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‘Total exports to grow to $3,9bn by year-end’

Business
GOVERNMENT has projected that total exports will grow to $3,9 billion by year-end driven by a strong performance in tobacco, platinum group metals (PGMs), nickel and many others.

GOVERNMENT has projected that total exports will grow to $3,9 billion by year-end driven by a strong performance in tobacco, platinum group metals (PGMs), nickel and many others.

BY TARISAI MANDIZHA

Finance minister Patrick Chinamasa
Finance minister Patrick Chinamasa

In his 2016 annual budget review, and 2017 economic outlook presentation on Thursday, Finance minister Patrick Chinamasa said the current account deficit was benefiting from improved exports and declining imports which are estimated to have narrowed down to a deficit of $552 million, from $1,5 billion recorded in 2015.

“In 2017, total exports are projected to reach $3,9 billion, on account of strong performance in tobacco, PGMs and nickel, among others, while imports are expected to increase to $5,4 billion on account of a surge in the imports of intermediate goods required in the productive sectors,” he said.

“Further interventions to improve domestic production and value addition should see continued decline in the current account of the country’s balance of payments into 2018.”

In the period under review, total exports of goods increased to $3,7bn in 2016, from $3,6bn recorded in 2015, driven mainly by gold and tobacco exports.

Chinamasa said mineral exports grew by 6,4%, to reach $2,2bn from $2,1bn in 2015, largely reflecting strong performance in gold, which recorded $913,4m in 2016, on account of improvements in both production and international prices.

“Strong production performance, coupled with firming international prices, for the platinum group of metals, diamonds and nickel, are expected to push mineral exports to $2,3 billion in 2017,” he said.

Exports of the economy’s agriculture products in 2016 grew by 4,8% from $1bn in 2015 to $1,1bn.

In the period under review, improved performance in tobacco production accounted for $933m of total agriculture exports. In the previous year, tobacco had accounted for $855m in exports.

He, however, said sugar exports significantly declined from $108,9m in 2015 to $53m in 2016.

In 2017, agricultural exports are expected to increase by 6,7% to $1,16bn, led by tobacco and sugar.

Exports of finished manufactured goods were on the increase, recording $183m in 2016, from $175m of the previous year.

“These ranged from foodstuffs, furniture, building materials, chemicals, packaging materials, footwear, and plastics, among others,” Chinamasa said. “Challenges were, however, experienced with exports of such semi-processed products as ferro-alloys and cotton lint.”

During the period under review the overall impact on total manufactured exports is expected to register growth from $320m in 2016 to $363m by end of 2017.

Commenting on imports, Chinamasa said total imports dropped by 15%, from $6,1 billion in 2015 to $5,2bn in 2016, mainly due to ZimAsset intervention measures to stimulate domestic production and value addition, and that way increasing supply of domestically produced goods.

Meanwhile, imports are expected to increase to $5,4bn on account of a surge in the imports of intermediate goods required in the productive sectors.