HARARE, January 8 (The Source) – Zimbabwe’s trade deficit widened in November last year amid a broad decline in exports, adding to concerns that the country could be heading into recession as the manufacturing sector’s production capacity continues to decline.
Zimbabwe posted a $3 billion deficit in the 11 months to November compared to $2,97 billion in the previous corresponding period, according to data released by the Zimbabwe National Statistics on Thursday. The government had predicted a $3 billion trade deficit for the whole year.
November trade figures show that exports amounted to $2,5 billion against $5,5 billion imports, which remain heavily skewed towards consumption following a significant drop in raw materials importation.
Exports in the period under review were dominated by gold, tobacco, nickel and diamonds, while imports comprised mainly of fuel, medicines, maize and vehicles, among others.
Finance minister Patrick Chinamasa has previously said the large trade deficit reflects, among other factors, the country’s over-reliance on foreign goods, most of which can be produced locally. These goods include grains, foodstuffs, chemicals and pharmaceutical products, among others.
“Furthermore, the continued depreciation of the rand against the US dollar, has undermined the competitiveness of our exports,” he said in his 2016 National Budget statement.
The rand plunged to new depths on Thursday, hitting R16,20 to the US dollar, with Zimbabweans increasingly preferring the US dollar over the currency in business transactions and as a store of value.
In the outlook, exports are projected to increase to $3,7 billion this year up from $3,4 billion projected in 2015.
The projected increase is on account of the expected improved performance of minerals, namely gold, nickel, diamonds and ferrochrome, chrome ore and fines, tobacco and horticultural produce.
Chinamasa noted that imports were projected to marginally decline to $6,2 billion in 2016 from $6,3 billion, attributed to the measures that were put in place to manage the unfair playing field imposed by some cheap foreign products.
Zimbabwe’s top 10 trading partners in 2015 were South Africa, Singapore, Mozambique, China, Zambia, United Kingdom, United Arab Emirates, Botswana, Japan and India.