Zimbabwe annual trade deficit down
By Tichaona Kurewa
HARARE- ZIMBABWE’S trade deficit for 2016 dropped slightly to US$2.83 billion from US$3.29 billion in 2015 due to various protectionist measures put in place by government to promote local industry and consumption of local products.
Measures put in place by government to promote local industry in 2016 include pre-shipment inspections through Bureau Veritas to check on the quality of imported goods to reduce importation of harmful and substandard substances, improving the collection of customs duty and the import priority list to aid the utiliSation of foreign currency introduced by the Reserve Bank of Zimbabwe.
The central bank list is more inclined to the importation of raw materials, capital goods and fuel than the importation of finished goods. The other measure was the Statutory Instrument 64 of 2016 introduced by the Ministry of Industry and Commerce to restrict the importation of some products, especially those locally available.
Statistics released by ZimStat show that in 2016 trade deficit stood at US$2.83 billion against US$5.21 billion imports whereas in 2015 annual trade deficit ended at US$3.29 billion compared to US$2.7 billion worth of exports against US$6 billion imports.
Commenting on this development, an economist said the slump in trade deficit has much to do with import restrictions introduced by government in terms of Statutory Instrument 164.“This meant that the country, through it exported less than the previous year and managed to scale down on imports which worked in the economy’s favour.
“It is critical that going forward government continues to restrict importation of finished goods that can be produced locally as well as ensuring that the available foreign currency channelled to productive sectors of the economy,” said the economist.
Industry, the economist said, can only strive to improve productivity and ensure that it continues to produce and gradually do away with the need for imports.Among the imported products in 2016 are lubricants amounting to US$1.3 billion, passenger motor vehicles over US$110 million and capital goods worth more than US$780 million.
Figures released by the agency also show that for December 2016 alone, the trade deficit widened sharply to US$197 million from US$14.6 million in November 2016, as exports tumbled.
Exports for the same month decreased from November 2016’s record high of US$460.7 million to US$292 million.
On the other hand, imports increased relatively from US$475 million in November to US$489 million in December 2016 mainly due to the hype associated with the festive season.