ZimStat figures show that in February, the country imported goods and services worth US$370.5m against exports of US$348.4m. Photo: Supplied

HARARE – Zimbabwe’s trade deficit dropped by 90 percent to US$22.1 million (R311m) in February 2019 with analysts attributing the decline to foreign currency shortages.

Figures released by the Zimbabwe Statistics Agency (ZimStat) show that in February, the country imported goods and services worth US$370.5m against exports of US$348.4m.

In the same period last year, imports stood at US$574.9m and exports at US$346.3m, giving a trade deficit of US$228.6m.

Exports were flat on the prior year’s figures, while imports fell by 36 percent.

“It’s mainly a reflection of foreign currency challenges obtaining in the economy. Remember, we are an import-dependent economy,” Persistence Gwanyanya, an economic analyst, said.

The bulk of the country’s imports in the period under review remained heavily skewed towards consumptive products, which comprise fuel, wheat, medicines and vehicles, while exports include gold, flue-cured tobacco, nickel and chrome, among others.

Largest foreign currency earners were tobacco at US$83.8m, followed by gold at US$82.8m, nickel mattes at US$52m, as well as nickel ores and concentrates at US$34m.

The top four imports in the period under review were ranked as diesel, which guzzled US$59m, followed by unleaded petrol at US$30m, crude soybean meal at US$5.8m and broken rice at US$3.5m.

Gwanyanya said the challenge with Zimbabwe was that the exports were driven by commodities, and not by industry production.

In his 2019 monetary policy statement, Reserve Bank of Zimbabwe governor John Mangudya indicated that the country’s external sector position had largely remained under considerable pressure due to excessive foreign currency demand against foreign currency inflows.

He also said the pressure was manifest through large and persistent trade, including current account deficits that the economy has been recording since 2009.

While exports of goods and services have been on an upward trend, Mangudya said this had been offset by the increase in imports of goods and services on the back of domestic supply gaps and rising international oil prices.

Alpha Media Holdings via African News Agency (ANA)