The Sunday News
Noble Ncube, Business Reporter
THE country has failed to meet its projected exports target of $3,4 billion for 2015, as the trade deficit continued to widen closing the year at $3,3 billion, latest official data shows.
According to data released by the Zimbabwe National Statistics Agency (Zimstat) for 2015, the annual exports were at $2,7 billion against imports of $6 billion.
The country’s balance of trade has remained in negative territory in the last few years fuelled by economic decline that has hit on productivity while promoting imports.
In 2014, the country also recorded a trade deficit of $3,3 billion with the Reserve Bank of Zimbabwe citing in part the retreat in international commodity prices, lack of competitiveness as having hit on the country’s trade balance.
Zimstat latest data revealed that, maize, rice, wheat, crude oil and cane topped the list of imports while exports included tobacco, minerals, cotton, wood products and cigarettes.
Zimstat said major contributors of the January import bill were food, fuel, medicines, clothing, building material, motor vehicles and motor vehicle parts, capital goods and fertiliser. Consumer Council of Zimbabwe (CCZ) Matabeleland manager Mr Comfort Muchekeza said there was an urgent need for local manufacturers to come up with competitive products.
He said the market was flooded with high quality products from various countries, as a result traditional buyers were being exposed to variety of products and ignore those of low quality.
“We should have competitive products to export at competitive markets. Our products are low quality as compared to other international products. We are losing our long time buyers to other countries. Currently we are only achieving in exporting labour.
“If we continue to import more than we export we will face harsh consequences, especially our economy. We need a paradigm shift on certain policies. Some laws are an impediment to local exporters. Administratively, Government offices should be centralised,” he said.
Mr Muchekeza said there was no reason for a business individual to travel from their basis to Harare for a simple operational licence. He said for manufacturers to produce quality products there has to be affordable lines of credit and the country needed to work on that because it needs financial assistance that will be guarded by honesty and good ethics.
Lack of export competitiveness combined with other factors such as limited access to affordable lines of credit hit on the economy’s ability to boost its performance as runaway imports continued to milk the economy of funds necessary to build foreign currency reserve buffers.
Zimbabwe National Chamber of Commerce (ZNCC) economic analyst Mr Ziphozethu Dube said the widening trade deficit was prompted by traders who promote foreign products. He said there was a need for reforms in the country’s import and export policies.
“We have people who are promoting imported goods than our own locally produced goods. As a result this affects our economy because more people will cross borders to buy in bulk from those particular countries, then they come back to sell at high prices profitable to them. In that regard the country loses a lot of foreign currency to those countries as we do not have foreign currency reserves.
“There is a need for strong and bold reforms in our regulatory and policy frameworks. If we continue like this, it promises a bleak future because the global market is also not doing well. There is a continuous trend of prices of goods falling in the global market,” he said.
Mr Dube said the trade deficit was going to widen this year because of the country’s malfunctioned manufacturing industry.
He added that there was a need for huge funding for agriculture, mining and manufacturing sectors so that they can be able to produce high quality goods that will beat foreign competition.
Another reason which might contribute to widening the export gap, Mr Dube said, was the strengthening of the US dollar against other currencies of countries Zimbabwe trades with.
Data indicates that the yellow metal dominated the country’s exports, overtaking tobacco which is traditionally the country’s biggest export earner after tobacco output last year declined.
Finance Minister Chinamasa predicted that Zimbabwe’s biggest export source, the mining sector was going to register a 2,4 percent growth this year sustained by increased output in gold production likely to boost mineral export earnings. According to Minister Chinamasa, this year’s overall gold production from all producers is projected at 20,1 tonnes, up from last year’s anticipated 18,7 tonnes notwithstanding softening of gold bullion prices.
The country has over the years seen a decline in the manufacturing sector with capacity utilisation declining from 57,2 percent in 2011 to 36,3 percent last year, with most industries shutting down resulting in rising unemployment and a significant increase on the import bill.
The continued depreciation of the rand against the US dollar has undermined the competitiveness of exports.
Zimbabwe has splashed over $18 billion in the past five years on cheap imported products, as imports continue to far outweigh exports.
