Zimbabwe and South Africa trade gap narrows

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ZIMBABWE’S trade deficit for January was down by 82 percent compared to the same period last year after a sharp decline in imports from South Africa (SA).
Latest trade data from the Zimbabwe National Statistics Agency shows that the country’s trade gap in January was $44 million, representing a dramatic decline from gaps of $130 million in December 2018 and $238 million in January 2018.
This comes as Zimbabwe has registered successive monthly trade surpluses with SA since October.
The latest data shows that the country exported goods and services worth $292,6 million in January against imports of $336,8 million.
The improved position was on the back of a 32 percent decrease in imports, most of which represents the decrease in trade with SA.
The trade surplus with SA was $61 million after imports from the country declined to $94,8 million in January from $197 million in December 2018.
Zimbabwe’s trade deficit with SA had widened in 2018 after the former’s imports from the later grew by more than $1 billion.
Official statistics show that Zimbabwe imported goods and services worth $6,4 billion from SA during the 11 months to December, 2018 progressing from imports of $4,96 billion during the 11 months to November, 2017.
Figures for December, 2017 and January, 2018 have not been provided.
Exports had however shrunk by four percent during the same period from $2,18 billion in 2017 to $2,098 billion in 2018.
Consequently, the trade gap between the neighboring countries widened by 54,33 percent from $2,78 billion in 2017 to $4,29 billion in 2018.
SA has maintained a trade surplus with Zimbabwe since 2007 with the surplus widening over the years mainly due to Zimbabwe’s economic woes.
The trade gap between the two countries was expected to worsen after SA last year terminated a trade agreement which had been in place since 1964, opting for the Southern African Development Community Trade Protocol on trade, and after government’s suspension of Statutory Instrument 122 in October last year to increase the flow of basic goods into the market after panic and speculative buying had been had left some shops without stock.
“Coupled with the waiver was a sharp rise in the prices of goods on the local market amid shortages.
“The growing import pressures consequently pushed the country’s overall trade deficit in 2018 higher to $2,5 billion from $1,7 billion in 2017, a trend reversal from a five year narrowing position,” local advisory firm, Equity Axis said in a note recently.