Major mineral exports for Zimbabwe include gold, diamonds, platinum and chrome.
“Zimbabwean exports are particularly reliant upon precious metals, notably gold and diamonds, which accounted for 31.3 percent of total merchandise exports in 2015. While our commodities team expects most commodity prices to stabilise over 2016, we do not believe this will be sufficient to offset a large and longstanding trade deficit (but) the current account deficit will be somewhat protected due to a fall in imports stemming from weak domestic demand and a shortage of US dollars,” the report said.
BMI said gold prices averaged $1 669/oz in 2012 and it is unlikely that the prices would rebound to these levels anytime soon.
At the same time, the diamond market is expected to remain weak following developments in China, were a government crackdown on the spending habits by the elite could affect demand, said BMI, noting, however, that the biggest hurdle against exports would be drought.
“While a climate of persistently low commodity prices will certainly weigh on Zimbabwe’s export outlook, their impact will be relatively small when compared to the effects of an ongoing drought. The onset of El Nino in 2015 left much of Southern and Eastern Africa devastated by a lack of rain, ruining harvests across the region. As a result, tobacco production is expected to fall by as much as 15 percent over 2016.”- The Source
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