- Zimbabwe's trade deficit narrowed by 66% to US$46.9 million in November 2024, marking the lowest level since November 2021
- The improvement is attributed to increased exports of gold and tobacco, with total exports reaching US$905.2 million,a 29.7% increase from October
- Rising global geopolitical tensions have increased gold's value, propelling prices to record levels of US$2,700 per ounce
Harare-Zimbabwe's trade deficit narrowed by 66% to US$46.9 million in November 2024 from m US$698.1 million in October , attributed to better exports of gold and tobacco according to the latest Zimstat data.
This marks the lowest trade deficit in 3 years since November 2021 when the deficit hit a record low of 36.7.
Rising global geopolitical tensions have increased the essential value of gold, as investors shift toward safe-haven assets.
This surge has propelled the price of gold to record levels, hitting US$2,700 per ounce.
Headlining the exports were semi-manufactured gold, tobacco, and nickel mattes accounting for 39.7%, 30.5%, and 11% of all exports, respectively.
While the country’s major export destinations in November 2024 included the United Arab Emirates (40.5% of total exports), China, and South Africa (19.9% each) which collectively accounted for 80.3% of the country’s total export value.
As result, exports totalled US$905.2 million, which is a 29.7% increase from October’s US$698.1 million.
Conversely , the main imported products included mineral fuels, oils, machinery, cereals, and vehicles, which made up 22.1%, 11.9%, 9.1%, and 7.6% of the total import value, respectively.
In 2023, Zimbabwe's total exports grew by nearly 10% to US$7.2 billion, up from US$6.59 billion in 2022.
ZimTrade, the country’s trade development agency, aims to increase exports by at least 10% each year to reach US$14 billion by 2030. The government hopes to achieve an upper middle-income status.
Despite the growth in gold exports, the sector continues to encounter challenges in meeting government targets.
One major issue is the restriction on selling gold directly to the London Bullion Market. Instead, Zimbabwe is forced to rely on agencies to facilitate these transactions, resulting in reduced earnings and increased costs.
400 million means Zimbabwe is losing 20% on every tonnage exported. This significant loss highlights the need for Zimbabwe to reassess its export strategy and explore alternative options.
Another primary challenge facing the sector is electricity deficits, which compel firms to rely on costly backup power solutions, ultimately inflating operational costs and impeding productivity.
To mitigate these issues, a consistent electricity supply for gold miners is essential to reduce costs.
Government should consider lowering taxes and streamlining regulations for the sector, including exempting gold mining firms from surrender requirements of 25% or just even lower them down to 5%. Miners should retain more capital to invest.
The government must also intensify efforts to combat gold leakages, which are costing the country billions in lost income.
Despite ongoing initiatives, many individuals involved in these leakages are reportedly politically connected, as highlighted in the "Gold Mafia" documentary.
Gold remains Zimbabwe’s most significant export commodity, accounting for approximately one-third of all exports and generating 60% of the country’s foreign currency receipts and around 30% of export value.
The nation experienced a drastic decline in gold production in 2008, recording only 3 tonnes, but rebounded to a record output of 35 tonnes in 2022.
Key players in the large-scale gold production space include Kuvimba Mining, Padenga, and Freda Rebecca.
Incentivizing both large-scale and small-scale miners is vital for enhancing overall output. Currently, Padenga leads the gold production landscape through its mining arm Dallaglio, which operates the Eureka Mine and the newly operational Pearless Picksone mine.
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