Zambia’s trade surplus of K422 million in December, 2019 owing to reduced imports is a sign of a subdued business climate, says economist Trevor Hambayi.
According to Zambia Statistics Agency (ZSA) data, Zambia recorded a trade surplus in December, 2019, of K422 million, which was a result of reduced imports.
The trade surplus was the country’s fifth highest last year, triggered by huge exports of intermediate goods, mainly copper anodes.
Commenting on the development, Hambayi, said while posting a trade surplus was positive, it did not necessarily reflect a growing economy because imports had drastically reduced in a country whose economy remained import-dependent.
“Having a trade surplus is obviously a very positive thing. I think that this is what the country should be aiming for. Unfortunately, this trade surplus, which is more driven by the fact that we have reduced our imports because of, obviously, the business climate; entities think that they are not going to be generating profit from having to import as we import commodities into the country because we are an import-based country…reduced imports are a sign of a subdued business climate currently afflicting the local economy,” Hambayi said in an interview.
He also observed that if the country kept on recording trade surpluses, it would further reduce Gross Domestic Product (GDP) growth.
“So, in essence, what it is going to do is that it is going to constrict the growth if the economy further; it will reduce GDP growth for the future because, then, we are not generating as much business as we are supposed to. And the counter-measures is that we need to be able to increase our exports to go beyond our standard import levels, but in essence, what this is going to do is that it is going to constrict economic growth in the country,” said Hambayi.
The country’s trade surplus was the fifth highest recorded in 2019 after Zambia posted an over K1 billion trade surplus last January, the highest for the period under review.
A trade surplus means that exports have exceeded imports.