ZIMBABWE imported goods and services worth US$8,40 billion in the 11 months period to November 2023, up 6% compared to the same period in 2022, data from the Zimbabwe National Statistics Agency (ZimStat) showed this week.
Exports, on the other hand, stood at US$6,67 billion, up 12% on the prior period. This resulted in the country experiencing a trade deficit of US$1,73 billion, down 11% compared to the same period in 2022.
The southern African nation imports a wide range of products, including machinery and mechanical appliances, raw materials, food products, fuels, minerals, textiles and clothing, footwear, electricity, chemicals, metals and intermediate products, among others.
Exports were dominated by primary commodities, such as nickel ores and concentrates, nickel mattes, gold, tobacco, ferro-chromium, platinum and diamonds.
The ballooning of Zimbabwe’s import bill follows the government’s decision last year to allow the importation of basic commodities to improve their availability and halt price increases.
Economist Stevenson Dhlamini said the increase in imports reflects an increase in domestic demand for foreign goods and services. He said this could also be reflective of an increase in the purchases of goods and services from abroad by the consumers of the businesses in the country.
“It may be due to the global inflation that we have experienced in this previous year compared to the other years,” Dhlamini said.
On the exports growth, Dhlamini said, this could have been driven by the increases in the prices of commodities, especially gold, platinum and diamonds. He said the good performance of the tobacco industry also might have contributed to that.
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He said the reduction in the trade deficit suggests that Zimbabwe is relying less on borrowing and depleting its foreign exchange reserves to finance its imports.
“We are aware that our country has not been able to access credit from the multilateral lending institutions,” he said.
“Perhaps this also contributed to the decline in our trade deficit through the capital account. So it is also critical that we monitor the sustainability of this improvement in line with the dictates of National Development Strategy 1.
“We hope this will be sustained. So, the policy implication of these observed increases in imports and exports with a positive reduction in our trade deficit implies that we need to continue the increased import substitution strategies that the government has come up with and also promote increased value addition.”
He added: “We know that the government has been on a drive to improve the competitiveness of our exports, especially the lithium sector and the mining sector.
“We have witnessed a policy shift towards value addition instead of exporting raw minerals, perhaps that also contributes to the growth in our export values and a reduction in the budget deficit.”
In his 2024 national budget, Finance minister Mthuli Ncube projected that merchandise imports will increase by 4,9% to US$8,5 billion by the end of 2023.
Imports are projected to further increase to US$9 billion in 2024 on account of higher imports of grain, energy, raw materials and machinery.
The Treasury boss expected merchandise exports to rise by 4,3% to US$7,3 billion from US$7 billion in 2022, on account of higher tobacco, lithium and diamond exports.
In 2024, despite the softening of commodity prices of key minerals such as gold and PGMs, exports are projected to remain on the increase sustained by growth in output from lithium, coke and tobacco to US$7,7 billion.
Remittances are projected to continue driving the current account surplus and are projected to close the year 2023 at US$2,1 billion, before rising further to US$2,2 billion in 2024.
Ncube said the current account is expected to close the year 2023 in a surplus position of US$244,4 million, slightly lower compared to US$305 million registered in 2022.
This year, the current account surplus is projected to narrow to US$204,5 million, reflecting a wider trade deficit as imports accelerate at a faster pace than exports.
