Business / Economy
Zimbabwe loses $2,6 billion in trade mis-invoicing
09 Jan 2015 at 16:33hrs | Views
Zimbabwe's current trade imbalance may be attributed to trade mis-invoicing, which has prejudiced the country of $2,6 billion through illicit financial outflows between 2003 and 2012, a new report shows.
According to latest statistics from the Zimbabwe National Statistical Agency (ZimStats), Zimbabwe's trade deficit stood at $3 billion between January and November last year, which has been largely attributed to the economy's sustained over-reliance on imports.
However, a new Global Financial Integrity (GFI) - a non-profit, research and advocacy organisation - study entitled Illicit Financial Flows from Developing Countries: 2003-2012 shows that there are deeper issues to the trade imbalance than simply an over-reliance on imports as the country has been losing billons through import and export mis-invoicing.
GFI defines 'illicit financial outflow' as the gross amount of money or capital exiting a country illegally.
The report shows that between 2003 and 2012 Zimbabwe experienced import over-invoicing to the tune of $1,2 billion, while import under-invoicing stood at $1,5 billion.
During the same period, export over-invoicing stood at $7,5 billion, while export under-invoicing stood at $1,4 billion.
Total trade mis-invoicing outflows stood at $2,6 billion.
Economic analyst Ronald Chizenga says there is need for the Government to strengthen control systems at the country's borders.
"The huge figures involved could be pointing to limited capacity at the borders in terms of customs officers who are able to detect intentional mis-invoicing of our import and exports transactions. Hence more training in that respect would be required," he said.
The GFI report shows that Zimbabwe has on average been losing $267 million per each during the 10-year period under review. But in four of the 10 years, the country recorded nil illicit financial flows.
In 2003 the country recorded no illicit financial flows, which was replicated in 2008, 2011 and 2012.
The year 2004 saw Zimbabwe recording $306 million in illicit financial flows (both inflows and outflows), which increased to $354 million in 2005, and further to $1,7 billion in 2006, before declining to $97 million in 2007.
In 2009, illicit financial flows stood at $111 million, which declined to $14 million in 2010.
Illicit financial outflows may have contributed to the present liquidity challenges which are revealed in the lack of and high cost of capital and revenue under-performance.
According to latest statistics from the Zimbabwe National Statistical Agency (ZimStats), Zimbabwe's trade deficit stood at $3 billion between January and November last year, which has been largely attributed to the economy's sustained over-reliance on imports.
However, a new Global Financial Integrity (GFI) - a non-profit, research and advocacy organisation - study entitled Illicit Financial Flows from Developing Countries: 2003-2012 shows that there are deeper issues to the trade imbalance than simply an over-reliance on imports as the country has been losing billons through import and export mis-invoicing.
GFI defines 'illicit financial outflow' as the gross amount of money or capital exiting a country illegally.
The report shows that between 2003 and 2012 Zimbabwe experienced import over-invoicing to the tune of $1,2 billion, while import under-invoicing stood at $1,5 billion.
During the same period, export over-invoicing stood at $7,5 billion, while export under-invoicing stood at $1,4 billion.
Total trade mis-invoicing outflows stood at $2,6 billion.
Economic analyst Ronald Chizenga says there is need for the Government to strengthen control systems at the country's borders.
"The huge figures involved could be pointing to limited capacity at the borders in terms of customs officers who are able to detect intentional mis-invoicing of our import and exports transactions. Hence more training in that respect would be required," he said.
The GFI report shows that Zimbabwe has on average been losing $267 million per each during the 10-year period under review. But in four of the 10 years, the country recorded nil illicit financial flows.
In 2003 the country recorded no illicit financial flows, which was replicated in 2008, 2011 and 2012.
The year 2004 saw Zimbabwe recording $306 million in illicit financial flows (both inflows and outflows), which increased to $354 million in 2005, and further to $1,7 billion in 2006, before declining to $97 million in 2007.
In 2009, illicit financial flows stood at $111 million, which declined to $14 million in 2010.
Illicit financial outflows may have contributed to the present liquidity challenges which are revealed in the lack of and high cost of capital and revenue under-performance.
Source - BH24
