Zimbabwe's balance of payments will close the year in the negative as the economy struggles to improve its productive capacities to cut over dependence on imports, latest statistics show.

The country's current account deficit is anticipated to close the year at US$2.87 billion, slightly decreasing from US$3 billion the previous year, Zimbabwe's news agency New Ziana reported.

According to data provided in the Interim Medium Term Plan (MTP) progress report, the country is expected to import goods worth US$8.02 billion while exports trail behind at US$5.1 billion.

"The economy is projected to register a current account deficit of US$2.869 million in 2012, representing 22.2 percent of GDP (Gross Domestic Product)," reads part of the interim MTP report.

"In this regard, there is need to grow exports and curtail imports to avoid the adverse effects of widening current account deficit."

The economic blueprint, which was launched last year, runs until 2015 and has set a number targets, the majority of which were not met in the first year of its implementation.

Zimbabwe continues to rely on goods from foreign countries as local industries struggle to improve production, primarily due to lack of cheap financing for retooling and acquisition of raw materials.

With capacity utilisation below 60 percent, local shops continue to import basic goods from countries across the world as they seek to improve profitability.




But local analysts and legislators have urged the government to introduce some protective mechanisms as most of the imports ballooning the current account are 'trivial.'

The imports include tomatoes, potatoes and sweet potatoes which are abundant on the local market, where local farmers struggling to find buyers.

BOP
Source: New Ziana

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