Zimbabwe's foreign currency reserves can last only two months on average, a financial investment expert has said.
Ritesh Anand, deputy CEO of UK-based Crown Agents Investment Management, which manages foreign currency reserves for numerous central banks in Africa and the Caribbean, said Zimbabwe's reserves had been low for the past 20 years.
"For 15 or 20 years, perhaps, the country has maintained one to two months' cover, which could be less than $200m as it continues to suffer a huge trade deficit because it imports more than it exports," said Anand.
He was speaking on Wednesday at a forum of central bank deputy principals, permanent secretaries and deputy governors organised by the Macroeconomic and Financial Management Institute of Eastern and Southern Africa, in Victoria Falls.
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Since adopting an "austerity for prosperity" policy, the country's import bill has fallen to an average of $336.8m a month from a high of $494.7m in December, according to Zimbabwe National Statistics. The country's main imports are fuel, electricity and wheat.
"To grow reserves, countries need to build a positive trade surplus as well as create a stable and conducive micro environment to attract investment," said Anand.
For the past two decades, Zimbabwe has suffered a lack of investment, which the current administration is trying to fix with its foreign policy of engagement.
But a lack of transparency, independence and good governance will continue to haunt the country's central bank, economists warned.
In the region, Botswana is considered a middle-income economy because it enforces good corporate governance, whereas Zimbabwe is still locked in low-income status.
It hopes to achieve middle-income status by 2023.
Kenya's reserves amount to $9bn, while Nigeria boasts reserves of $45bn, according to figures provided by Crown Agents Investment Management.
SA is not a member of the forum.
The summit was organised to ensure that central banks maintain independence and manage their countries' reserves efficiently...