By Alois Vinga
RAW materials in the form of minerals, cotton, among others continue to dominate the country’s exports indicating an urgent need to revamp the local manufacturing capacity.
The latest Reserve Bank of Zimbabwe’s (RBZ) Monthly Economic Review for the period ended September 2020 shows that exports for the month under review were dominated by nickel ores and concentrates 24%, nickel mattes 21%, gold 17%, tobacco 11 % and platinum 6%.
Industrial diamonds, ferro-chromium, cane sugar, ginned cotton were among the top export lists during the period.
“The bulk of the country’s exports went to South Africa, accounting for about 39.7%, followed by Mozambique (11.3%) and the United Arab Emirates (9.6%). The country’s merchandise exports rose by 2.4%, from US$389.3 million in August to US$398.8 million in September 2020,” the reports said.
The September 2020 outturn was 5.4% higher, compared to the corresponding month in 2019.
The recovery in commodity prices from the coronavirus pandemic spurred the country’s export earnings.
A perusal of previous RBZ reports published for most part of the year sustains a record of raw materials dominated export list.
During the month under review, trade developments resulted in the widening of the country’s trade deficit, from US$15.6 million in August 20203 to a deficit of US$42.6 million in September 2020.
The existence of an incapacitated manufacturing sector which has seen industry operating below capacity for more than a decade remains a major barrier towards the value-added exports.
Last year, the government launched the Zimbabwe National Industrial Policy), which is expected to help transform the economy through value addition, increasing employment levels and promoting a culture of savings.
Coupled with the RBZ foreign exchange auction which has been credited by companies for achieving exchange rate stability, optimism remains high on the possibility of industrial transformation.
However, limited Foreign Direct Investment, lack of capital access from global lenders among other limitations places the country’s industry in a challenging position.