Zimbabwe running huge trade deficit with Comesa

via Zim running huge trade deficit with Comesa – The Standard April 27, 2014 By Musa Dube

ZIMBABWE’S trade deficit in the Common Market for Eastern and Southern Africa (Comesa) continues to widen amid revelations that it now stands at about US$500 million, an official has said.

Speaking in Bulawayo last week, Comesa senior trade officer Tasara Muzorori said Zimbabwe was running a huge trade deficit at the regional trading bloc.

“There is a negative trade balance between Zimbabwe and members within the Comesa region, and it’s not a healthy situation. We are importing more than we are exporting, especially after 2008,” said Muzorori.

He said in 2012, Zimbabwe imported over US$600 million goods while it exported just over US$100 million worth of goods.

Muzorori said the last time Zimbabwe performed well in the Comesa for the past 10 years was in 2003 when the country exported goods worth over US$100 million against less than US$1 million imports.

He added that Zimbabwe’s top import from the Comesa in 2012 was maize.

“The top exports to the Comesa region is coke and semi-coke, followed by cigarettes and others,” said Muzorori.

“The top exports destinations in the Comesa markets are just three countries: Zambia, Malawi and DRC. The country is mainly exporting coke or semi coke of coal, lignite or peat and tobacco to these countries,” said the Comesa official.

ZimTrade regional manager Similo Nkala urged local companies to take export markets seriously and counter the effects of the trade deficit.

“Zimbabwe’s exports have increased since 2009 from US$2,2 billion to US$3,5 billion in 2013. On the other hand imports have increased at a faster rate during the same period from US$3,5 billion to US$7,7 billion.

“The trade deficit has therefore widened significantly from US$1,3 billion to US$4,2 billion thus weakening the country’s Balance Of Payment and the country’s liquidity conditions,” said Nkala.

The ZimTrade’s Export Manufacturing Capacity Survey for 2013 realised early this month revealed that over 70 % of local companies that have been exporting in the past 10 years have ceased due to numerous challenges such as hassles in producing for exports and low production.

 

COMMENTS

WORDPRESS: 10
  • comment-avatar
    Mlimo 8 years ago

    Just. A failure to understand the drivers in modern economics get rid of Mugabe and you’re fifty percent there.

  • comment-avatar
    Bill Mills 8 years ago

    Eventually the girls will say: ‘No money, no honey!’

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    Jono Austin 8 years ago

    Why is our biggest import maize, when we were told that the land reform (aka land theft) was an incredible success? Did not Amai Helicopter tell us that white farmers were ‘mere actors’ Yet Zimbabwe never used to import maize! So what is the excuse-oh yes sanctions and drought. Never mind that Smith had real sanctions applied and there were many droughts in Smith’s days and maize was never imported.

    • comment-avatar

      They are too dense to see that Jono. ZPF threw out all the farmers. Talk about cutting off ones nose to spite ones face.

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    ““The trade deficit has therefore widened significantly from US$1,3 billion to US$4,2 billion thus weakening the country’s Balance Of Payment and the country’s liquidity conditions,” said Nkala.”

    So in addition to the flight of capital since Mugabe stole the latest election; and the fact that Mugabe has fostered a mentality of never repaying loans; the fact that the country is sending $4.2Billion out of the country each year due to it’s reliance on imports might have a significant effect on national cash liquidity. But of course, rather then changing the policies that created this situation, Mugabe, Chinamasa and all the other ZANU thief’s would prefer to blame the poor bankers for not making more questionable loans.

    When Bill Clinton ran for President of the US he had a famous retort whenever anyone asked him where his priorities lay, “It’s the economy, stupid!” He made good on his promise and created a lot of wealth for his countrymen. However, Robert Mugabe’s most infamous cries are, ” We will never be a British colony again!” and “We have degrees in violence!” Pretty telling that Mugabe acts as if he’s still fighting a war from 40 years ago, and for him, pride is more important then prosperity for the country.

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      roving ambassador. 8 years ago

      In the 90′ I think, a Japanese second world war soldier was found some where in east Asia still believing the war was still on .
      He probably shares the same DNA with the dear leader Mugabe.

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    Chanisa 8 years ago

    And now Chinamasa accuses importers of Japanese cars of causing the trade deficit! How at a loss we can be.

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    Mixed Race 8 years ago

    I would love to buy a locally sold car from one of our garages but the prices are beyond my pension allowance.If I import a car which costs about $2260 from Japan by the time it arrives here I will have paid $7200 after payment of duty and other charges.This car would cost me about $10 000 from a local garage after they have put up their markup.My policy is to buy any item costing from $500 upwards locally for financial security reasons eg you get a guarantee for about a year which is impossible to get from outside or if you have one you cannot send the item back because its not practical.I am prepared to pay a little more for locally sold items to get my guarantee like I have on my laptop which is 2 years guarantee.
    This can be avoided if our government improved our local industries so that they can easily compete with external companies after they have replaced their obsolete equipment.When I visit some of these companies I feel like crying because they try to function with very very old equipment which break down now and then. Heavy losses are caused by operational failures due to equipment failures and ZESA power cuts which do sometimes affect scheduled manufacturing processes with disastrous results.To try and make up for the operational losses the companies are forced to raise their prices thus making their finished products less competitive with the rest of COMESA countries.As long as we do not modernize our industries we should forget having more exports than imports.

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    Is this the maize from the farmers who left and are doing well in places like neighbouring zambia Ouch!!