ZIMBABWE’S exports are projected to close year 2019 at US$5 billion with imports seen at US$6,3 billion to give a current account deficit of US$238 million, the lowest so far in recent years, according to Treasury.
The country has been battling widening trade deficit in the last decade but is gradually shifting towards a balanced current account through adoption of import management measures and promotion of exports, guided by Government’s Transitional Stabilisation Programme (TSP).
Riding on the gains achieved so far, Government has emphasised the need to diversify the country’s exports and increasing beneficiation of primary commodities, which continue to dominate the export basket. Diversification and value addition are critical in increasing the value of exports and reducing risks from international price shocks that usually affect commodity-based economies.
“By December 2019, cumulative exports are expected to record US$5 billion, against imports of US$6.3 billion to give a current account deficit of US$238 million,” said the Ministry of Finance and Economic Development in its recent 2020 pre-budget strategy document.
“This reflects a major shift towards a balanced current account through export promotion supported by import management measures, which prioritise essential inputs and capital equipment as opposed to non-essential imports.
“In 2020, exports are projected at US$5.5 billion with imports growing to US$6.6 billion on account of higher imports of essential inputs and equipment, including electricity and fuel.”
According to the Zimbabwe National Statistics Agency (Zimstats), cumulative merchandise exports for 2019 up until July increased by 7.2 percent, from US$1.96 billion during the same period in 2018, to US$2.1 billion. This is despite a decrease in gold exports, and largely on account of nickel and tobacco.
At the same time, merchandise imports for the period under review sharply declined by 21 percent, from US$3.6 billion recorded in the comparable period in 2018, to US$2.8 billion in 2019.
“As a result, the trade balance on goods for the period under review improved by US$902 million, to a deficit of US$679 million in July 2019 compared to a deficit of US$1.58 billion recorded in the comparable period in 2018,” said Treasury.
Zimstats figures show that Zimbabwe largely exports raw mineral products and tobacco as top forex earners with minimal domestic beneficiation. The import basket is, however, dominated by finished products. Fuels, crude soya oil, wheat, motor vehicles, ammonium nitrate, medicines, chemical and electrical energy products top the list of imports.