Zimbabwe’s import bill has fallen for the fourth consecutive month due to a combination of austerity measures introduced by Government as well as limited availability of foreign currency.
According to the latest trade figures released by the Zimbabwe Statistics Office (Zimstats), the country’s import bill for the month of January at $336,8 million was 31,8 percent lower than the import bill of $494,7 billion for the previous month of December.
This is also the lowest import bill in approximately three years.
The importation of petrol and that of diesel were among those that declined. The petrol import bill at $36,4 million was at its lowest since February 2018 while that of diesel at $60,6 million was at its lowest since January 2017.
The importation of electrical energy at $2,8 million was not only lower than the December import bill, but was also a massive drop from a bill of $31 million in April 2018.
Wheat imports at $7,5 million (December 2018: $10,7 million) were also at their lowest since April 2018. Another massive drop was in the rice import bill at $1,2 million versus $9,7 million in December 2018. The importation of crude soya bean at a cost of $4,6 million was also significantly lower than $15 million in December 2018. Prior to this, the average import bill for soya bean was $9,3 million.
Analysts said there are various factors that could have led to the drop in the country’s import bill.
Walter Mandeya of Trigrams Investments, said the decrease in the import bill comes at a time the country has been experiencing serious foreign currency shortages.
“One of the things to consider is that there isn’t enough foreign currency to meet our import requirements. There are many companies out there that would have loved to import, but are constrained by the limited availability of US dollars
“Delta is a good example; they have had to priorities on certain products while starving the market of others. Most of their sparkling beverage products have disappeared from shelves and you will agree with me that’s not by design,” said Mandeya.
Measures put in place by monetary authorities could be another contributing factor.
Last year, the Government promulgated Statutory Instrument 252A of 2018, which provides for the payment of duty for selected goods, including luxury motor vehicles in forex to discourage usage of hard currency on luxury commodities.
This, analysts believe, could have been another contributing factor to the decline in the import bill, as importers struggle to put together enough foreign currency resources.
The country also experienced crippling fuel shortages in the month of January and the drop could be most likely associated to the none availability of foreign currency to import fuel while an element of reduced fuel demand cannot be entirely ruled out.
There has also been talk that demand has been subdued due to high prices of basic commodities beyond the reach of many. This has meant there is less need to import hence the drop in the import bill.
Finance and Economic Development Minister Mthuli Ncube’s 2019 National Budget is also anchored on austerity measures for prosperity.
The budget seeks to stabilise the economy and build a solid foundation for a prosperous economy in line with Vision 2030.
The budget’s target, is to deal with fiscal and current account deficits. The twin deficits have been major sources of overall economic vulnerabilities, including inflation, sharp rise in indebtedness, accumulation of arrears and foreign currency shortages.
The importation of vehicles for cabinet ministers and parliamentarians is one such restriction among others that could have seen the import bill drastically fall.
Disappointingly export earnings also registered a significant decline in January. At $292,5 million January export earnings were lower than what was achieved in December at $364,8 million. It was also the lowest outturn in eight months. This resulted in a trade deficit of $44,2 million in January but much lower than December trade deficit of $130 million according to Zimstat figures.