ZIMBABWE’S trade deficit — an outflow of domestic currency to foreign markets — narrowed by 42% to US$76,4 million between January and February this year compared to the same period last year mainly due to shortages of foreign currency for imports.
BY MTHANDAZO NYONI
Figures released by the Zimbabwe National Statistics Agency (ZimStat) show that during the first two months of the year, the country imported goods and services worth US$838,9 million against exports of US$762,5 million.
On prior year, imports stood at US$774,9 million against exports of US$642,2 million, giving a trade deficit of US$132,7 million.
In the period under review, imports were dominated by commodities that could be produced locally which include bottled water, vegetables, fruits, wheat, maize and maheu, among others.
The country also imported fuel and electricity worth US$171 million and US$30 million, respectively.
Exports were dominated by commodities such as minerals and tobacco, something which is very dangerous, especially at a time the world is facing the COVID-19 pandemic.
Commenting on the figures, economic analyst Persistence Gwanyanya said narrowing on trade deficit of late “has been more reflective of the challenges to import on the backdrop of forex challenges. Zimbabweans are finding it very difficult to import, forcing the country to rebalance. This will put more pressure on rebalancing imperatives”.
“Normally, during the first quarter the country usually experiences depressed exports due to the effects of rainfall, especially on gold. We seriously need to reindustrialise as a country,” he said.
“We are a country which is heavily dependent on commodities and now with COVID-19 affecting many economies, we are going to be heavily affected going forward. We need to diversify our exports revenue while at the same time reducing the outflow of forex in respect of imports.”
In his 2020 national budget, Finance minister Mthuli Ncube had indicated that going into 2020, recovering exports, stable secondary income flows and positive expenditure switching effects of the liberalised foreign exchange regime were envisaged to further narrow the current account deficit to US$85,7 million from US$110,2 million recorded last year.