• Trade Deficit Reduction: Decreased to US$198.7 million in August 2024, down 27.7%
• Export Growth: Rose to US$674.0 million, with gold exports increasing to 37.9%
• Import Trends: Total imports reached US$872.8 million; vehicle imports increased following a policy change

Harare- Zimbabwe’s trade deficit has narrowed for the first time in a while, reaching US$198.7 million, a 27.7% decrease from the July 2024 deficit of US$274.9 million. The country has not recorded a trade surplus since the early 2000s, and for this year, the majority of its trade has been in deficit.

Gold exports rose to 37.9%, a significant boost from 34.2% in July. Tobacco exports also grew from 8.7% to 13%, while nickel mattes saw a slight decline from 10.5% to 9.8%.

The country's trade deficit has been a persistent issue, with Zimbabwe recording an average trade deficit of $203.55 million from 1991 to 2024.

Historically, Zimbabwe's trade balance has seen fluctuations, with a record high of US$293 million in December 2000 and a record low of -$3957.75 million in December 2009. The country's main export products include GOLD, tobacco, nickel, diamonds, and platinum, with UAE, South Africa and China being key trading partners.

A trade deficit occurs when the value of a country's imports exceeds that of its exports over a given period. Conversely, a trade surplus exists when the value of exports surpasses the value of imports.

Zimbabwe has faced a trade deficit since the early 2000s, primarily relying on imports for including for cereals, despite having once been known as the breadbasket for the region. This shift followed the Land Appropriation Programme, which redistributed land from competitive white farmers to local citizens based on race rather than merit, leading to increased reliance on food imports.

The situation was exacerbated by political rights abuses, human rights violations, and violent, disputed elections, which drove many Western businesses out of the country and resulted in ZIDERA sanctions.

With investors avoiding the country, industrial appetite diminished, and Zimbabwe has struggled with energy and currency crises, as well as reduced foreign direct investment (FDI) in productive sectors to divert from a consumption based country to a creation based state. Since then, the country has not experienced a trade surplus.

The latest narrowing of the trade deficit was driven by an increase in exports, particularly gold. In August 2024, exports totaled US$674.0 million, marking a 22.9% increase (US$125.7 million) from July 2024’s figure of US$548.3 million.

This increase follows the reversal of the 15% Value-Added Tax (VAT) on gold sales, which was scrapped through Statutory Instrument 105 of 2024 in July.

The removal of VAT, coupled with factors like electricity blackouts, currency fluctuations, and costs, had previously led to reduced gold contributions, as producers likely favored side-marketing for higher returns on the international market.

In August, global gold prices rallied to a record US$2,660 per ounce, marking the biggest quarterly gain since early 2016. 

Among the top ten exported products in August 2024 were semi-manufactured gold, tobacco, and nickel mattes, which accounted for 37.9%, 13.0%, and 9.8% of the total export value of US$674.0 million, respectively.

Major export destinations included the United Arab Emirates (38.9%), South Africa (25.4%), and China (8.9%), together accounting for approximately 73% of total exports.

On the import side, mineral fuels, oil, and related products decreased marginally from 19.4% to 18.7%. Machinery and mechanical appliances increased from 10.9% to 12.9%, while cereals dropped from 13.4% to 10.8%, making them the top three imports.

Vehicle imports rose from 7% to 7.6%, following the partial lifting of the ban on importing cars older than ten years in July 2024, which allowed certain groups, such as returning residents and diplomats, to import these vehicles.

 The top imported products in August 2024 included mineral fuels, mineral oils, machinery, cereals, and vehicles, constituting 18.7%, 12.9%, 10.8%, and 7.6% of the total import value of US$872.8 million, respectively.

Total imports for the month reached US$872.8 million, a 6.0% increase (US$49.6 million) from July 2024’s imports of US$823.2 million. 

Major source countries for imports in August 2024 included South Africa (41.4%), China (14.9%), Mozambique (5.4%), and the Bahamas (4.7%), which together accounted for around 66% of the total import value of US$872.8 million.

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