Trade deficit spikes
ZIMBABWE recorded a trade deficit of US$17,7 million in January this year attributable to the adverse impact of Covid-19 compared to a surplus of US$1,4 million recorded during the same month in 2020.
According to latest trade figures released by the Zimbabwe National Statistics Agency (Zimstat), the value of the country’s exports in January 2021 were US$28 289 769 against imports valued US$46 031 494.
In January 2020, Zimbabwe’s exports stood at US$39 772 535 while goods worth US$38 367 580 were imported. The spike in the trade deficit, economic commentator Mr Peter Mhaka said, is linked to the negative effects of the Covid-19 lockdown measures.
“The country should not be taken aback by the negative trade balance recorded in January. The trade figures given by Zimstat are only confirmatory of the negative repercussions the Covid-19 gives to the economy due to the national lockdown,” he said.
“As the country went on lockdown, this meant that the operations of companies were somehow constrained despite some of them being classified under the essential service category to allow them to operate.
“And as borders closed, some companies were producing limited quantities only to meet local demand.”
Of late, Zimbabwe’s balance of payments position has been strengthening, after surging 4,25 percent last year compared to 2019 on account of strong growth in exports.
Until the coming in of the Second Republic, Zimbabwe had been accustomed to perennial negative balance of payments positions, with imports far outstripping exports.
A positive balance of payments means that more money enters a country than it leaves, while a negative balance of payments indicates the contrary.
The 2021 monetary policy statement indicates that exports rose 5,8 percent to US$4,9 billion in 2020.
This was largely driven by platinum group metals, which registered significant growth in palladium and rhodium prices. This was, however, partially offset by price fall in gold, tobacco, chrome and manufactured goods.
On the other hand, imports increased 5,1 percent during the same period to US$4,7 billion, from US$4,5 billion in 2019, despite sharp declines in electricity, fuel, raw materials, machinery, manufactured goods and vehicles.
“This was mainly due to the impact of Covid-19 restrictions domestically and externally. Food imports, however, increased by 204 percent, from US$194,3 million in 2019 to US$591 million in 2020,” RBZ Governor Dr John Mangudya said in the monetary policy statement.
The increase in food imports was mainly accounted for by rice, maize and wheat. The country expects to record a maize harvest of 2,8 million tonnes this season and significant output of other crops such as soya bean, cotton and traditional grains.
This is expected to save Zimbabwe more than US$200 million, which could be channelled to support ongoing projects to modernise the country’s infrastructure, improve standards of living and create employment. —-chronicle.cl.zw
