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EXPORTS RISE BY 1.3% TO E8.4BN

By KWANELE DHLADHLA | 2021-04-07

The trade balance reflected a surplus of E725 million in the last quarter of 2020 (Q4) which was 51 per cent lower than the E1.5 billion surplus recorded in the preceding quarter. This reflected a reduced momentum in exports. According to the ministry of economic planning and development economic bulletin’s quarterly report for the period between October and December 2020, it was reported that in 2020 Q4, total merchandise exports were at E8.4 billion, which reflected a marginal 1.3 per cent growth compared to 2019 Q4. This was mainly attributed to slower increases in the external demand of “miscellaneous edibles”, “forestry and related products” as well as textile exports, which grew by 5.3 per cent, 11.6 per cent and 12.3 per cent, respectively. However, other major export commodities such as “beverages”, “food processing”, “printing and stationery” as well as “sugar” declined in the review period. destinations In terms of export destinations, the Southern African Customs Union (SACU) region remained a major destination for the country’s exports as 69 per cent of these were absorbed by the region. Other key export destinations were SSA region (29 per cent), the EU (one per cent), Asia (0.4 per cent) and the North America regions (0.2 per cent). It was disclosed that merchandise imports also grew by 4.8 per cent on a year-on-year comparison and were recorded at E7.6 billion in 2020 Q4 compared to E7.3 billion in the corresponding period of 2019. “This was mainly due to a significant increase in “food”, “construction”, “Other intermediary consumption” as well as “pharmaceutical” imports which grew by 32.3 per cent, 14.4 per cent, 6.8 per cent and 48.3 per cent, respectively,” added However, it was pointed out that “fuel and energy” (-13.9 per cent), “capital goods’’ (-10.6 per cent) and “motor vehicles” (-19.6 per cent) imports fell in this period. “The SACU region remained the major source of imports for the country as about 73 per cent of these were sourced from the region, particularly RSA, which was relatively similar to the corresponding period of 2019,” it was added.

........................Private sector credit hikes to E15.8 billion

Private sector credit saw an increase of 6.8 per cent over the quarter and 6.7 per cent annually. In the ministry of economic planning and development economic bulletin, I was explained that the quarter-to-quarter increase in private sector credit was evident in all its components, while the year-on-year comparison showed a decline of 2.2 per cent in the credit to businesses component only. “This decline was attributed to ‘agriculture and forestry (-6.1 per cent); ‘mining and quarrying’ (-97.3 per cent); ‘construction’ (-15.1 per cent); ‘transport and communication’ (-8.2 per cent); ‘community, social and personal services’ (-43.4 per cent) and ‘real estate’ (-11.6 per cent),” read the bulletin in part. Increases in manufacturing (11.9 per cent); distribution and tourism (8.7 per cent) as well as other businesses (58.2 per cent) were not sufficient to counteract the contraction. On overall credit extended in the economy, credit to households cushioned the observed decline, growing by 6.4 per cent over the quarter and 9.1 per cent on a year-on-year basis. It was mentioned that the quarterly increase was underpinned by a rise in other unsecured personal loans (21.6 per cent) and motor vehicle finance (0.3 per cent) while housing loans declined slightly (-0.9 per cent). It should be mentioned that the total credit extension grew in line with the accommodative monetary stance. In line with the subdued inflationary pressures during the period under review, monetary policy was maintained accommodative, with the discount rate maintained at 3.75 per cent in 2020 Q4 compared to 6.5 per cent in 2019 Q4. Similarly, the prime lending rate followed the same trend as the discount rate, being maintained at 7.25 per cent 2020 Q4 compared to 10 per cent 2019 Q4.

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