Zimbabwe’s monthly trade deficit recorded a 51 percent drop to US$96,8 million in January from US$197 million in December 2024, despite exports registering a decline.
Latest statistics from the Zimbabwe National Statistics Agency (ZimStat), show that Zimbabwe’s trade deficit narrowed even though January exports fell by 5,8 percent to US$652 million.
The contraction in the trade deficit benefited from a wider drop in imports, which retreated by 15,8 percent, from US$889,7 million in December last year to US$748,8 million in January.
Among the country’s top export products was semi-manufactured gold, which accounted for 44,7 percent of shipments, followed by tobacco at 18,2 percent) and nickel mattes (9,3 percent).
Major export destinations included the United Arab Emirates (45 percent), South Africa (21,5 percent), and China (15,3 percent), which collectively absorbed over 80 percent of the country’s exports.
On the import side, mineral fuels and oils made up 19,4 percent of total imports, followed by machinery and mechanical appliances 12,2 percent, cereals (12,1 percent), and vehicles (8,1 percent).
South Africa remained Zimbabwe’s largest source of imports, accounting for 38,2 percent of the total bill, followed by China 16,7 percent, the Bahamas 10,8 percent, and Mozambique 4,3 percent.
Despite the trade deficit, economists remain optimistic about Zimbabwe’s trade prospects.
Economic analyst Namatai Maeresera views the narrowing trade deficit as an encouraging sign.
“The reduction in the deficit indicates a slowdown in import dependence, which could be a result of increased local production. This is a step in the right direction, as import substitution plays a crucial role in stabilising the economy,” he noted.
Dr Prosper Chitambara, an economist with the Labour and Economic Development Research Institute of Zimbabwe, highlighted the importance of value addition to sustain export growth.
“The country’s reliance on raw commodity exports exposes it to price fluctuations in global markets. Encouraging more local processing and manufacturing of our minerals and agricultural products will enhance export value and create jobs,” he said.
Gladys Shumbambiri-Mutsopotsi, another respected economist, echoed similar sentiments, emphasising the role of trade policy in driving sustainable economic growth.
“Zimbabwe must continue strengthening trade agreements and diversifying its markets to reduce dependency on a few key trading partners. Expanding trade with regional and global partners will enhance economic resilience,” she advised.
The latest trade data underscores the need for strategic economic policies to bolster trade performance, which ZimTrade has been doing in Africa and beyond.
The national trade promotion and development body is spearheading the country’s participation at Expo 2025 Osaka, which starts next month, as the country seeks to break new frontiers of trade.
Experts recommend prioritising infrastructure development, addressing logistical bottlenecks, and enhancing trade facilitation measures. Zimbabwe’s ongoing efforts to improve the ease of doing business and attract foreign direct investment (FDI) will be critical in ensuring sustained trade growth.
The Government’s focus on industrialisation and export diversification is expected to yield positive results.
While challenges persist, the positive trajectory in January’s trade figures signals a potential shift towards a more sustainable trade balance.
As the country navigates the complexities of the global economy, leveraging its rich natural resources and fostering innovation in key industries will also be instrumental in shaping a prosperous economic future.
“Zimbabwe has potential to transform its trade landscape by leveraging its strengths and adopting a forward-looking economic strategy. The key lies in sustainable policies that enhance competitiveness and promote industrial growth,” said Dr Chitambara. – Herald Online
