THE central bank’s analysis of May 2023 trade data released this week exposed factors behind tepid growth in exports.
Subdued exports are denying the economy crucial foreign currency inflows during a period when economic turbulences demand that Zimbabwe takes steps to lift exports.
The data also exposes how deception has ruined this economy.
In his tour of the country to drum up support for his election bid, President Emmerson Mnangagwa has told his supporters that the economy is booming. His gullible supporters agree, even as they struggle under a vexing exchange rate and currency crisis, which means little or no food on the table for many families.
The RBZ’s data gave graphic illustrations of a country still in the grip of crises, overwhelmed by imports. In May, the result was a trade deficit, which simply means Zimbabwe paid more for foreign goods and services than it generated through international trade.
Exports during the period, at US$654,2 million trailed imports by about US$200 million. The country continues to navigate through a precarious economic situation, which now requires authorities to swing away from tradition and embrace new ways of bolstering forex spinning exports.
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Trade deficits have never built economies, as vital foreign currency resources required to fund public spending are wiped out.
Now, if trade deficits are combined with mindless plunder by Zimbabwe’s high rolling top brass, a clear picture of how the economy is careering down the swamps emerges. It is no wonder Zimbabwe today grapples with shocks spanning from a volatile currency to protracted shortages of everything, including food and medicine.
This terrible position demonstrates what happens when authorities choose to embrace the bad boy tag that Zimbabwe is now associated with, instead of pulling in one direction with other economies to benefit from technology transfer.
By so doing, Zimbabwe will tap into a wide range of opportunities sprouting out as advances in technology and ideas flourish.
Apart from rolling out incentives to bolster exports, countries are expanding into the exportation of services like labour, technology, insurance and banking.
This is where efforts must be devoted, instead of sticking to outdated tradition. Africa’s heads of state including Mnangagwa, agree that this is a severely unattainable position.
But they are under the false impression that continuing to exploit resources before shipping them out for a song still works.
Yet vulnerabilities associated with global commodity price cycles present dangers for economies resisting to embrace shifting patterns, including Zimbabwe, which talks more about change but acts less.
India, a global economic power, realised early that it can leverage on its technology boom to lift exports and bolster gross domestic product. Australia made a strategic decision to drum up foreign currency inflows through its cutting age education system with extraordinary success.
Other countries have been exporting labour.
Zimbabwe should have benefited on the labour exportation front.
But its estimated three million diaspora population has been reluctant to invest back to a country where authorities see it as an agent for propagating western hegemony.