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FRAGILITY of South Africa’s rand has not negatively impacted on Zimbabwe’s exports to its largest trading partner, a study by Zimbabwe Economic Policy Analysis and Research Unit has shown. Zeparu said in its third quarter Economic Barometer Volume 18 that while movement in the rand affects exports, the relationship between the currency Zimbabwe’s exports is very weak.

“The correlation co-efficient of the rand and total exports is -0,28 and with exports into South Africa only -0,33. While rand movement affects exports, the association is very week,” Zeparu said.

A correlation coefficient is a statistical measure of the degree to which changes to the value of one variable predict change to the value of another.

Correlation coefficients are expressed as values between +1 and -1. A coefficient of +1 indicates a perfect positive correlation. A change in the value of one variable will predict a change in the same direction in the second variable while the opposite is true for correlation coefficient of -1.

Zeparu said most of the products destined for South Africa are driven by market availability rather than exchange rate and continuous depreciation of the rand is a major problem only with regards to imports, “but has not significantly deterred exports” to that country.

Zimbabwe’s exports had fallen by 16,5 percent in the nine months to September while imports increased by about 9,5 percent amid fears the strengthening dollar would dampen exports to SA.

Zimbabwe’s exported competitiveness has declined by 42,9 percent to -2,6 percent due to the negative effect of high higher operational costs, high cost of regulation and uncoordinated licences.

Exports into South Africa constituted about 70 percent of Zimbabwe’s total exports between January and September 2015 while imports from SA accounted for 40 percent of the total exports. Primary commodities constituted 75 percent of total exports. — BH24