It is reported that Zimbabwe, Zambia’s neighbor registered a trade deficit of more than USD 1 billion in the last 3 months to March 2011 as imports surged over exports.

According to statistics by the ministry of finance in Zimbabwe, Q1 exports were USD 2.7 billion while imports stood at just over USD 4 billion. The deficit was in excess of USD 1.3 billion in the first 3 months of 2011.

Mr Tendai Biti finance minister of Zimbabwe said that the trade imbalance was chiefly attributed to poor performance of the industry and Zimbabwe has largely remained a supermarket economy.

He projected that the manufacturing sector would grow by 5.7% this year while capacity utilization will rise to 50%. The major sources of imports to Zimbabwe are South Africa, the United States of America, China, Mozambique and the UK. South Africa has remained the country's largest trading partner.

Economists however contend that export market competitiveness by local industries has dramatically declined as a result of high production costs accelerated by capital constraints and high utility charges. Production costs remain high as companies are using obsolete equipment. Zimbabwe is emerging from a sanctions induced decade of economic decline in which the economy contracted by more than 50% from a 1996 to 1998 peak of USD 9 billion to about USD 2.5 billion in 2008.

According to data, the economy is expected to grow 9.3% this year, he third year in a row it has improved. The economy registered a gross domestic product growth rate of 63% in 2009 and 8.1% in 2010.

The International Monetary Fund has commended Zimbabwe's steady progress towards economic recovery, noting that efforts to strengthen policies and favorable shocks had buoyed the economy.

(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)