HARARE – Zimbabwe’s imports for the first five months of 2019 declined 31 percent to US$1,5 billion from US$2,2 billion registered over the same period last year, according to figures provided by Reserve Bank of Zimbabwe (RBZ) deputy governor Dr Kupukile Mlambo.
Exports have however remained stagnant at US$1,2 billion from the prior comparable period.
During the period under review the country’s trade deficit narrowed 299 percent from US$1 billion in the first five months of 2018 to US$300 million this year.
Trade deficit refers to the amount by which the cost of a country’s imports exceeds the value of its exports.
Simply put, a trade deficit implies that a country is losing most of its currency to its trading partners.
Dr Mlambo told industrialists recently that the country`s imports had significantly lowered compared to the same period last year.
“For the balance of payment statistics for the first five months of this year we have exported goods worth US$1,2 billion and we have imported goods worth US$1,5 billion so our deficit is worth around US$285 million.
“When you look at that amount its much lower than we had last year during the same period, but when you add that and you look at what we call non-proofing (households) institutions they imported from their own retentions goods worth US$235 million so again am puzzled with these kinds of monies that are available why is this market not working so clearly,” said Dr Mlambo
Zimbabwe has been experiencing trade deficits due to a decline in exports, usually unprocessed items such as tobacco and minerals, and a ballooning import bill, mainly for consumptive goods. The country is a net importer of fuel and capital goods.
The firming United States dollar has also made Zimbabwe’s products more expensive and exports to the region uncompetitive.
Analysts say the trade deficit experienced last year shows the economy has less competitive exports relative to the region partly as a result of operating with a firm US dollar.
However, the Government is battling to rebuild the economy by – among others things – improving the domestic investment climate, supporting key production sectors and reintegrating Zimbabwe into the global community.
With the economy structurally dislocated and production subdued in many sectors, a narrower trade deficit coming on the back of expanding exports and falling imports will always help breathe new life in the economy.