Trade deficit hits $1,7 billion

ZIMBABWE’s cumulative trade deficit for January to July this year has reached $1,7 billion, data from the central bank and the Zimbabwe National Statistics Agency (ZimStat) shows.
This represents a worsening of the situation as the trade gap for the full year 2017 was $1,74 billion.
Data released by ZimStat in August, which did not include figures for January, showed a trade gap of $1,48 billion for February to July. However, data published by the Reserve Bank in its monthly economic review for June showed that the country imported goods and services worth $490 million in January, against exports of $251 million. This puts the cumulative total deficit for January to July at $1,71 billion.
The trade gap has widened by 37 percent, compared to a deficit of $1,25 billion accrued during the same period last year.
With the cumulative deficit for the first seven months of the year almost equalling the trade gap accrued during the full year in 2017, it is expected that the shortfall for 2018 will be significantly higher.
This comes as pressure on the country’s economic growth is also expected to persist.
“We are forecasting real GDP growth of just 1,9 percent in 2018 as the economy continues to struggle amid tight hard currency liquidity while the crucial agriculture sector, which is the country’s major employer, will be negatively affected by a poor maize crop after late rains,” BMI, a Fitch group research arm, said in a report on Zimbabwe recently.
The widening of the trade deficit has been despite efforts by government to encourage exports. In a bid to encourage companies to export, the government, through the central bank, has over the past two years introduced various export incentive schemes.
ZimTrade, the country’s export promotion body, has cited export permits requirements as one of the major impediments for export business, apart from the prevailing economic conditions which have crippled industry.
Government has however exhibited considerable intent to improve the ease of doing business within the country.
“Internally, we will speed up the efforts to improve the ease and cost of doing business and economic competiveness,” President Emmerson Mnangagwa promised the nation in his inauguration speech recently.
In July, the country incurred a trade deficit of $219 million after importing goods and services worth $560 million, against exports $340 million.
Between February and July, Zimbabwe imported goods worth $1,44 billion from South Africa, the country’s largest trading partner, against $917 million exports.
Energy in the form of petrol, diesel and electricity, were the country’s major imports while minerals and tobacco were the major exports. The diesel import bill was $523 million, the petrol bill came in at $268 million while the electric bill was $108 million.
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