Business / Economy
Chinamasa's budget shows that Zim is a consumptive nation
07 Dec 2015 at 05:45hrs | Views
Bulawayo based policy analyst Batler Tambo has said the budget for 2016 announced by Finance Minister Patrick Chinamasa recently shows that Zimbabwe has a consumptive economy with no possible growth expected.
"The budget also shows that we are a consumptive economy which does not export much but if we are to grow this economy then we have to export and generate revenue," Tambo said.
"For instance, during the period January to October 2015, exports were US$2 billion, dominated by gold, tobacco, nickel and diamonds while imports stood at US$5billion comprised mainly of fuel, medicines, maize and vehicles, among others during the same period."
He said the subdued exports in 2015 will culminate in a trade deficit of US$2.9 billion, against US$2.7 billion in 2014.
"The large trade deficit reflects, among other factors, the country's over-reliance on foreign goods, most of which can be produced locally," said Tambo.
"These goods include grains, foodstuffs, chemicals and pharmaceutical products, among others. Furthermore, the continued depreciation of the rand against the US dollar has undermined the competitiveness of our exports and made imports from Zambia and South Africa cheaper than Zimbabwean made products."
The policy analyst said the rand lost over 13% of its value against the US dollar since January 2015, a development which has also seen Zimbabweans increasingly preferring the US dollar over the rand in conducting business transactions.
"The budget also shows that we are a consumptive economy which does not export much but if we are to grow this economy then we have to export and generate revenue," Tambo said.
"For instance, during the period January to October 2015, exports were US$2 billion, dominated by gold, tobacco, nickel and diamonds while imports stood at US$5billion comprised mainly of fuel, medicines, maize and vehicles, among others during the same period."
"The large trade deficit reflects, among other factors, the country's over-reliance on foreign goods, most of which can be produced locally," said Tambo.
"These goods include grains, foodstuffs, chemicals and pharmaceutical products, among others. Furthermore, the continued depreciation of the rand against the US dollar has undermined the competitiveness of our exports and made imports from Zambia and South Africa cheaper than Zimbabwean made products."
The policy analyst said the rand lost over 13% of its value against the US dollar since January 2015, a development which has also seen Zimbabweans increasingly preferring the US dollar over the rand in conducting business transactions.
Source - Byo24News
