Trade deficit widens

0
727

ZIMBABWE’s imports for the first quarter of the year stood at $1,57 billion compared to exports of $717 million, Buy Zimbabwe has said.

BY TATIRA ZWINOIRA

Buy Zimbabwe said the country’s widening import bill against exports was a major contributory factor towards the increasing trade deficit, warning if the trend was left unchecked, the economy would be crippled.

Speaking at a press briefing, Buy Zimbabwe questioned the government’s pursuit of what it called “suicidal” economic policies despite the current account deficit being 16% of the gross domestic product (GDP).

“We noticed early signs that the relationship between imports and exports was getting seriously unbalanced and if the trend continues where we import more than we export it will lead to an economic crisis,” said the executive director Munyaradzi Hwengwere.

“Any economy that continues to do that will get into a serious problem because you are basically eating more than you can replenish.”

Hwengwere said over the last two years there had been a greater realisation that imports were a problem, hence the creation of Buy Zimbabwe in 2011 to try to promote local products.

Buy Zimbabwe said for the period January to March, imports stood at $1,57 billion while exports stood at $717 million, a decline of 28% from the previous quarter. One factor that has led to lesser exports is instability in regional currencies due to the strengthening United States dollar. Lack of production and an almost non-existent manufacturing sector was forcing producers to import raw materials from outside the country.

“As a nation we must know what we are really good at, what our key drivers are in terms of consumer goods, food stuffs and the actual ingredients of production,” said Buy Zimbabwe chairperson of business affairs committee Oswell Binha.

He said the government should stop putting a price ceiling where productive levels were very low.

“The role of the government is merely to create an environment that enables producers to do what they do best,” Binha said.
“The government is not a business and once they start doing something which then impacts the way business is being done then there is a problem.

“You need to open up to encourage the farmer to go back to the land and that’s how you induce raw materials for production. We need to create an economic policy framework that says who produces what and at what primary level to create competitiveness.”
He said there were currently no incentives to export.

“The government must just give the key ingredients in enabling productivity and that is all with the exception of rationale regulations,” said Binha.

According to the Zimbabwe National Statistics Agency, South Africa accounts for 43% of imports into Zimbabwe, making it the country’s main trading partner.

Buy Zimbabwe is hosting a Buy Local summit from June 17 to 19 in Victoria Falls aimed at bringing together key business leaders, decision makers and government officials.