South Africa and Zimbabwe trade – how does it work?
South Africa and Zimbabwe are both members of SADC and of the SADC Free Trade Area. They also have a bilateral trade agreement dating from 1964. South Africa remains one of the most important trading partners for Zimbabwe; with Zimbabwe importing a very broad range of goods from South Africa, including fuels, capital equipment, motor vehicles and many other consumer products.
The average trade deficit for the period between 2009 and 2011 was US$2.58 billion. To control the growth of the trade deficit Zimbabwe has employed a number of interventions which include export promotion as can be seen by the increase in exports for the period between 2012 and 2014. In addition to export promotion, Zimbabwe introduced a number of measures to discourage imports.
The Zimbabwe Ministry of Industry and Commerce has allocated TWO days per week for import permits – Wednesday and Thursday. These days are up on a notice in their offices. It is now taking between 10-14 days to obtain an import permit, from the date of application, and each import license costs $30.00. A trader is required to apply for an import license for each product he/she would be importing. Therefore, giant retailers which import various commodities requiring import licenses would handle large volumes of documentation. These import licenses for the above items are required even if goods are being imported under customs or trade agreements.
While the official statistics reflect a decline in imports and narrowing of the trade deficit, investigations by the local press have revealed that the measures have caused an increase in smuggling as people resort to informal crossing points to import their goods.
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