The Zimbabwe Congress of Trade Union (ZCTU) has said a huge trade deficit remains the major setback to industrial growth, employment creation, and infrastructural development in the country.
BY OUR CORRESPONDENT
ZCTU regional chairperson for Midlands Martin Tazvivinga said an influx of imported merchandise was the major driver to the economic decline and subsequent closure of industries particularly in the province.
Tazvivinga told NewsDay in an interview yesterday that Chinese companies trading in the Midlands capital were allegedly siphoning resources at the expense of the country.
“The country currently has a huge trade deficit and that is bad for economic growth. The problem is that we are not improving our manufacturing industry; we have to invest a lot in the manufacturing industry and promote our own local industries,” he said.
“The Chinese companies that we have in Gweru and surrounding areas are doing little to save the economy as they are always in court answering cases of violating labour laws. Bata and Anchor Yeast are the only companies left in Gweru; Zim Alloys, Zimcast and Radar Cast are as good as dead.”
Finance minister Patrick Chinamasa last year stated that total imports for the first 10 months of 2014 stood at $5,3 billion while exports only amounted to $2,4 billion.
Merchandise imports, excluding fuel, electricity, and services, account for approximately 60 % of the country’s import bill.
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“When imports become more than exports they have a tendency to drain the liquidity of the situation…it is acceptable to have such a deficit if you are importing machinery because that will be productive, that kind of deficit can soon be covered,” economist and businessman, Timothy Mukhalera said.
“What is happening here in Zimbabwe (in terms of imports) is what we call dumping; countries are subsidising their businesspeople resulting in foreign goods having ‘fake’ low prices which then hike our importation bill. The prices being charged by foreign companies are not realistic, they are not true.”
Exports are projected to increase by 5 % to $3.832 billion this year, growth driven mainly by flue-cured tobacco (3,4%), raw sugar (4,7%), gold (4%) and ferrochrome (1,4%).
Merchandise imports are however projected to increase by 1,9% to $6,651 billion mainly due to the continued depreciation of the South African rand against the US dollar.
