Weakening rand a blessing in disguise for Zimbabwe

The falling rand should be taken as a blessing in disguise by both individuals and Zimbabwean companies, said local analysts.

The rand fell to a new 13 year-low against the dollar early on Wednesday, trading at R12.3775/$, its weakest level since January 2002, according to Thomson Reuters data.

Zimbabwe, which is a net importer of goods from South Africa and uses the much stronger United States dollar, is however set to benefit from the weakening rand.

Zimbabwe's import bill from South Africa in November 2014 stood at $2.5bn.

"If we are to maintain the same quantities our import bill will certainly come down and this will go a long way in easing our current liquidity crunch," said one analyst.

Most of the processed goods in Zimbabwean shops are imported from South Africa, with the country's major retailer OK Zimbabwe importing more than 70% of its groceries from South Africa.

Its major competitor, TM Supermarkets, also sells mostly imported goods as it is partly owned by South African retail giant Pick n Pay.

Another analyst, Jerome Negonde, said the benefits of the falling rand might not filter down to the final consumer "as most businesses tend to enjoy much of the profits".

Said Negonde: "If you look at the previous reduction of oil prices on the global market, nothing happened to the local economy on prices. In that regard this fall in the rand might not benefit local consumers."