Zimbabwe imports plummet

ZIMBABWE’S trade deficit has declined by almost 70 percent to $400 million in the five months to May 2019 compared to $1,34 billion recorded in the same period last year, latest data show.
Although official data provided by ZIMSTAT shows that there has been a considerable decline in imports during the period from $2,83 billion in 2018 to $1,96 billion, market experts assert that the majority of imported goods are being smuggled into the country to avoid high taxes at the borders.
Exports have however increased marginally to $1,56 billion from $1,48 billion.
This also comes as the economic situation in the southern African country has continued to deteriorate amid a worsening foreign currency shortage, while rising inflation has eroded purchasing power leading to suppressed demand in the economy.
Finance minister Mthuli Ncube, however, says the decline in imports has come as a result of government’s efforts towards import substitution.
“The TSP targeted higher import substitution for goods and services which can be produced domestically taking advantage of the country`s resources. In addition, government envisages curtailment of non-essential imports in view of foreign currency limitations,” Ncube told parliament recently.
“The reduction of the import bill reflects the impact of imports demand management measures under implementation, including fuel prices adjustment,” he said.
The Treasury boss said diesel, petrol, tractors, wheat, vehicles for transportation and crude soya bean oil were the country’s major imports during the months of January and February 2019. Zimstats has not provided the details for imports by product.
Ncube however still insists that there is need for the country to address the import bill.
“However, there is much more scope for managing the import bill targeting other non-essential imports,” he said.
In 2018, Zimbabwe’s trade deficit grew by close to a billion dollars from $1,77 billion in 2017 to $2,68 billion.
The southern African country has persistently run trade deficits since dollarisation in 2009, recording only a single monthly trade surplus over the period.
Official data shows that the country’s cumulative trade shortfall since 2009 has breached $20 billion.
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