Zimbabwe’s trade deficit narrows

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Zimbabwe recorded a sharp decline in trade deficit in January this year after exports surged modestly compared to the prior month, December 2021, official statistics show.

In January 2022 Zimbabwe exported goods worth US$5439 million, 8 percent less than in December 2021. However, imports followed the down trend, falling by 18 percent to US$632 million. 

As a result, the country’s trade deficit sharply decreased to US$88,10 million in January from US$179,90 million in December.

Analysts have since called for a more serious approach towards mineral beneficiation in order for the country to further narrow its trade deficit by exporting more valuable minerals.

Beneficiation and value addition of minerals before exporting is one of the key pillars of accelerating economic development. Already, minerals are Zimbabwe’s largest foreign currency earner.

The Government through the National Export Strategy for Zimbabwe has identified export led growth as one of its key deliverables to be achieved through diversifying exports.

According data from the Zimbabwe National Statistics Agency (ZimStat), Zimbabwe’s main exports were semi manufactured gold at 34,6 percent, nickel mattes including platinum group of minerals (PGMs) at 14 percent, nickel ores and concentrates at 10,7 percent.

Tobacco, whose selling season commenced on March 31, 2022 contributed 21,6 percent, while ferro-chromium chipped in with 5,2 percent, platinum unwrought or in powder form 2,3 percent and cotton 1,6 percent.

Players in the tobacco industry are currently calling for the localisation of financing tobacco production in order for the country to realise significant more from the export of the crop.

“It was noted that major minerals produced in the country such as nickel concentrates and nickel mattes were exported in a semi processed form, while nickel ores (including PGMs) are exported in a raw form,” Zimstat said.

During the month under review, Zimbabwe exported 3 310 kilogrammes of semi manufactured gold valued at US$188,3 million, compared to 4 417 kilogramme worth US$248,1 million in December 2021.

In the same month, the country exported 20,6 million kg of tobacco valued at US$117,3 million compared to 10,9 million kilograms valued at US$58,2 million in December 2021.

“Zimbabwe also exported 862 360 kilogrammes of nickel mattes valued at US$76 million in January 2022 compared to 1,2 million kilogrammes valued at US$107,9 million in December, 2021,” the Zimstat data shows.

Zimbabwe’s major imports for the period were mineral fuels and mineral oil products which stood at 15,1 percent in January 2022, compared to 21,5 percent in December 2021.

This was followed by machinery and equipment at 10,2 percent in January 2022. According to the weekly RBZ foreign currency auction, machinery and equipment get a significant share of the allocation.

According to the data, other imports in January 2022 included fertilizer at 11,8 percent, pharmaceuticals 8.9 percent, vehicles 7,8 percent, electrical machinery and equipment 5.1 percent, plastics 4,5 percent, animal and vegetable fats and oils 3,8 percent and cereals 2,4 percent.

“Notably, major imports in Zimbabwe were aggregated to reach 92,8 percent in January 2022. Cereal imports including maize decreased to 2.4 percent in January 2022 from 3,1 percent in December 2021,” the data shows.

Rice, which makes the bulk of cereal imports constituted 1,9 percent in January 2022 compared to 2,7 percent in December, 2021.

Traditionally, South Africa is Zimbabwe’s major trading partner. However, in January 2022, exports to the United Arab Emirates constituted 36,4 percent compared to 42,2 percent in December 2021.

Exports to South Africa accounted for 30,5 percent of shipments in January 2022 compared to 38,1 percent in December, 2021.

The value of exports to China increased to 12,9 percent in January 2022, from 3,6 percent in December 2021 and exports to Mozambique constituted 8,5 percent in January 2022 compared to 6,5 percent in December 2021.

The proportion of exports to Belgium was 2,3 percent in January 2022, compared to 2,9 percent in December, 2021 while imports from South Africa were 39,0 percent in January 2022, compared to 39,9 percent in December 2021.

“Furthermore, the proportion of the value of imports from Singapore decreased to 10,7 percent in January 2022, compared to 17,3 percent in December 2021.”

Imports from China increased to 15,9 percent in January 2022 from 12,3 percent in December 2021.

According to the ZimStat data, other imports in January 2022 came from Mozambique at 4,5 percent, Hong Kong 3,9 percent, Mauritius 3,6 percent, United Emirates 3,3 percent, India 2,6 percent, Zambia 2,1 percent, United Kingdom 1,7 percent and United States 0,4 percent. – Herald