Zimbabwe opens 2015 with negative $271mln trade balance

HARARE,– Zimbabwe’s reliance on imports continues to drain the economy after registering a negative trade balance of $271,1 million in January, latest trade data shows.

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Zim opens 2015 with negative $271mln trade balance

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Information from the Zimbabwe National Statistics Agency (Zimstat) shows that goods worth $538,2 million were imported while exports stood at $267 million.

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Zimbabwe’s balance of trade has remained in negative territory in the last few years fuelled by economic decline that has hit on productivity while promoting imports.

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In 2014, the country recorded a trade deficit of $3,3 billion with the Reserve Bank citing in part the retreat in international commodity prices, lack of competitiveness as having hit on the country’s trade balance.

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According to the Zimstat data, maize, rice, wheat, crude oil and cane topped the list of imports while exports included tobacco, minerals, cotton, wood products and cigarettes.

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The RBZ in its January monetary policy statement said lack of export competitiveness combined with other factors such as limited access to affordable lines of credit hit on the economy’s ability to boost its performance as runaway imports continued to milk the economy of funds necessary to build foreign currency reserve buffers.

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The strengthening of the United States dollar against major currencies has also not helped Zimbabwe’s case.

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Zimbabwe adopted use of the United States dollar in 2009 after dumping its inflation ravaged local unit.

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Government has however blamed locals for importing unnecessarily trivial and non-productive goods that are choking the ability of the local industry to recover.

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As part of measures to curtail imports, government, in its 2015 budget, hiked duties on a number of goods and products that dominate imports while reducing duties on raw materials to boost local productivity and export competitiveness. – The Source