Manufacturing revival plan targets US$12bn GDP boost

STAFF WRITER

Government is targeting a significant expansion of the manufacturing sector, aiming to raise the sector’s contribution to Gross Domestic Product (GDP) from US$7bn to US$12bn by 2030, while also pushing manufacturing exports to US$1bn from the current US$470m, under the Zimbabwe National Industrial Development Policy 2 (ZNIDP2) 2026–2030.

The ambitious framework, approved by Cabinet this week, is designed to accelerate economic transformation, strengthen industrial competitiveness and support the country’s broader National Development Strategy 2 (NDS2) agenda.

Information, Publicity and Broadcasting Services Minister Dr Zhemu Soda said the policy will address structural weaknesses that have historically undermined Zimbabwe’s manufacturing performance and guide the country’s industrialisation drive over the next five years.

“Consistent with the positive economic trajectory, the ZNIDP 2 seeks to achieve the following specific objectives: to increase the manufacturing sector’s growth rate from an average of 2.2% to over 5% annually by 2030; to raise the sector’s contribution to Gross Domestic Product (GDP) from US$7bn to US$12bn by 2030; to increase manufacturing exports from an average of US$470m to US$1bn by 2030; to improve capacity utilisation from an average 51% to 60% by 2030; and to increase the Volume of Manufacturing Index (VMI) from 149.4 to an average of 180 by 2030,” Dr Soda said.

The manufacturing sector has historically struggled to contribute meaningfully to Zimbabwe’s export earnings due to structural inefficiencies, high production costs and weak competitiveness against imported goods.

These constraints have limited the sector’s capacity to penetrate export markets, leaving many firms largely confined to serving the domestic market.

Even locally, domestically produced goods have often struggled to compete against cheaper imports, largely due to elevated production costs driven by energy constraints, outdated machinery and high financing costs.

Government officials say the new industrial policy framework seeks to address these bottlenecks while positioning manufacturing as a key pillar of Zimbabwe’s long-term economic growth.

The ZNIDP2 follows the implementation of the Zimbabwe National Industrial Development Policy 1 (2019–2023) and the Zimbabwe Industrial Reconstruction and Growth Plan (2024–2025), both of which were aimed at reviving domestic production and rebuilding the country’s industrial base.

The new policy builds on the foundations laid by those initiatives while introducing a more structured and technology-driven approach to industrial growth.

Dr Soda said the policy aims to promote sustainable and diversified industrial development while enhancing productivity and competitiveness across key sectors of the economy.

“The ZNIDP 2 is anchored on six strategic pillars, namely: deepening industrialisation and value chain optimisation; leveraging competitive advantages in mining and agriculture; spatial development initiative nodes and rural industrialisation; enhancing industrial competitiveness and productivity through digital transformation and artificial intelligence integration; inclusive industrialisation and Micro, Small and Medium Enterprises linkages; and strengthening local content development,” he said.

Under the framework, Government intends to prioritise intermediate goods production under the “manufacturing for manufacturing” concept in order to reduce reliance on imported inputs and strengthen domestic value chains.

The strategy also seeks to leverage Zimbabwe’s abundant natural resources to promote beneficiation and value addition in sectors such as mining and agriculture.

Industrial modernisation is expected to play a central role in the policy’s implementation, with authorities targeting retooling, automation and technological upgrades across key manufacturing subsectors.

Government is also planning to facilitate access to concessional financing, promote duty-free importation of capital equipment and expand the development of Special Economic Zones to attract investment into strategic industrial clusters.

Another key component of the strategy involves strengthening the country’s innovation ecosystem through deeper collaboration between industry and academia.

This will include promoting investment in science, technology, engineering and mathematics (STEM) education as well as digital skills development to support industrial transformation.

Dr Soda said the policy will also focus on integrating Micro, Small and Medium Enterprises (MSMEs) into formal industrial value chains while facilitating the graduation of smaller firms into larger enterprises capable of competing regionally and internationally.

Industry and Commerce Minister Mangaliso Ndlovu said the Government’s targets are ambitious but achievable, particularly given the improvements already recorded in manufacturing performance.

“Capacity utilisation of 60%, we believe it’s fair, but again it’s possible to far exceed that, especially looking at the fact that in 2025 capacity utilisation is sitting at 57,3%. But that said, you are correct in that our targets are showing ambition. We are targeting to grow the value of the manufacturing sector from US$7bn to US$12bn,” Ndlovu said.

He added that Government is working closely with the Ministry of Energy and Power Development to ensure that electricity supply keeps pace with the country’s industrial ambitions.

According to Ndlovu, Zimbabwe’s industrial expansion will require a significant increase in electricity generation capacity, with demand expected to exceed 4 000 megawatts before 2030.

Energy supply has long been one of the major constraints affecting industrial productivity, with frequent power shortages forcing many companies to rely on expensive alternative energy sources.

The minister also acknowledged that achieving the ambitious industrial targets will require significant financial resources beyond existing support mechanisms such as the Targeted Finance Facility and the Industrial Development Fund.

Government officials believe that if effectively implemented, the ZNIDP2 could mark a turning point for Zimbabwe’s manufacturing sector by driving investment, strengthening domestic value chains and increasing the sector’s contribution to export earnings and economic growth.

Ultimately, policymakers see the policy as a central pillar in Zimbabwe’s broader strategy to build a modern, competitive and export-oriented industrial economy by the end of the decade.