Zimbabwe recorded a $1,6 billion trade deficit in the first 10 months of the year as imports continue to outpace earnings from the country's exports. Figures released by the statistics agency show that the country's earnings from January to end of October fell short of the $3 billion mark settling at just over $2,9 billion.
Imports on the other hand totalled $4,47 billion, a figure that took the deficit to a staggering $1,56 billion. The deficit, which is highlighted in latest statistics released by the Zimbabwe National Statistics Agency (ZimStat), is however, 25 percent less than the $2 billion recorded in the same period last year after the country took delivery of imports worthy $4,2 billion against $2,2 billion earned from exports.
The decline in the first 10 months will likely have a positive impact on the country's annual trade deficit, which has been on a steady decline since 2015. In 2015 the country's trade deficit shot to over $3 billion and settled at $3,3 billion but the figure fell to $2,3 billion last year after Government intervention that included protectionist policies like Statutory Instrument 64 of 2016 which has been credited for a jump in industrial capacity utilisation.
The Reserve Bank of Zimbabwe (RBZ) has also been on an offensive in an effort to cut the deficit by promoting exports and last year launched a $40 million Gold Development Initiative that is aimed at securing the much needed funding for small-scale miners. The result has seen them competing well in terms of deliveries to the country's sole gold buyer Fidelity Printers and Refineries for onward export market.
Elsewhere, Zimbabwe's biggest trading partner, South Africa, maintained its stranglehold with 41 percent, (just over $1,8 billion), of Zimbabwe's imports in the first 10 months of the year coming from the southern neighbours. While authorities might be worried that the deficit remains high, the Confederation of Zimbabwe Industries (CZI), reckons some of the imports keeping the bill on the high are capital goods, which will soon stimulate local industrial growth and consequently lower imports.
Speaking to our sister publication, The Sunday Mail Business, earlier in the year CZI president Sifelani Jabangwe, said soaring imports do not necessarily mean that protectionist policies are failing.
"Yes, the (import) bill has not changed but you have to note the changes in the bill's composition. If you look at the 2017 bill, you will notice that although some finished goods are still there, capital goods now make up a large chunk of it as industry re-equips and retool buoyed by SI 64 success. So sooner than later, the bill will fall because you don't retool everyday as people do when importing finished products," said Mr Jabangwe.