Lower gold exports and weaker rand see Zimbabwe’s exports decline
LOWER gold exports and weaker rand see Zimbabwe’s exports declineZimbabwe’s exports to South Africa declined by 37,3 percent as the South African rand dipped to an all time low in the month of August.
Amid concerns over the strength of the Chinese economy and due to internal pressures within South Africa’s economy the rand was at one time trading at ZAR14 against the US dollar.
The weakening rand has been felt in Zimbabwe as exports to South Africa are beginning to show signs of slowing down.
According to the latest trade data from ZimStats, for the month of August Zimbabwe exports to its South African neighbour were down 37,3 percent from US$137,6 million to US$86,3 million, while Zimbabwe’s imports from South Africa climbed 5,4 percent from US$189.3 million to US$199,6 million.
The weakening rand has made imports from South Africa land much cheaper in Zimbabwe. This is despite the policy measures, meant to curb imports, introduced by government at the Mid Term Fiscal Policy Review.
Zimbabwe’s trade deficit for August stood at US$316,2 million from US$291,4 million recorded in July this year. This represents an increase of 8,5 percent from the July figures.
The stronger US dollar has also seen Zimbabwe’s exports decline 30,5 percent month on month from US$204,8 recorded in July to US$142,3 million recorded in August. South Africa remains Zimbabwe’s largest trading partner with total trade of $285.9 million for the month of August between the two neighbouring countries. This represents 47,5 percent of Zimbabwe’s total trade in terms of value.
Overall Zimbabwe’s trade deficit for the year to August 2015 now stands at US$2.02 billion reflecting the over dependency in imports and the decline in exports as the local economy continues to be hamstrung by capacity constraints and lack of competitiveness.
The declining exports have all but reversed the gains registered in May 2015, when Zimbabwe’s exports were showing strong signs of recovery and growing much faster than imports. For July exports grew 14,8 percent while imports grew at a much slower rate of 0,15 percent and in August the trend has now shifted with imports now declining at much slower rate and as we approach the holiday season the trend is set to continue. The decline in imports is attributed to the slowdown in economic activity in Zimbabwe and the lower than expected aggregate demand..
For the month of August total Zimbabwe exports of goods and services stood at US$142,3 million while imports were US$458,6 million, resulting in the trade deficit of US$316,2 million which was 6,5 percent lower than the July trade deficit of US$337,5 million. The decline in the August export numbers also came as a result of lower gold exports.
While consensus says that the country’s trade deficit will likely improve in the near term, the effect of the weakening rand will see further deterioration in the trade deficit in the next few months.
For the month of August 2015 the country’s major export products were tobacco at US$57,2 million followed by. Ferro Chrome exports which were recorded at US$14,1 million. Nickel ore exports were lower at US$12,6 million and diamonds come in at a distance $7.3million. The country also exported electricity worth $7.5million.
On imports, the major products remain Fuels and Lubes at US$80,6 million. This was followed by vehicles (all types) at US$32,3 million while medicine and medical equipment were US$19,2 million. The country also imported maize worth US$16,9 million while rice and wheat were US$10,2 million and US$3,6 million respectively. -FinX