A 12% decline in imports to US$2,07 billion recorded by Zimbabwe in the first five months of 2015 compared to the same period prior year has been attributed to a shrinking buying power, weakening of the South African rand and overstocking by retailers for the 2015 festive season.
By Taurai Mangudhla
Economist John Robertson said the shrinking demand is as a result of continued company closures and subsequent job losses which contributed significantly to the decline in imports.
“The shrinking economy has resulted in declining disposable income which means there is less expenditure,” Robertson said in an interview, adding the liquidity crisis that led to a cash crisis that was more visible in April meant citizens had less spending power.
The economist said most supermarkets had overstocked ahead of the 2015 Christmas holidays in anticipation of annual bonuses that came late for civil servants.
“Civil servants constitute half the workforce and they are still getting their 2015 annual bonuses,” Robertson said.
“This meant people bought less than anticipated and some shops had to carry over that stock into January or even February hence a decline in imports.”
Economist Vince Musewe said the country should not read too much into the decline given the weakening of the South African Rand.
“It means you can buy more for less,” he said.
Zimbabwe imports most of its products from South Africa.
Former economic planning minister Tapiwa Mashakada said looking at the periodic performance in isolation could be misleading.
“There is no need to read too much into the variance as the gap is small and can be closed in the next three quarters of the year,” he said.
“Nothing has changed to suggest that imports are declining. Capacity utilisation is under 30%. The rand is still weak and local industry is still uncompetitive.”
“In economics that difference is called a time series difference not related to fundamentals,” Mashakada said.
“Periodic correlation does not paint the full picture because of cycles. That’s why we should take a cue from annual data. Besides a weakening South African rand makes imports cheaper,” he added.