Summary
- Zimbabwe’s merchandise imports were projected to reach $9.08 billion in 2024, with exports close to $7.4 billion, resulting in a trade deficit of close to $1.7 billion.
- Fuel and vehicle imports accounted for a significant portion of the import bill, with $1.58 billion spent on fuel imports in 2023 and $664 million on motor vehicle imports.
- There is potential for reducing the import bill by accelerating the adoption of electric vehicles, which can help offset fuel imports through locally generated electricity.
- Zimbabwe spent $180 million on electricity imports in 2023, which was projected to increase to $220 million in 2024, highlighting the need for sustainable energy solutions like solar power.
- For the amount spent on electricity imports each year, 10 25 MWp solar PV plants could be constructed in less than a year, adding 250 MWp of solar PV to Zimbabwe’s energy mix in a short time.
Article
Zimbabwe is facing a significant trade deficit, with merchandise imports projected to be $9.08 billion in 2024 while exports are estimated at $7.4 billion, resulting in a $1.7 billion deficit. A major contributor to this deficit is the import bill for fuel and motor vehicles. In 2023, the country spent $1.58 billion on fuel imports and $664 million on vehicle imports. The majority of vehicles imported are used cars from countries like Japan and the UK, contributing to over 25% of the import bill. To reduce this import bill, Zimbabwe could accelerate the adoption of electric vehicles, which would help offset the need for imported fuel.
The country’s electricity import bill is also a significant expense, reaching $180 million in 2023 and projected to increase to $220 million in 2024. Zimbabwe has been experiencing electricity generation shortfalls due to aging thermal power plants and low water levels in hydropower plants. To address this, there is a push towards increasing solar energy generation through utility-scale and distributed solar plants. By investing in solar power infrastructure, Zimbabwe could reduce its reliance on imported electricity and eventually eliminate the electricity import bill.
One example of harnessing local resources for sustainable electricity generation is the construction of a 25 MWp solar PV plant just outside Harare. This plant, completed by Centragrid with funding from local pension funds and investment arms, is now feeding electricity into the grid. For the amount spent on electricity imports annually, Zimbabwe could potentially build multiple similar solar plants, adding significant renewable energy capacity to the grid in a short period. This local investment in solar power could help reduce electricity imports and contribute to a more sustainable energy mix for the country.
The combination of solar energy generation and electric vehicle adoption presents a unique opportunity for Zimbabwe to address its trade deficit and energy challenges. Cheaper solar panels and batteries make it feasible to couple solar power with EV charging, offering a cost-effective and sustainable solution for powering electric vehicles. With lower import duties for electric vehicles compared to internal combustion engine vehicles, the time is ripe for Zimbabweans to embrace solar energy and electric transportation. This transition to renewables and EVs could not only help reduce import bills but also contribute to a cleaner and more sustainable future for Zimbabwe.
Overall, by focusing on import substitution initiatives such as promoting electric vehicle adoption and expanding solar energy generation, Zimbabwe could work towards reducing its trade deficit, decreasing electricity imports, and promoting a more sustainable economy. The examples of solar power plants and electric vehicle affordability highlight the potential for leveraging local resources to drive a cleantech revolution in the country. With the right investments and policies, Zimbabwe could transition towards a more sustainable trade environment with a growing surplus, benefiting both the economy and the environment.
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