October trade deficit down 37,5%

Published: 28 November 2018
THE country's month-on-month trade deficit for October declined by 37,5 percent to $144,3 million from $230,9 million in September, official figures from the Zimbabwe National Statistics Agency (Zimstat) show.

Data from the agency shows that during the period under review, Zimbabwe exported goods worth $449 million against imports that totalled $593,3 million.

In September, Zimbabwe's exports totalled $356,4 million against $587,3 million worth of imports showing an imbalance of $230,9 million. Commenting on Zimbabwe's trade figures for October, economic analysts pointed out that the trend shows that the country's exports were improving.

"If you look at the trend it's actually the exports that are increasing faster than imports. Exports in September were $356,4 million and increased to $449 million in October.

"This trend actually reflects more in respect of export performance than import performance, so as a country we did better in respect of exports during the period under review," said Mr Persistence Gwanyanya, adding that during the period under review exports grew more than imports.

Zimbabwe's exports during the period under review mainly comprised primary commodities such as semi-refined nickel mattes, jewellery, diamonds and platinum, gold, and flue-cured tobacco. Mr Gwanyanya said the growth in exports reflects the firming global prices of commodities coupled with improved production of the commodities.

"So, a smaller increase in imports reflects largely the effects of forex challenges despite SI 122 and some measures of control in respect of the selling of these products, you may want to know the Government has maintained an exchange rate par of 1:1.

"So, no matter what price you are going to buy imports at, you are expected to maintain that exchange rate as you sell the product, which is a discouraging factor because you are procuring something in US dollar terms and then asked to observe the exchange rate par of 1:1 as you sell these products," he said.

Another economic analyst Mr Peter Mhaka echoed similar sentiments adding that as businesses sell their products after importing using forex, they may not realise the value that they would need to restock.

"That could be the reason for the improvement in the trade balance from September to October," he said.

Zimbabwe's exports were expected to reach $5,2 billion largely attributed to the global financial and economic conditions that were improving ultimately giving rise to prices on the international commodities market.

Zimbabwe exports to different countries across the globe and also due to depressed productivity in the local manufacturing sector, the country also relies on importing key raw materials for its industry using the scarce foreign exchange in the economy.

In 2016, the RBZ introduced a five percent export incentive bonus scheme with a view to encouraging companies to export.

The facility, which is being disbursed through Agribank and Homelink, attracts interest rates of around 7,5 percent per annum. Government has noted exports as a major source of liquidity for overall economic activity.

- zimpapers
Tags: Trade,


Latest News

Latest Published Reports

Latest jobs