HARARE, October 29 (The Source) – Zimbabwe’s imports from South Africa have risen by 320 percent over the last decade, reflecting the near-collapse of its manufacturing base which coincided with a sharp decline in its economic growth, according to the latest research by a leading regional bank.
Zimbabwe’s imports from South Africa reached an all time high of R18,9 billion (US$1,89 billion) in 2012, from R4,5 billion in 2000, while exporting R3.1 billion worth of goods compared to R1.2 billion in 2000 for a trade deficit of R15,8 billion.
The southern African country’s economy took a plunge in 2000, when President Robert Mugabe’s ZANU-PF government embarked on a drive to seize white-owned commercial farms to resettle landless blacks. The economy shrunk by as much 40 percent between 2000 and 2009, according to government statistics.
In its latest trade research, Standard Bank said Zimbabwe buys mostly prepared foodstuffs, machinery and mechanical appliances, chemical products, base metals as well as animal products, which make up about 63 percent of the import basket.
A recent CZI manufacturing survey showed that capacity utilisation dropped to 39.6 percent in June this year from 44.9 percent last year but remains higher than the 10 percent recorded in 2008, at the height of Zimbabwe’s economic crisis.
Standard Bank said vehicle imports from South Africa have maintained stellar long-term average growth rates, although recent data suggests that softer growth may be on the cards in the short- to medium term due to competition from cheaper used car imports from Japan and the United Kingdom.
In the last decade, Zimbabwe’s three main vehicle assembly plants of Willowvale Mazda Motor Industries, WH Dahmer, Deven Engineering collapsed and a fourth, Quest Motors, is struggling despite producing a line of Chinese vehicles, Chery.
Zimbabwe’s export basket to South Africa is primarily made up of mineral products, prepared foodstuffs, beverages and tobacco, precious and semi-precious metals and stones, textiles and base metals, which collectively made up 87 percent of total imports in 2012.
The long-term average export growth over the past two decades is around 16 percent year on year but the biggest increase was recorded in 2011 when they rose by 146 percent after a negative growth of 75 percent in 2009.
“Growth of imports from Zimbabwe has been volatile over the past five years, with three of the five years reflecting a contraction in import growth,” said the bank.
These trends have contributed to South Africa holding a steady trade surplus with Zimbabwe since 1994. The peak in the surplus was recorded in 2012 at R15.8 billion, compared to a low surplus of R1.3bn in 1993.