4,04 billion, giving a trade deficit of US$2,46 billion.
Between 2013 and 2018, the annual trade deficit ranged from US$2 billion to US$3 billion.
Both the National Trade and Export Policies could increase imports that are being weighed down by a shortage of foreign currency to bring in critical raw materials and a devaluing local currency that remains the sole legal tender.
Improved imports could result in increased exports which remain Zimbabwe’s largest source of foreign currency and as such could stabilise the devaluing Zimbabwe dollar (ZWL).
At the Reserve Bank of Zimbabwe’s Monetary Policy Committee (MPC) meeting on January 17, 2020, the committee recognised the need to gradually build up gold and foreign currency reserves to boost confidence in the domestic currency.
The MPC also noted how this would also strengthen investor sentiment.
However, one impediment to Zimbabwe building its trade is the increased negative perception the country has around its political and economic climate.
But, Musabayana said the climate was good and blamed the local market perception for the negative image of Zimbabwe.
“As a ministry, we are working on an information strategy that ensures that there is proper communication…Our focus is on an information strategy where we are saying we need, as a country, to be proactive in terms of informing the public and the international markets, and communities, as to the correct happenings around the country,” he said.
“In terms of economic progress, we are looking at matters around the ease of doing business that has been brought forward. One, the launch of the Zimbabwe Investment and Development Agency (Zida) means there is going to be a one-stop shop where a foreigner who is coming to do business in this country sees everything housed in one building. That is important for the ease of doing business.” – The Standard