HARARE – Zimbabwe's trade deficit ballooned to $3,02 billion in the eight months to August 2013 after the country imported goods worth $5 137 billion against $2,11 billion exports during the period.
According to latest figures from the national statistics agency, Zimstats, the southern African country imported nearly $35 million worth of milk and related products as dairy processors continue to lobby government to introduce a surtax on milk in order to compete on a level playing field with South African products.
The widening trade deficit comes as the African Development Bank (AfDB) recently warned Zimbabwe to limit imports to manage the gap.
AfDB said the reduction would result in more foreign currency retention and provide local industry with an opportunity to recuperate.
“Given that total imports already constitute about 52 percent of their projected value in 2013, there is need to contain them as the year progresses to ensure that the targeted value is achieved,” noted the bank in its latest monthly report.
Zimbabwe has been experiencing a recurrent trade deficit as it has, over the years, continued to import far more than it exports.
Total imports during the first half of 2013 were about $3,9 billion, an increase of about 26,2 percent compared to the same period in 2012.
Gideon Gono, the Reserve bank of Zimbabwe governor, earlier in the year said government was worried by the extent and level at which the country was depending on imports.
“We need to strengthen and capacitate our local industries, that is the only way we can stop the haemorrhaging of foreign exchange that is unnecessarily going out of the country, that is the only way we can reduce unemployment,” he said.
The trade imbalance results from the poor performance of local industry where average capacity utilisation is at 39,6 percent according to the Confederation of Zimbabwe Industries 2013 manufacturing survey.
Zimbabwean productive sectors have largely failed to boost capacity utilisation as a result of the prevailing liquidity constraints.
Economists say export market competitiveness by local industries has declined dramatically as a result of high production costs accelerated by capital constraints and high utility charges.
Production costs remain high as companies are using obsolete equipment.
Zimbabwe is emerging from a decade-long economic slump in which the economy contracted by more than 50 percent from a 1996 to 1998 peak of $9 billion to about $2,5 billion in 2008.