HomeBusinessVideo: Zim, US trade soars despite ‘sanctions’

Video: Zim, US trade soars despite ‘sanctions’

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Zimbabwe recorded a $16,9 million trade surplus with the US last year as trade between the two countries soared to over $100 million despite the existence of targeted sanctions.

BY NDAMU SANDU

This was the first time since 2008 that Zimbabwe had exported more than it imported against the US, a boon for the economy that is battling to generate more exports in the wake of a dwindling tax revenue base.

According to latest statistics, Zimbabwe exported goods worth $64,9 million. It imported goods worth $48,7 million, giving a trade surplus of $16,2 million.

In 2013, Zimbabwe had a trade deficit of $46,6 million with the US after importing more than exports.

Imports were $60,5 million against exports of $13,9 million.

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William Humnicky economic and commercial officer at the US embassy in Harare told NewsDay on Tuesday that latest data was testament to growing trade relations between the two countries, despite official claims of sanctions that had hamstrung the Zimbabwean economy.

Humnicky said the targeted sanctions imposed in 2003 cover 106 individuals and 69 Zimbabwean entities.

“The rest of Zimbabwe’s economy is open for business, that is why trade has maintained itself even during sanctions,” he said, adding that historical data showed trade between the two countries was not affected by the targeted measures.

Humnicky said Zimbabwe was a distant market for US companies and the trade taking place showed that there was demand for goods between the two countries.

He said Zimbabwe competes with other regional neighbours to do trade with the US and domestic policies would play a key role in stimulating trade.

He said US companies look at indices such as the World Bank Doing Business, Transparency International Corruption perception index and the Mo Ibrahim index for competitiveness of a market.

“Zimbabwe is ranked low on the indices and makes it more challenging for US companies to be attracted,” Humnicky said, adding that the indices provide a summary of the challenges faced in potential markets. He said a favourable score on the indices would be a good marketing tool for a country since there is so much competition with regional neighbours.

He said US companies have raised concern on policy inconsistencies and the absence of financing for locals which affects trade relations.

“US business people look for consistent and business-friendly policies. If it [policy] is consistent, they make long-term plans,” he said.

The US official said the indigenisation policy was also confusing for American companies as it had various interpretations.
Zimbabwe is part of the African Caribbean and Pacific countries that signed an Economic Partnership agreement with the European Union to open up the markets.

Humnicky said it would be good for American companies if Zimbabwe was part of regional or international trade agreements because there would be “some sort of standards”.

“Think of an American company coming to Africa. There are a lot of independent countries with different rules and regulations, so if a country adopts a standardised tariff regulation, it’s much easier…because they [American companies] know that it’s a Sadc or a Comesa agreement,” he said.

In 2013, Zimbabwe was United States’ 165th largest goods export market, buying products such as machinery and pharmaceuticals.
The country was United States’ 164th largest suppliers of goods such as iron and steel, tobacco and coffee, among others.

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