The Sunday Mail
Livingstone Marufu
The Confederation of Zimbabwe Industries (CZI) has predicted that the country’s trade deficit will narrow by 26 percent to less than $1 billion by year end from $2,3 billion last year due to an increase in exports and gross foreign currency earnings.
As at September 30 this year, the country had imported goods valued at $5,2 billion, compared to exports of $4 billion; a $1,2 billion deficit.
The narrowing of trade deficit is mainly due to Government’s import substitution programme in the agriculture sector and mandatory blending requirements, which now make use of a significant high local content in the form of ethanol produced in Zimbabwe.
CZI president Mr Sifelani Jabangwe told The Sunday Mail Business that 2017 will be a good economic year due to a surge in exports and decrease in imports.
“Given the surge in mining and agriculture exports so far, we expect the trade deficit to go down to around 26 percent by year end. As at September 30, the country’s gross forex earnings stood at $4 billion mainly anchored by agriculture and mining export earnings which surpassed $1 billion.
“We are happy with the Reserve Bank of Zimbabwe’s export incentive scheme, which helped grow export proceeds by 48 percent as at September 30,” said Mr Jabangwe.
“Currently, industry is carrying out some studies to measure the performance of the economy by year end, but early indications notwithstanding cash shortages and liquidity crunch, 2017 economic performance was generally good,” he said.
Government policy interventions that cut across all sectors are aimed at stimulating the economy, which is already on a robust recovery path buoyed by a successful agricultural season.
The country’s growth trajectory is even boosted by the firming global commodity prices.
Mr Jabangwe said, “2018 will be fairly a good year as far as economic growth is concerned on the backdrop of agriculture’s 12 percent growth and continued firming of commodity prices.
“An average projected growth of 3 percent by multilateral institutions is a great improvement from last year’s 0,6 percent growth rate.”
The 2018 Budget Strategy Paper proposes targeting halving the budget deficit to 4 percent of GDP, and subsequently move to a balanced budget by 2020.
Treasury is expecting the revenue for the fiscal year 2017 to surpass the budget target of $3,7 billion, benefiting largely
from the improved economic performance, as well as administrative and policy measures implemented through the 2017 National Budget.
Due to a number of Government initiatives, revenues are expected to continue on a sustained upward trajectory, from $4 billion in 2018 to $4,9 billion in 2020 or even more.
It said the projected revenues of $4 billion for 2018 “are anchored on the full implementation of ongoing measures aimed at improving administrative efficiencies in tax collection.
In the third quarter of 2017, the Zimbabwe Revenue Authority pointed out that, “Cognisant of the volatility in the operating environment and the challenges to effective revenue mobilisation, ZIMRA continues to explore and implement various revenue enhancement measures and other administrative efforts to ensure constant revenue streams to the fiscus.
“The major drive is to increase the level of compliance. Many people and businesses are operating outside the tax net and it is these we want to catch to reduce the burden on those who comply.”
