Buy Zimbabwe general manager Munyaradzi Hwengwere has bemoaned the country’s souring trade deficit after it imported US$2,9 billion worth of goods against US$1,2 billion exports in the first half of 2014.
By Musa Dube
Speaking at a business conference in Bulawayo, Hwengwere reiterated the need to put concerted effort into reducing the ballooning trade deficit.
“We are faced with a soaring trade deficit and in the first half of 2014, we had US$2 996 billion worth of imports against US$1 228 billion exports, thus creating a US$1 767 billion trade deficit,” said Hwengwere.
He said the country was in a trade deficit predicament because local products were not competitive on the international market.
“Local products are relatively more expensive compared to imported products,” he said.
Hwengwere added that poor government procurement, weak procurement systems within the private sector and porous border posts were some of the reasons why the country was in such a frightful trade deficit.
He called for the immediate stopage of the dumping of cheap and sub-standard goods in the country and for the protection of local companies. He said capacity utilisation among companies and funding constraints needed to be addressed urgently.
Most companies are operating at 39% capacity.
Zimbabwe imports mostly consumptive products such as groceries and clothing, vehicles and vehicles, spares which are accounting for 70% of the import bill.
“If we prioritise our procurement behaviour, we will save US$2 billion every year which will create jobs in the country,” said Hwengwere.
According to the results of the Zim Trade’s Export Manufacturing Capacity Survey for 2013, over 70% of local companies that have been exporting in the past 10 years have ceased operations due to numerous challenges such as hassles in producing for exports and low production.
Hwengwere however, said firms had indicated that once the government had come up with export supporting or enhancing policies, most of them would be able to increase their levels of exports as the capacity to do so was there.