Zim’s trade deficit narrows

Zimbabwe’s trade deficit for the nine months to September 2023 narrowed to US$94,2 million, representing a 44,7 percent improvement compared to a deficit of US$170,3 million in August 2023.

According to data released by the Zimbabwe National Statistics Agency (ZimStat) yesterday, the value of exports for September 2023 was US$678,0 million, representing a 4,3 percent increase from US$649,8 million recorded in August 2023.

During the same period, the value of imports was US$772,2 million, reflecting a 5,8 percent decrease from US$820,1 million recorded in August 2023.

According to the ZimStat data, the main products exported were semi-manufactured gold, accounting for 29,6 percent of total exports, and other mineral substances at 17,4 percent.

Tobacco exports were also significant, contributing 15,9 percent, while nickel mattes and nickel ores and concentrates contributed 13,4 percent and 5,9 percent, respectively.

“The main products imported were mineral fuels and mineral oil products at 21,0 percent and machinery and mechanical appliances at 13,4 percent,” reads the ZimStat data.

Vehicles accounted for 8,2 percent of total imports, while iron and steel and articles of iron and steel were at 7.3 percent, and electricity and equipment at 5,7 percent.

Economist Dr Prosper Chitambara said there is a need to continue to promote the competitiveness of local industries and producers because, currently, there is a huge competitiveness gap whereby our cost structures are on the high side.

He said while productivity has improved, it is still below the country’s potential and optimal levels; hence, there is a need to continue to enhance the business environment.

“Incentivising local production and having stable macroeconomic stability will ensure we have a huge surplus in trade accounts and current accounts,” he said.

He noted that improving competitiveness through addressing binding constraints to do with infrastructure, taxes, and the cost of finance would improve the export competitiveness of the country’s goods and products.

In terms of exports by broader economic category, industrial supplies comprised 93,8 percent of the exports in September 2023, at US$635,6 million, compared to US$596,6 million in August.

Food and beverages accounted for 2,3 percent of total exports at US$15,9 million, while consumer goods contributed 2,1 percent at US$14,1 million.

During the month under review, industrial supplies accounted for the bulk of imports at 32,5 percent, amounting to US$251,1 million, while fuels and lubricants constituted 20,1 percent of the imports at US$155 million.

Capital goods imported were also significant at US$154 million, representing 20 percent of total imports.
The main export destinations were South Africa, accounting for 30 percent, the United Arab Emirates, at 26,7 percent, and China, at 23,3 percent.

In terms of imports, South Africa at 42,8 percent and China at 11,6 percent were the main source countries for the country’s imports during September 2023. Other major source markets were Hong Kong and the Bahamas, at 7,1 percent each.

Vince Musewe, an economist, said the country’s exports continue to be mainly raw materials, with very few manufactured products.

“This limits our ability to create local jobs and incomes. As banks limit lending in USD due to currency uncertainties, trade is going to suffer going forward,” he said.

The country’s export profile remains heavily reliant on raw minerals, with limited value addition.

The lack of value addition in the export of raw minerals means that Zimbabwe misses out on the potential economic benefits that come with processing and refining these resources domestically.-ebsunessweeklt