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Viewing cable 07PRETORIA3184, SOUTH AFRICA/ZIMBABWE TRADE HOLDING STEADY

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Reference ID Created Released Classification Origin
07PRETORIA3184 2007-09-07 15:55 2011-08-24 16:30 UNCLASSIFIED Embassy Pretoria
VZCZCXRO1328
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSA #3184 2501555
ZNR UUUUU ZZH
R 071555Z SEP 07
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 1675
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHSB/AMEMBASSY HARARE 3552
UNCLAS PRETORIA 003184 
 
SIPDIS 
 
SENSITIVE BUT UNCLASSIFIED 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD ZI SF
SUBJECT: SOUTH AFRICA/ZIMBABWE TRADE HOLDING STEADY 
 
 
1.  (U) Summary.  Despite the economic turmoil in Zimbabwe, 
trade between South Africa and Zimbabwe remains steady making 
the SA/Zimbabwe trade partnership the largest in the Southern 
African Development Community (SADC).  Other African 
countries are beginning to close the gap as SA reaches out to 
new export markets, but Zimbabwe still has a wide margin as 
the number one importer of SA goods.  Exports in petroleum, 
machinery, and vehicles, and imports of platinum and nickel 
have kept trade relations strong.  End Summary. 
 
---------------------- 
STRONG TRADE RELATIONS 
---------------------- 
 
2.  (U) Despite its economic turmoil, Zimbabwe continues to 
maintain its position as SA's number one trading partner in 
the SADC region, with 7.4 billion rand (1.05 billion USD) in 
SA exports and 4.6 billion rand (657 million USD) in imports 
from Zimbabwe during 2006.  Trade between the countries has 
remained steady with SA exports dropping by only 1 percent 
since 2005 and imports from Zimbabwe booming with a 32 
percent increase.  Trade is favorable to SA, which had a 
trade account surplus of 2.78 billion rand with Zimbabwe in 
2006.  Zimbabwe has kept the lead as SA's largest regional 
trade partner, but Zambia and Mozambique are closing the gap. 
 Zambia inched ahead as SA's top regional export market in 
2006, with Mozambique not too far behind.  Meanwhile, 
Zimbabwe remained by a wide margin SA's number one regional 
source of imports in the same year.  The following chart 
indicates the steadiness of trade between the two countries 
(figures in million rand). 
 
SA/Zimbabwe Trade 
 
              Through 
              Jun 2007  2006    2005   2004 
SA Exports     3,959    7,411   7,486  6,182 
SA Imports     3,349    4,633   3,132  2,796 
Trade Balance    610    2,778   4,354  3,386 
 
3.  (U) South Africa's historical trade relations with 
Zimbabwe and SA's fuel refinery capacity have helped to 
maintain its export market with Zimbabwe.  At the same time, 
SA's platinum processing plant and high commodity prices has 
underpinned the growth in imports from Zimbabwe.  SA's top 
three exports to Zimbabwe include petroleum, machinery and 
vehicles. Imports are centered on platinum and nickel. 
 
              Through 
SA Exports    Jun 2007  2006    2005   2004 
Petroleum      668      1,389   1,087  1,448 
Machinery      678      1,191   1,049    962 
Vehicles       633        670     443    417 
 
              Through 
SA Imports    Jun 2007  2006    2005   2004 
Base Metals     1,915   2,188     602    317 
Minerals          866   1,238   1,517  1,262 
 
--------------------- 
SHIFT IN TRADED GOODS 
--------------------- 
 
4.  (SBU) Despite these steady figures, the nature of trade 
has shifted as Zimbabwe's economy has declined.  Zimbabwe's 
agricultural exports, except for tobacco, have imploded. 
According to SAIIA economic analyst Diana Games, Zimbabwe 
exported 300,000 tons of agricultural goods (80 percent 
maize) to SA in 1997, but only tobacco in 2005, which was 
down from 250 million kilos in 1997 to 60 to 70 kilos in 
2005.  SA's import numbers have continued to grow, however, 
as SA imports shifted from agricultural products to ores, 
including platinum and nickel.  High commodity prices helped 
to further increase these import figures. 
 
5.  (U) Exports from SA to Zimbabwe have also changed as 
Zimbabwe's need for manufactured products grew with slow 
downs in local production.  Vehicle and machinery sales have 
expanded 38 percent and 19 percent, respectively, since 2004. 
 The export of these products continues to climb; the level 
of vehicle exports as of June 2007 was almost equal to the 
traded amount for the entire year of 2006. 
 
6.  (U) Media reports indicate that informal trade, which is 
not captured in the above statistics, is also growing rapidly 
as shortages in Zimbabwe become more severe.   Zimbabwean 
buyers have streamed into SA border towns to purchase 
products such as bulk groceries, furniture and "luxury 
goods," such as olive oil, olives and tuna, needed by 
Zimbabwean hotels and lodges. 
Teitelbaum