Oliver Kazunga, Senior Business Reporter
ZIMBABWE’s trade deficit narrowed 63 percent for the period between February and August this year to $644 million compared to $1,73 billion during the comparable period last year, official figures show.
In its latest report, the Zimbabwe National Statistics Agency (Zimstat), indicated that data for January last year was not available because the Zimbabwe Revenue Authority, which is the source of merchandise trade data, has not availed the statistical figures.
The agency revealed that imports for the period between February and August this year totalled $2,79 billion against exports of $2,15 billion.
During the same period last year, the value of imports stood at $4,13 billion against exports worth $2,41 billion.
In the report, Zimstat also indicated that the major drivers of Zimbabwe’s import bill during the period under review were electricity, which increased by 70 percent to $39 million, soya bean by 46 percent to $45 million while petrol improved by 21 percent to $248 million.
On the other hand, diesel, which was also among the major drivers of the country’s import bill, increased by 10 percent to $556 million.
During the period between February and August this year, Zimbabwe’s major export such as gold, tobacco and ferrochrome, among others, registered a decrease in earnings.
However, nickel ores and diamond were the only commodities that registered improved export earnings.
Low export earnings have largely been attributed to depressed production by the manufacturing sector and mining industry due to power constraints and a shortage of foreign currency to import critical raw materials.
As of last Friday, the Zimbabwe Power Company indicated that the country was producing 696MW against a national demand of 2 200MW.
Depressed power output has largely been attributed to the effects of climate change that has adversely affected the generation capacity of the country’s major power plant, Kariba, whose installed capacity was pegged at 1 050MW.
But because of low water levels at Kariba, the power station was producing 340MW as of Friday last week.
Early this month, the Zimbabwe Energy Regulatory Authority (Zera) approved an electricity tariff increase of ZWL162,16c per kilowatt hour following a recent application by Zesa to adjust the charge to promote viability and better service delivery.
Zesa Holdings through its subsidiary, the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) had applied to increase the power tariffs from 38,61c/kWh saying the previous rate had been eroded by the movement of macro-economic fundamentals.
While granting the power tariff adjustment, Zera indicated that it expects a significant improvement in electricity supply position from ZPC, which is responsible for generating electricity.
Zera also outlined that it expects reduced load shedding hours and improved reliability of supply from ZETDC as the company is able to import electricity from the Southern African Power Pool.
The regulatory authority also anticipates more concerted energy efficiency measures from consumers to ensure power is put to good use.
After nearly two decades of economic decline, President Mnangagwa’s administration, which came into power in November 2017, is battling to rebuild the economy by-among others things-improving the domestic investment climate, supporting key productive sectors and reintegrating Zimbabwe into the global community.
On the back of a structurally dislocated economy and production subdued in many sectors, a narrower trade deficit coming on the back of expanding exports and falling imports will always help breathe new life into the economy.
Zimbabwe imports about 55 percent of basic commodities and other essential goods due to low productivity in the majority of the country’s main sectors, which exerts pressure on its meagre foreign exchange earnings.
The country’s exports continued to be outstripped by imports, as it mainly exports un-beneficiated primary products from mining and agriculture. — @okazunga