Import bill to balloon: Chanakira

via Import bill to balloon: Chanakira – NewsDay Zimbabwe December 15, 2015

The high import bill is set to be worsened by the South African rand that has dropped to all-time low levels against the dollar, an official has said.

BY TATIRA ZWINOIRA

The South African rand plunged to R16 against the United States dollar last week, after the sacking of Finance minister Nhlanhla Nene. It strengthened to R15 to the dollar yesterday as markets showed confidence in the reappointment of Pravin Gordhan as the new South African Finance minister.

Speaking at the third edition of the Buy Zimbabwe awards held last week, Zimbabwe Investment Authority chairperson Nigel Chanakira said the high import bill is being affected by the drop in regional currencies particularly the South African rand.
“The high import bill coupled with the fact that industry is operating significantly below capacity does not broker well for economic growth. The position of course has been worsened by the weakening of regional currencies, particularly the rand reaching record low levels,” Chanakira said.

“We are currently reeling under the burden of debilitating liquidity which is aggravated by our high import position. The deficit which largely comprises of consumptive expenditure illustrates that our demand for local products is low.”

The impact of the new record low levels on the South African currency is expected to affect the local market due to Zimbabwe’s increased dependence of imports from that country. The impact is expected to increase the cost of doing business and trade with that country, particularly food which remains the main source of the import bill.

South Africa is the country’s biggest trading partner accounting for 40% of the import bill and 68% for exports. In the total, import bill, food according to the 2015 Midterm Fiscal Policy is projected to reach 64% by year-end.

The overall high import bill is mainly due to increased dependence on the foreign goods for quality, affordability and availability.

The trade deficit for 2015 is $2, 9 billion as imports are projected to be $6,3 billion against exports of $3,4 billion by the close of the year.

Buy Zimbabwe acting chairman Oswell Binha said that they were imploring government to support their initiative to resuscitate industry and buy locally.

“It is our legitimate expectation that we implore government not only to support this initiative [buying locally] through recognition of its importance, but to deal with macro-economic measures as a way of ensuring industrial capacity development,” Binha said.

“This year should see a movement from rhetoric to realities, moving away from path-fighting and reactive mode to being proactive and towards planning.”

He said there should be an increased commitment to implementing all agreed policies.

The biggest winner of the night was the N Richards Group who scooped the best company of the year award among others. Alpha Media Holdings was given a certificate for its participation in the event.