The trade deficit for the nation registered a decline again for the month of July 2019. Last reports announced publicly for February showed a year on year decline and this trend has continued. Sadly there is little to celebrate as the reduction in the deficit is largely attributed to declining imports with little corresponding shift in exports and in the month of July the figure exports rebounded a little from the slump experienced in June.

Some interesting insights can be drawn from the trade figures over the year so far. I will draw your attention to the two noticeable slumps in imports that were experienced in the months of March and July. Both these slumps came in months following major changes to the monetary system. March was affected by the February mid-term monetary policy statement which brought the interbank exchange market and July follows the June 24 announcement that ended the multi-currency era and made the rebranded Zimbabwean dollar the only legal tender.

Historically Zimbabwe’s trade balance has proven to be extremely volatile. This is attributable to seasonal exports and the nations heavy dependence on imports in the face of an economic downturn that has seen production slow.  As such a reduction in imports, especially when caused by monetary confusion, that is not met by a corresponding increase in production is a cause for concern. In the month of July Zimbabwe was gripped by extreme load-shedding due to lack of power production and an inability to access power due to credit blocking from Southern neighbour South Africas power authority Eskom. This lack of power coupled with shortages in diesel and petrol as alternatives further affected production.

On a month on month basis exports were up slightly, rebounding from a previous dip while imports were down after 3 months of consistent increase. The trade deficit now averages US$97 million per month for the year 2019. Imports averaging US$357 million per month while exports averaged US$299 million per month.