Zim tade deficit narrows by record $818m

HARARE - Zimbabwe's trade deficit has narrowed by a record $818 million in the 11 months to November 2016, the largest contraction since the introduction of a multiple currency system seven years ago.

Figures released yesterday by the national statistics agency revealed that the country exported goods valued at $2,537 billion against imports of $4,719 billion resulting in a trade variance of $2,187 billion in the period under review.

Economic experts said although the country’s trade deficit remains huge, it compares favourably with a $3 billion deficit recorded in the same period in 2015.

Finance minister Patrick Chinamasa said there was need for more government interventions to stimulate exports as a way of reducing the country’s “unsustainable” high import bill.

“Under the prevailing multi-currency arrangement, export receipts represent the economy’s anchor source of the economy and banking sector cash and liquidity,” he said in the 2017 Budget statement.

This was after official government statistics forecast overall export performance to fall by 6,9 percent to $3,365 billion in 2016 from $3,614 billion last year.

Chinamasa said the reversal of the worrisome decline in exports requires intervention measures to restore competitiveness and diversification of the economy’s export base across all sectors, including remittances of non-residents.

“The prioritisation of essential imports through implementation of such temporary imports prioritisation instruments as SI 64 in favour of promoting the importation of such critical imports as raw materials and replacement equipment is, therefore, central to the Zimbabwean economy contributing positively to regional economic performance,” he added.

In June this year, the government imposed an imports ban through Statutory Instrument 64 of 2016 (SI64), on a number of basic goods, the majority of which pass through via South Africa.

Some of the products on the banned list include bottled water, cereals, salad cream, baked beans, potato crisps, peanut butter, jams, canned fruits, dairy products ( salad cream, coffee creamers, yogurts), cigarettes, clothing, cooking oil, coffee creamers, pizza base, yogurts, mayonnaise, petroleum jellies, toothpaste, detergents and body creams.

At the time, industry officials warned that the ban would fuel smuggling.

However, Buy Zimbabwe feels that the imports ban created opportunities for the local manufacturing industries to boost their production capacity.

“Statistics from Zimstats show that over 40 percent of imports into Zimbabwe are mainly consumer goods which are not productive in nature,” the pressure group said.

“The introduction of the SI64 has created opportunities which manufactures and retailers need to take advantage of in order to restore the traditional economic system, where commerce acts to support the industry in a system of interrelated and interdependent elements as partners in business,” Buy Zimbabwe added.

Market watchers, however, said the imports ban was President Robert Mugabe’s desperate attempt to alleviate the economic crisis in the country, which imports not less than 75 percent of all its industrial, manufacturing, agricultural and food requirements.

Most Zimbabweans earn a living from the informal sector, as the country battles with unemployment rates higher than 80 percent.

Comments (1)

So, the trade deficit all of a sudden narrows by $818 million in the last eleven months - ZanuPF is spewing so much propaganda these days to try and appease the major lenders of finance to bankrupt countries. This is all lies, lies and more lies. Do we really export $2,5 billion worth of goods from this country? What goods are these? Why don't they tell us what is being exported and its worth. They can't - because it is all bullshit. ZanuPf think that the people of this country will believe anything they say; they think we are stupid, but infact they ZanuPf, are the stupid ones. They are totally unable to fix or mend this broken economy and country. Their brains are totally devoid of any ideas.

Homo Erectus - 27 December 2016

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