ZIMBABWE recorded a US$1,9 billion trade deficit for the eleven months ending November 2024, an 11% increase from the US$1,7 billion deficit recorded during the same period in 2023.
The widening gap is largely attributed to rising grain and fuel imports, according to official statistics released this week.
Imports outpaced exports, rising by 3%, while exports, which increased by 1%, were mainly commodities.
According to Chenayimoyo Mutambasere, an economist at the Africa Centre for Economic Justice, the deficit can be attributed to factors such as climate change and political instability.
“Firstly, there has been declining productivity in key export sectors driven by low agricultural output, which is heavily impacted by climate change,” she said.
“Additionally, expensive and inadequate factors of production such as limited access to electricity have further hindered production.
“Zimbabwe’s persistent food insecurity has constrained import levels as the country lacks sufficient reserves to meet its needs. This reflects deeper structural issues within the economy that demand urgent attention.
“Economic policies have also fallen short in addressing inflation and stimulating sustainable growth. Since 2023, Zimbabwe has experienced heightened political instability. While the current trade deficit is significant, it could potentially be even higher,” Mutambasere added.
Economist Stevenson Dhlamini said the rising trade deficit could be a result of global inflation, which has seen an increase in the cost of import and a reduction in demand for our exports.
"Agriculture is one of the key contributors to our exports and unfortunately due to the drought that we experienced, our exports declined from that sector. Again the increase in grain imports to reduce food insecurity could have contributed significantly to the increase in trade deficit."
In his 2025 National Budget, Finance, Economic Development and Investment Promotion minister Mthuli Ncube, projected that the decline in foreign currency earnings would exacerbate the current account balance.
This, he cautioned, would worsen Zimbabwe’s trade deficit and put a further strain on macroeconomic stability.
“To mitigate these risks, the government will continue to promote diversification of the economy into sectors such as technology, manufacturing and services, thereby, reducing the dependency on commodity exports and enhancing overall economic resilience,” Ncube said.
According to the statistics agency, Zimbabwe’s major trade destinations in the period under review were South Africa, United Arab Emirates (UAE) and China.
ZimTrade chief executive officer Allan Majuru said the country had surpassed its ambitious 2023 export target of US$7,2 billion, driven by strong growth in key markets such as UAE, South Africa and China among others.
“The quest for discovery of newer markets for Zimbabwean produce has seen Zimbabwean produce doing well in non-traditional markets such as the United Arab Emirates, China, and Italy,” he said.
“Trade with the United Arab Emirates has increased almost tenfold, indicating the fruition of Zimbabwean economic diplomacy efforts.”
