Zimbabwe’s export earnings fell significantly in February 2025, dropping by 21.4% from US$652 million in January to US$512.6 million. The decline was driven by sharp reductions in revenues from key commodities, including gold, tobacco, diamonds, and ferroalloys, exposing deep vulnerabilities in the country’s export sector, according to the latest data from ZimStats.
By Ryan Chigoche
Gold, the country’s top export, which accounted for 42.3% of total exports, saw earnings contract from US$291 million in January to US$216 million in February, despite global gold prices being on the rise. This sharp decline points to persistent smuggling and under-reporting within the sector, long-standing issues that continue to erode Zimbabwe’s foreign currency inflows.
Tobacco, a vital cash crop making up 15.8% of Zimbabwe’s exports, also experienced a steep fall, with earnings dropping from US$120 million to US$83 million. The decline is likely linked to unfavorable weather conditions and inadequate support for farmers. Meanwhile, ferroalloy exports fell from US$22 million to US$14 million, and diamonds recorded a downturn from US$15 million to US$10 million. Power shortages and a lack of investment in value addition remain major constraints on these industries.
With exports contracting sharply and imports remaining high, Zimbabwe’s trade deficit widened to US$217.7 million in February, marking a staggering 124.2% increase from the US$97.1 million recorded in January. The growing deficit highlights structural weaknesses in the economy, where foreign currency earnings are failing to keep pace with the country’s rising import bill.
Imports decreased slightly by 2.5% from US$749.2 million in January to US$730.3 million in February. However, spending on petroleum products, motor vehicles, machinery, and wheat remained elevated, indicating continued reliance on imported goods.
Petroleum oil, the leading import, rose from US$117.8 million to US$129.9 million, reflecting Zimbabwe’s ongoing lack of refining capacity and growing fuel demand. Imports of transport vehicles increased from US$17 million to US$21 million, while industrial machinery imports rose from US$9 million to US$15 million, signaling efforts to improve infrastructure and mining operations, albeit at a high cost.
The sharp decline in export earnings highlights deep-rooted structural weaknesses in Zimbabwe’s economy. The gold sector continues to suffer from illicit flows, with estimates suggesting that up to 20% of production is lost through informal channels. In the tobacco sector, contract farming models often limit farmers’ ability to reinvest in production, affecting long-term sustainability.
Chronic power shortages have further weakened the export sector, disrupting mining and manufacturing activities and making Zimbabwe’s commodities less competitive in global markets. The economy’s heavy reliance on imports for essential goods also underscores the need for policy interventions to boost local production and reduce dependency on foreign suppliers.
To address these challenges, economic experts recommend key reforms. Reducing export retention rates from 30% to 10% could increase liquidity for exporters, encouraging reinvestment in production. Expanding renewable energy infrastructure and upgrading existing power facilities would help stabilize mining and manufacturing output. Additionally, curbing gold smuggling through enhanced oversight, including digital tracking systems, could recover lost revenue and strengthen formal trade channels.
With export earnings under severe pressure and the trade deficit widening, Zimbabwe faces growing economic strain. Immediate reforms are needed to restore the country’s export competitiveness, support key industries, and prevent further deterioration in foreign currency earnings.
