ZIMBABWE is saddled with a current account deficit of US$543,3 million this year as major sectors of the economy such as manufacturing, mining, agricultur
e and mining remain depressed. Presenting the 2007 national budget yesterday, Finance minister Herbert Murerwa said the country’s balance of payments (BOP) position continued to be under severe pressure, against a background of declining exports, absence of BOP support, lines of credit and foreign direct investment.
“Reflecting this, a current account deficit of US$543,3 million is projected in 2006 as both manufacturing and mining performance remain depressed,” Murerwa said.
Murerwa said the country was however committed to honouring all its external loan obligations, suggesting that the severe BOP position partly arose from sanctions imposed on the country by the European Union and the United States. This year, mining, manufacturing and agricultural exports were projected to decline by 0,2%, 10,5% and 6,3%, respectively. The under-performanced has resulted in an estimated decline of 6% this year.
“With agriculture and tourism still to fully recover, their contribution to export growth remains limited,” said
Murerwa said imports, which increased marginally by 0,2% last year, driven by increased food, electricity, fuel and manufactured imports, were projected to decline by 1,6% this year against a background of foreign currency shortages.
“On the capital account, net inflows amounting to US$298,4 million was envisaged. Foreign direct investment into mining and some parastatals under the Look East initiatives are the major factors contributing to the positive capital account balance,” Murerwa said.
Due to the total external debt outstanding of US$4,1 billion as at October 31, external payment arrears stood at US$2,2 billion.