Business / Economy
Zimbabwe exports to SA leap 380%
29 May 2016 at 10:19hrs | Views
THE country's exports to South Africa - its biggest trading partner - spiked by more than 380 percent in March to 1,1 billion rands ($71,4 million, using the average 1:15,4 exchange rate for March) from 222 million rands ($14,4 million) in the same month in 2015, statistics from South Africa's department of trade and industry show.
However, imports at 2,3 billion rands ($149 million) in the same period grew 3,1 percent from a year earlier and outpaced exports by more than $77 million.
Similarly, first quarter exports at 3,3 billion rands ($214 million) were exactly half the value of imports that were absorbed by the local market, raising fears that the appetite for foreign goods is still more than the country's ability to export.
It is estimated that South African products make up more than 60 percent of local supermarket shop shelves.
The latest statistics confirm Zimbabwe as the fifth largest consumer of South African goods in March after Botswana, Namibia, Zambia and Mozambique, which took in goods worth 5,1 billion rands ($331 million); 4,1 billion rands ($266 million); 2,5 billion rands ($162 million) and 2,2 billion rands ($143 million), correspondingly.
The country was also the fourth largest exporter to the Southern African country in the month after Nigeria, Swaziland and Angola.
By comparison, exports from Nigeria, which became the continent's largest economy after displacing its Southern African trading partner, were measured at 2,6 billion rands, or $169 million, in the period.
In fact, South Africa is now the third largest economy in Africa after Nigeria and Egypt.
Government has been trying to stem the rising tide of imports, which has choked the country's productive capacity.
Under tax measures that became effective on September 1, 2015; goods such as cooking oil, maize meal, meat, sugar and flour, which can ideally be produced by local industries, were removed from the travellers' rebate.
The traveller's rebate, a duty-free allowance granted to bona fide travellers, has also since been slashed to $200 from $300.
There were also additional interventions targeted at the textiles, and printing and packaging industries to improve the fortunes of local industry.
The Reserve Bank of Zimbabwe has weighed in as well by introducing an export incentive of 5 percent on the value of exported commodities.
Consultations between monetary authorities and industry have also resulted in a draft priority list for imports, which simply means that importers will find it increasingly difficult to process transactions for goods that are not considered to be a priority.
This has helped narrow the country's trade deficit.
Last month, the Zimbabwe Statistical Agency (Zimstats) noted that imports in the first three months of this year had dropped to $1,3 billion from $1,6 billion in the same period last year.
But exports in the same period tanked 12,6 percent to $626 million from $717 million in 2015.
Worryingly, the importation of sundry items has continued.
During the first quarter of the year, the country imported apples worth $1 million, $317 000 worth of chewing gum and skin care products valued at $3 million.
Mineral water imports also came in at $690 000. Mr Kingstone Khanyile, economist and chief executive officer of Mtilikwe Financial Services, said tax and restrictive measures that are meant to discourage imports are only a temporary measure to provide relief to the market.
"The real question is: does industry have the capacity to be competitive given the current cash shortages and the inherent macro-economic challenges on the economy?
"The macro-economic environment, policy environment and doing business environment has to be attended to.
"Companies will continue to be affected by cash shortages and the exchange control measures that have to be put in place. I don't think that we should try and control the market.
"There is need for targeted measures that are meant to rescue the country's manufacturing sector," said Mr Khanyile.
He noted that policymakers have to be circumspect of the current situation on the global market where commodity prices are falling and the general global economy is slowing.
"There is need for a shift from a one-size-fits-all approach to specific market interventions," added Mr Khanyile.
Presently, industry is fretting about delays at the country's border posts that have been occasioned by new procedures of vetting imports that are being instituted at the behest of the Bureau Veritas, which has been contracted by Government.
Already, there are concerns that bureaucracy at the country's ports of entry are negatively affecting the economy.
