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Zimbabwe's trade deficit set to widen despite export growth
25 Oct 2026 at 19:48hrs |
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Zimbabwe's expanding trade volumes and rising mining exports are boosting its participation in international markets, but heavy dependence on imported fuel, machinery and manufactured goods is expected to widen the country's trade deficit over the next two years.
The African Export-Import Bank (Afreximbank), in its September 2026 report, projects total trade to reach about US$26 billion in both 2026 and 2027, up from an estimated US$22,6 billion in 2025.
However, the report warns that rising trade volumes will not necessarily strengthen the country's external position, as imports are expected to continue exceeding exports.
"Zimbabwe's trade profile is characterised by a mining-led export base and a goods and services trade deficit. Total trade increased from US$12,8 billion in 2018 to an estimated US$22,6 billion in 2025," the report said.
Zimbabwe's trade deficit narrowed to US$600 million in 2025, compared with an average of about US$2,4 billion between 2022 and 2024. However, Afreximbank projects the deficit to widen to nearly US$900 million in 2026 and US$1,4 billion in 2027.
Exports are forecast to rise to US$12,6 billion in 2026, supported mainly by mining receipts, particularly gold. Imports, meanwhile, are expected to reach US$13,5 billion as domestic demand, fuel requirements and capital goods purchases remain strong.
The projections highlight the challenge facing Zimbabwe's industrialisation agenda: increasing export earnings while reducing reliance on imported goods and inputs.
Mining remains the country's main source of export revenue, with metals and metal products generating US$1,4 billion in 2025. Gold, platinum group metals, ferro-alloys and other mineral-related products continue to contribute significantly to foreign currency earnings.
The United Arab Emirates was Zimbabwe's largest export destination in 2025, accounting for approximately 38 percent of exports, followed by South Africa at 27 percent and China at 19 percent.
Although these markets provide important outlets for Zimbabwean products, the concentration of exports in minerals leaves the economy vulnerable to international commodity price fluctuations.
On the import side, chemical, industrial and fuel products were the largest category in 2025, valued at US$800 million. South Africa and China together accounted for 57 percent of Zimbabwe's imports, according to the report.
Afreximbank said the country remained reliant on external supplies of petroleum products, industrial inputs, machinery and manufactured consumer goods, exposing businesses to international price shocks and increasing demand for foreign currency.
Expanding domestic manufacturing and strengthening local supply chains could reduce some of these pressures while creating opportunities for businesses to produce goods currently sourced from abroad.
The report identifies mineral processing, reliable energy supplies, improved transport infrastructure and reduced dependence on imported fuel and manufactured products as key factors that will shape Zimbabwe's medium-term trade outlook.
Lithium offers one potential avenue for increasing export earnings by moving beyond the export of raw minerals towards higher-value processed products.
"Lithium offers longer-term export potential, both from existing spodumene output and from the expansion of domestic processing into higher-value lithium products," the report said.
Restrictions introduced in February 2026 on exports of raw minerals and lithium concentrate support the Government's value-addition agenda by encouraging more processing within Zimbabwe. However, the success of this strategy will depend on investment in processing facilities, reliable electricity, transport infrastructure, skills and a commercially viable operating environment.
The report also identifies potential opportunities from the Cabora Bassa Basin oil and gas project following a petroleum production-sharing agreement signed in May 2026 between Zimbabwe and Geo Associates, a majority-owned local subsidiary of Invictus Energy.
If successfully developed, domestic petroleum production could help reduce the country's reliance on imported fuel over the longer term. The scale and timing of any benefits will depend on further exploration, development and commercial production.
Regional trade also remains central to Zimbabwe's economic prospects. Intra-African exports totalled US$2,4 billion in 2025, equivalent to 31,8 percent of global exports, while intra-African imports reached US$5,1 billion, representing 48,3 percent of global imports.
South Africa dominated Zimbabwe's regional trade, accounting for about 85 percent of intra-African exports and 78 percent of intra-African imports. Mozambique and Zambia were the next most important regional partners.
The figures reflect Zimbabwe's integration into southern African supply chains but also point to opportunities to expand local manufacturing and increase the range of goods sold to neighbouring markets.
Afreximbank highlights the importance of the North-South Corridor, which links Zimbabwe with regional markets through key routes including Beitbridge-Harare and Harare-Chirundu. Improvements to roads, railways, border posts and logistics systems under the National Development Strategy 2 could lower transport costs and improve the reliability of trade.
The African Continental Free Trade Area also offers opportunities for Zimbabwean businesses to participate more deeply in regional manufacturing networks.
The report notes that automotive rules of origin approved in 2026 require vehicles and components to contain at least 40 percent African-originating content to qualify for preferential AfCFTA trade terms. This could encourage demand for regionally sourced steel, fabricated components and other industrial inputs.
