• Maize Imports Rise: Increased to US$42 million in October 2024, primarily sourced from South Africa
• Fuel Imports Trade Dynamics: Rose significantly, with petrol imports reaching US$40 million and diesel imports totalling US$91 million
• Trade Balance Records Best: Trade balance narrowed with trade deficit decreasing by 32.2% to US$138 million

Harare- Zimbabwe's trade deficit narrowed in October 2024, despite remaining in the red. According to data from Zimstat, total exports reached US$698 million, representing a 16% year-on-year decline from US$832 million in October 2023.

The decline was also seen in month-on-month trade deficit for October 2024 which recorded a significant 32.2% reduction to US$138 million, from US$209 million in September 2024.

This development marks the second-lowest trade deficit in 2024, following February's deficit of US$85 million.

The improvement in the trade balance was due to the highest monthly exports recorded year-to-date, driven by robust performances in critical sectors, particularly gold and tobacco.

The escalation of global geopolitical tensions has significantly enhanced the intrinsic value of gold, as investors pivot toward safe-haven assets, driving the metal's price to unprecedented levels, reaching US$1,700 per ounce.

Consequently, gold production for the month surged to over 4 tonnes, coinciding with this upward price trajectory. As a result, these two sectors contributed 42.4% and 17.5% to total export figures, respectively.

Gold exports exhibited exceptional growth, reaching US$296.85 million in October 2024, up from US$231.98 million in September 2024.

Cumulatively, gold exports for the first ten months of 2024 totalled US$1.871 billion, surpassing the US$1.53 billion achieved during the same period in 2023.

The average monthly export value for gold stands at US$187.17 million, reflecting consistent positive trends bolstered by record deliveries to Fidelity Printers.

However, despite the growth in gold exports, the sector still faces challenges in meeting government targets. The National Development Strategy 2 (NDS2) aims to outline new mining targets, but past targets, such as the ambitious goal of a US$12 billion mining sector by 2023, have not been met.

The gold subsector, which fell short of its US$4 billion target, requires a shift towards formalizing the mining sector, which is currently dominated by small-scale and artisanal miners. This informal nature often leads to inefficiencies that hinder production.

In contrast, imports for October 2024 totalled US$836 million, reflecting a 7% increase from US$784 million in September 2024. This uptick was driven by heightened fuel purchases, especially diesel and petrol, alongside significant maize imports, primarily sourced from South Africa, which accounted for 39.6% of total imports.

The reliance on South African maize stems from its regional surplus, highlighting the interconnectedness of regional agricultural markets.

However, this raises questions about Zimbabwe's policy on genetically modified organisms (GMOs), as the country does not allow the growing of GMO maize, yet imports it from South Africa.

This development has perpetuated Zimbabwe's reliance on South African goods, earning the country the moniker "supermarket of South Africa."

Furthermore, there has been a notable rise in rice imports, largely due to the revision of VAT status from zero-rating to exempt for certain products, including rice.

This policy change has made local rice more expensive, necessitating the importation of cheaper, albeit lower-quality, rice from South Africa and the region.

 Additionally, the influx of vehicles, particularly second-hand cars, has continued, illustrating a paradox in Zimbabwe's economic behavior. The government's decision to allow returning citizens to import cars duty-free has contributed to this trend.

The introduction of Statutory Instrument 111 in July 2024, permitting the import of inherited cars, as well as vehicles belonging to returning citizens and diplomats, even if older than 10 years, has further extended the exemption to immigrants.

Despite the growth in exports, Zimbabwe's economic challenges persist, characterized by droughts, porous borders, fiscal indiscipline, and ongoing concerns regarding the Zimbabwe Gold (ZWG).

Historical economic mismanagement, marked by budget deficits, off-budget expenditures, and excessive money printing, continues to undermine the stability of the local currency, exacerbating high import demand.

The forthcoming budget announcement from the Treasury is anticipated to provide clarity on fiscal strategies moving forward.

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