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Harare – South African exports are flooding Zimbabwe, driving up the struggling country’s import bill to US$5.8bn with the trade deficit for the 11 months to November 2014 widening to $3bn, the country’s statistics agency Zimstat said on Tuesday.
Zimbabwe has become a net importer of processed goods, vehicles, machinery and other commodities owing to curtailed productivity in its economy. Finance Minister Patrick Chinamasa has described the commodities and goods Zimbabwe imports as “non-essential, cheap and sub-standard” and has since implemented measures to curb imports.
However, economists say import restriction measures will not drive up productivity as attention should focus on the local industry with efforts aimed "at helping restore capacity and boosting resources" to grow production.
“The import restrictions have been in place since last year when the Mid-Term Fiscal Policy was announced but there has still been no significant improvement in productivity.
"The need to raise capacity and assist the local industry with resources and turnaround strategies far outweighs banning imports because we may end up promoting illegal imports and choking the local market,” said economist Jeffrey Kasirori.
Most of Zim's processed goods from SA
South Africa - alongside China and Japan as well as the United Kingdom and Singapore - accounted for most of the imports into the country. Most of the processed goods in Zimbabwean shops are imported from SA and China, while Japan and the UK mostly export pre-owned vehicles to Zimbabwe.
During the period under review, exports from Zimbabwe amounted to $2.8bn, mainly consisting of minerals. Zimbabwe is a significant producer of gold, platinum, diamonds, coal and nickel and major miners such as Anglo American Platinum [JSE:AMS], Impala Platinum [JSE:IMP], Rio Tinto and Mzi Khumalo’s Metallon Gold have operations there.
Produce from the country’s agricultural sector such as tobacco also dominated the country’s exports. Chinamasa has predicted 3.2% economic growth for this year although experts say this will be difficult to attain, owing to subdued mineral prices on global markets and lower industrial productivity.
The Buy Zimbabwe pressure and lobby group says cheaply imported products pose unfair competition for locally produced goods. The government has also reduced import duty on raw materials for the production of some goods to boost manufacturing activity.
Industrialists in Zimbabwe say their operations have suffered from the high cost of finance and liquidity constraints which are hampering efforts to re-capitalise operations.
Infrastructure deficits, power outages and outdated machinery have also been blamed for curtailed productivity in Zimbabwe, which has widened the country’s trade deficit as a result.
Zimbabwe has become a net importer of processed goods, vehicles, machinery and other commodities owing to curtailed productivity in its economy. Finance Minister Patrick Chinamasa has described the commodities and goods Zimbabwe imports as “non-essential, cheap and sub-standard” and has since implemented measures to curb imports.
However, economists say import restriction measures will not drive up productivity as attention should focus on the local industry with efforts aimed "at helping restore capacity and boosting resources" to grow production.
“The import restrictions have been in place since last year when the Mid-Term Fiscal Policy was announced but there has still been no significant improvement in productivity.
"The need to raise capacity and assist the local industry with resources and turnaround strategies far outweighs banning imports because we may end up promoting illegal imports and choking the local market,” said economist Jeffrey Kasirori.
Most of Zim's processed goods from SA
South Africa - alongside China and Japan as well as the United Kingdom and Singapore - accounted for most of the imports into the country. Most of the processed goods in Zimbabwean shops are imported from SA and China, while Japan and the UK mostly export pre-owned vehicles to Zimbabwe.
During the period under review, exports from Zimbabwe amounted to $2.8bn, mainly consisting of minerals. Zimbabwe is a significant producer of gold, platinum, diamonds, coal and nickel and major miners such as Anglo American Platinum [JSE:AMS], Impala Platinum [JSE:IMP], Rio Tinto and Mzi Khumalo’s Metallon Gold have operations there.
Produce from the country’s agricultural sector such as tobacco also dominated the country’s exports. Chinamasa has predicted 3.2% economic growth for this year although experts say this will be difficult to attain, owing to subdued mineral prices on global markets and lower industrial productivity.
The Buy Zimbabwe pressure and lobby group says cheaply imported products pose unfair competition for locally produced goods. The government has also reduced import duty on raw materials for the production of some goods to boost manufacturing activity.
Industrialists in Zimbabwe say their operations have suffered from the high cost of finance and liquidity constraints which are hampering efforts to re-capitalise operations.
Infrastructure deficits, power outages and outdated machinery have also been blamed for curtailed productivity in Zimbabwe, which has widened the country’s trade deficit as a result.