Ultimately, Zimbabwe's ability to turn rising trade volumes into stronger economic gains will depend on diversifying exports, increasing domestic production and capturing more value from its mineral resources while reducing the cost of doing business.
The African Export-Import Bank (Afreximbank), in its September 2026 report, projects total trade to reach about US$26 billion in both 2026 and 2027, up from an estimated US$22,6 billion in 2025.
However, the report warns that rising trade volumes will not necessarily strengthen the country's external position, as imports are expected to continue exceeding exports.
"Zimbabwe's trade profile is characterised by a mining-led export base and a goods and services trade deficit. Total trade increased from US$12,8 billion in 2018 to an estimated US$22,6 billion in 2025," the report said.
Zimbabwe's trade deficit narrowed to US$600 million in 2025, compared with an average of about US$2,4 billion between 2022 and 2024. However, Afreximbank projects the deficit to widen to nearly US$900 million in 2026 and US$1,4 billion in 2027.
Exports are forecast to rise to US$12,6 billion in 2026, supported mainly by mining receipts, particularly gold. Imports, meanwhile, are expected to reach US$13,5 billion as domestic demand, fuel requirements and capital goods purchases remain strong.
The projections highlight the challenge facing Zimbabwe's industrialisation agenda: increasing export earnings while reducing reliance on imported goods and inputs.
Mining remains the country's main source of export revenue, with metals and metal products generating US$1,4 billion in 2025. Gold, platinum group metals, ferro-alloys and other mineral-related products continue to contribute significantly to foreign currency earnings.
The United Arab Emirates was Zimbabwe's largest export destination in 2025, accounting for approximately 38 percent of exports, followed by South Africa at 27 percent and China at 19 percent.
Although these markets provide important outlets for Zimbabwean products, the concentration of exports in minerals leaves the economy vulnerable to international commodity price fluctuations.
On the import side, chemical, industrial and fuel products were the largest category in 2025, valued at US$800 million. South Africa and China together accounted for 57 percent of Zimbabwe's imports, according to the report.
Afreximbank said the country remained reliant on external supplies of petroleum products, industrial inputs, machinery and manufactured consumer goods, exposing businesses to international price shocks and increasing demand for foreign currency.
Expanding domestic manufacturing and strengthening local supply chains could reduce some of these pressures while creating opportunities for businesses to produce goods currently sourced from abroad.
Lithium offers one potential avenue for increasing export earnings by moving beyond the export of raw minerals towards higher-value processed products.
"Lithium offers longer-term export potential, both from existing spodumene output and from the expansion of domestic processing into higher-value lithium products," the report said.
Restrictions introduced in February 2026 on exports of raw minerals and lithium concentrate support the Government's value-addition agenda by encouraging more processing within Zimbabwe. However, the success of this strategy will depend on investment in processing facilities, reliable electricity, transport infrastructure, skills and a commercially viable operating environment.
The report also identifies potential opportunities from the Cabora Bassa Basin oil and gas project following a petroleum production-sharing agreement signed in May 2026 between Zimbabwe and Geo Associates, a majority-owned local subsidiary of Invictus Energy.
If successfully developed, domestic petroleum production could help reduce the country's reliance on imported fuel over the longer term. The scale and timing of any benefits will depend on further exploration, development and commercial production.
Regional trade also remains central to Zimbabwe's economic prospects. Intra-African exports totalled US$2,4 billion in 2025, equivalent to 31,8 percent of global exports, while intra-African imports reached US$5,1 billion, representing 48,3 percent of global imports.
South Africa dominated Zimbabwe's regional trade, accounting for about 85 percent of intra-African exports and 78 percent of intra-African imports. Mozambique and Zambia were the next most important regional partners.
The figures reflect Zimbabwe's integration into southern African supply chains but also point to opportunities to expand local manufacturing and increase the range of goods sold to neighbouring markets.
Afreximbank highlights the importance of the North-South Corridor, which links Zimbabwe with regional markets through key routes including Beitbridge-Harare and Harare-Chirundu. Improvements to roads, railways, border posts and logistics systems under the National Development Strategy 2 could lower transport costs and improve the reliability of trade.
The African Continental Free Trade Area also offers opportunities for Zimbabwean businesses to participate more deeply in regional manufacturing networks.
The report notes that automotive rules of origin approved in 2026 require vehicles and components to contain at least 40 percent African-originating content to qualify for preferential AfCFTA trade terms. This could encourage demand for regionally sourced steel, fabricated components and other industrial inputs.
Ultimately, Zimbabwe's ability to turn rising trade volumes into stronger economic gains will depend on diversifying exports, increasing domestic production and capturing more value from its mineral resources while reducing the cost of doing business.
Source - The Sunday Mail
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