Industry hails trade deficit slump
◆ From Page 1 trade,” said Mr Moyo.
He, however, emphasised the shortage of liquidity for the greater part of the year as another underlying factor that slowed down imports and ultimately low aggregate demand for luxurious import products.
“The shortage of liquidity has meant that country has been forced to prioritise its imports and go down only importing basics and raw materials. We encourage this to continue and luxuries be denied for the next three years as we build industry and the capacity to create employment and increase productivity,” he added.
He further noted that despite the trade deficit narrowing by close to a billion dollars this was much to a sharp fall in imports against a marginal increase in exports but applauded industry resilience to export in the wake of challenging operating environment.
Government has also been credited for the export incentive scheme which came with additional bond notes for exporters which resulted in an increase in production particularly in gold and tobacco sectors with the aim for export markets
“Companies albeit in a difficult and high cost environment are beginning to be export conscious and are building export markets and opening foreign markets. Horticulture exports are contributing a significant amount of exports and Mineral prices are starting to firm again and should result in value growth,” he added.
Value growth resonates with the country’s economic vision of unlocking value in the country’s raw minerals to maxim- ise on profits.
Zimbabwe’s export basket comprises of a narrow product range mainly dominated by 5 minerals which find external markets in their raw form hence restricting the country to a small proportion of its mineral values.
“Investment in education and technology to manage and add value to our minerals before they leave the country will not only add value to our ultimate export receipts but will help diversify our economy and improve on GDP,” said economic analyst, Mr Adonis Ntuli.
He said this would help the country cushion itself from oscillating international commodity prices which took a severe dip of up to 30 per cent from 2014 to 2015 leaving most commodity backed economies in recession.
However analysts are of the view that Zimbabwe’s major Achilles is its weak productive levels that are a result of a multi-faceted factors ranging from high cost of doing business, old equipment and lack of competitiveness of its final products which affects viability.
Mr Moyo said there was need to continue with production-friendly policies which spur industrial growth while it also accorded a favourable environment for entrepreneurship in order to encourage more business enterprises in the country.
“Government needs to continue its pro-local industry stance as we encourage entrepreneurship, innovation and employment. This is consistent with the changing winds internationally as countries look at their domestic production development such as the US under President Trump,” he said.