Firming rand impacting on exports
Harare – Zimbabwe and Namibia are moaning over the strenghthening of the South African Rand against the US dollar which affects exports. In the case of Zimbabwe a stronger rand means a slower recovery of our economy. South Africa is Zimbabwe’s biggest trading partner and most of its imports come from South Africa. The South African Rand is trading at between R6,85 and R6,90 to the US dollar in both countries. The strengthening of the rand means it will be more expensive for Zimbabwean and Namibian companies to export. The goods turn out to be more expensive and uncompetitive on the international markets. Namibia’s major export is diamonds and in agricuclture it exports beef, grapes and dates. Namibia exports more than 90 percent of its beef and lamb mainly to South Africa and the European Union. it generates R1,7 billion annually from beef exports, which accounts for 5.7 percent of total export revenue and 3.4 percent of GDP. Head of First National Bank of Namibia – Agri, Oliver Horsthemke, told the New Era newspaper that predictions were that the rand’s value would remain strong for the next 12 to 18 months. In Zimbabwe, a firming rand spells bad news because the country imports its products from South Africa, particularly groceries. This means changing more US dollars for a few Rand to import the goods. A writer wrote in the daily Herald newspaper. “When I walked into a supermarket last week, I bought a 2-litre bottle of cooking for US$2,99. The next day the same product was going for US$3,19. That is how the strong Rand is affecting us.” “The Rand should revert to its original R10 to the US dollar and the impact on us will not be severe,” wrote the writer, Campion Wekwa Mereki.