In 2012, then vice-president and chief economist of the African Development Bank Professor Mthuli Ncube told The Sunday Mail Business that Government was losing between $30 million and $35 million annually in waiting time and transaction costs as congestion and cumbersome customs procedures took their toll on trade.
However, imports at 2,3 billion rands ($149 million) in the same period grew 3,1 percent from a year earlier and outpaced exports by more than $77 million.
Similarly, first quarter exports at 3,3 billion rands ($214 million) were exactly half the value of imports that were absorbed by the local market, raising fears that the appetite for foreign goods is still more than the country's ability to export.
It is estimated that South African products make up more than 60 percent of local supermarket shop shelves.
The latest statistics confirm Zimbabwe as the fifth largest consumer of South African goods in March after Botswana, Namibia, Zambia and Mozambique, which took in goods worth 5,1 billion rands ($331 million); 4,1 billion rands ($266 million); 2,5 billion rands ($162 million) and 2,2 billion rands ($143 million), correspondingly.
The country was also the fourth largest exporter to the Southern African country in the month after Nigeria, Swaziland and Angola.
By comparison, exports from Nigeria, which became the continent's largest economy after displacing its Southern African trading partner, were measured at 2,6 billion rands, or $169 million, in the period.
In fact, South Africa is now the third largest economy in Africa after Nigeria and Egypt.
Government has been trying to stem the rising tide of imports, which has choked the country's productive capacity.
Under tax measures that became effective on September 1, 2015; goods such as cooking oil, maize meal, meat, sugar and flour, which can ideally be produced by local industries, were removed from the travellers' rebate.
The traveller's rebate, a duty-free allowance granted to bona fide travellers, has also since been slashed to $200 from $300.
There were also additional interventions targeted at the textiles, and printing and packaging industries to improve the fortunes of local industry.
The Reserve Bank of Zimbabwe has weighed in as well by introducing an export incentive of 5 percent on the value of exported commodities.
Consultations between monetary authorities and industry have also resulted in a draft priority list for imports, which simply means that importers will find it increasingly difficult to process transactions for goods that are not considered to be a priority.
This has helped narrow the country's trade deficit.
Last month, the Zimbabwe Statistical Agency (Zimstats) noted that imports in the first three months of this year had dropped to $1,3 billion from $1,6 billion in the same period last year.
But exports in the same period tanked 12,6 percent to $626 million from $717 million in 2015.
Worryingly, the importation of sundry items has continued.
During the first quarter of the year, the country imported apples worth $1 million, $317 000 worth of chewing gum and skin care products valued at $3 million.
Mineral water imports also came in at $690 000. Mr Kingstone Khanyile, economist and chief executive officer of Mtilikwe Financial Services, said tax and restrictive measures that are meant to discourage imports are only a temporary measure to provide relief to the market.
"The real question is: does industry have the capacity to be competitive given the current cash shortages and the inherent macro-economic challenges on the economy?
"The macro-economic environment, policy environment and doing business environment has to be attended to.
"Companies will continue to be affected by cash shortages and the exchange control measures that have to be put in place. I don't think that we should try and control the market.
"There is need for targeted measures that are meant to rescue the country's manufacturing sector," said Mr Khanyile.
He noted that policymakers have to be circumspect of the current situation on the global market where commodity prices are falling and the general global economy is slowing.
"There is need for a shift from a one-size-fits-all approach to specific market interventions," added Mr Khanyile.
Presently, industry is fretting about delays at the country's border posts that have been occasioned by new procedures of vetting imports that are being instituted at the behest of the Bureau Veritas, which has been contracted by Government.
Already, there are concerns that bureaucracy at the country's ports of entry are negatively affecting the economy.
In 2012, then vice-president and chief economist of the African Development Bank Professor Mthuli Ncube told The Sunday Mail Business that Government was losing between $30 million and $35 million annually in waiting time and transaction costs as congestion and cumbersome customs procedures took their toll on trade.
Source - sundaymail
