Omega Ukama 
ZIMBABWE recorded a trade surplus of US$218 million with South Africa (SA) in 2019 from a deficit of US$458 million during the 11 months to December 2018, official data shows.
The country’s first trade surplus with its major trading partner in over a decade, comes as a worsening foreign currency shortage and rising inflation have eroded purchasing power, leading to suppressed demand in the economy and a sharp decline in imports.
Data provided by the Zimbabwe National Statistics Agency (ZimStat) shows that Zimbabwe’s imports from SA declined to US$1,88 billion in 2019 from US$2,54 billion during the 11 months to December 2018. Data for January 2018 was not provided.
The country’s exports to SA were US$2,09 billion, from US$2,07 billion during the 11 months to December 2018.
In all, Zimbabwe’s imports during the 12 months to December 2019 were US$4,82 billion, from US$6,99 billion in 2018.
Exports declined marginally during the same period from US$4,29 billion to US$4,27 billion.
The country’s trade deficit shrunk to US$548 million from US$2,7 billion.
Aside from weakening demand and foreign currency shortages, Finance minister Mthuli Ncube says the decline in imports is a result of government’s efforts towards import substitution.
Business leaders and analysts, however, assert that the majority of imported goods are being smuggled into the country to avoid high taxes at the country’s borders.
Douglas Hoto, a local business leader and statistician, says Zimbabwe’s persistent trade deficit has been magnified by unstated foreign trade activity.
“Trade deficit says that you are importing things that cost more than your export earnings, the question is who is funding that difference?
“We can try to account for it by saying there is FDI, Diaspora remittances and so on but when you add these things together, there is still a gap, which speaks to a section of the economy that is not accounted for when we do our national accounts,” Hoto told a business conference recently.
“It simply means that the significant part of the economy is not in the equation and, or the exports are understated to the extent that they go out in the grey market and come back as imports in the formal market,” he added.
The southern African country has persistently run trade deficits since dollarisation in 2009, recording only a handful of monthly trade surpluses over the period.
Official data shows that the country’s cumulative trade shortfall since 2009 has breached $20 billion.
Subscribe to The Financial Gazette
This is premium content. Subscribe to read article.
