Harare – Zimbabwe’s trade deficit narrowed 33% in May 2019 to $94 million from $140 million in April 2019 with analysts saying the position reflects the impact of the ongoing foreign currency shortages and austerity measures.
According to the latest figures from the National Statistics Agency (ZIMSTAT), the cumulative trade deficit between January and May 2019 came in at -$332 million which compares better off to a deficit of -$1.3 billion, incurred in the same period last year.
In May, exports grew by 24% to $343.2 million from $277.0 million in April while cumulative exports for the five months period came in at $1.55 billion which is almost unchanged on the same period last year.
According to analysts at research firm, Equity Axis, exports may fall significantly going forward given the poor performances in the gold and tobacco sectors.
“We fear that exports may significantly come off below the prior year as a result of underperformance in 2 of the top traded export commodities,” Equity Axis said.
“Cumulative gold deliveries for the first 5 months of 2019 were at 10.6 tonnes which compares less favourably to 13.8 tonnes achieved in the prior year, a 20% decline. Cumulative tobacco sales volumes since the opening of the selling season is 5% below last year with below 12 sessions to go,” the research firm further highlighted.
Meanwhile, imports registered a slow growth of 5% to $436.8 million from $416.7 million in April largely driven by government’s cutback in importation of key factor production imports such as diesel, wheat and soya bean oil which is used in the processing of cooking oil.
Further contributing to the slowdown in imports is the significant decrease in electricity imports averaging $4 million per month during the review period compared to $17 million in the same period last year.
The slump in electricity imports has however, come at a great cost with the country currently facing the worsts electricity load shedding in over a decade which in turn cripples productivity.
Government is currently negotiating electricity import deal with its counterparts in the neighbouring Mozambique and South Africa.
Going forward, analysts at Equity Axis project that the bias towards mineral exports is likely to prevail at least in the foreseeable future due to Zimbabwe’s economic structure and lack of diverse productive and competitive base.
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Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment.