Zim’s half year import bill tops US$2,9bln

via Zim’s half year import bill tops US$2,9bln 01 October 2014

ZIMBABWE’S import bill for the six months to June stood at US$2,9 billion as the country is failing to produce enough, a government minister said this week.

Deputy industry minister Chiratidzo Mabuwa said the figure could be reduced if local retailers and suppliers enhance their cooperation and business for the benefit of Zimbabwe.

“For the same period, we have seen a rising trade deficit of US$1,7 billion being continually propelled by the consumptive nature of the retail sector which imported over US$400 million worth of groceries in the first half of 2014.”

The minister said it was fascinating to speculate what US$400 million could do to the local manufacturing and retail sectors if channelled towards local production.

“Such negatively skewed trade trends are detrimental to any efforts of rejuvenating the local industry, creating employment and stemming the liquidity crunch we are currently experiencing.”

“They are at the forefront of expectations from consumers who wish to see a return for their value. Retailers are also a vital information gathering tool in our drive to build our competitiveness.”

The country’s huge trade deficit, averaging US$250 million per month, is creating a situation where money, which is supposed to circulate internally, thereby creating liquidity, is in fact being exported by financing imports.

The gap is expected to widen further as the local industry continues to struggle to meet consumer demand, analysts said. They pointed out that the huge deficit showed that there was a market readily available in Zimbabwe which local manufacturers could tap into.

According to a Confederation of Zimbabwe Industries (CZI) Manufacturing Sector Survey, local companies were not exporting because their products had become uncompetitive on the export markets.

The companies also said the shortage of working capital had forced them to focus on meeting local demand while the high cost of production had rendered their products too expensive.

Recovery in the export sector had remained sluggish and diaspora inflows stunted due to adverse global economic developments.  Capital inflows had remained subdued on account of growing investor uncertainty.

No improvement in the trade deficit is anticipated in the short to medium term as industry continues to be under-capitalised, continued economic uncertainty and concerns over the attraction of Zimbabwe as a predictable FDI destination.