Manufacturing Leads Zimbabwe’s Growth

Zimbabwe’s manufacturing sector now leads GDP growth with US$1.4 billion in new investments (image source)

Zimbabwe’s manufacturing sector has overtaken mining and agriculture to become the single largest contributor to GDP after attracting more than US$1.4 billion in new investments in 2025 — a shift the Finance Minister says underscores renewed investor confidence in industrialisation and import substitution policies.

The investments, directed at steel, cement, pharmaceuticals, food processing, and packaging, have pushed manufacturing’s share of GDP to 15.3 percent, ahead of mining at 14.5 percent and agriculture at 9.3 percent, according to figures highlighted in the 2025 Mid-Term Budget Statement and reiterated by ministers at recent public addresses.

Policy makers say the inflows are already expanding production capacity, creating jobs, and reducing import bills as local firms scale up value-addition. Finance Minister Professor Mthuli Ncube told delegates at the ZANU-PF Annual People’s Conference in Mutare that the surge signals success for the Second Republic’s industrial reforms and Vision 2030 targets.

Industry analysts note that foreign joint ventures and domestic capital have concentrated on agro-processing, construction materials, and pharmaceuticals because these sectors offer both import-substitution upside and export potential. Analysts point to targeted incentives, tax breaks for capital equipment, and priority foreign-exchange allocations for manufacturers as key policy drivers.

“These investments are driving structural transformation, import substitution, and job creation as the nation accelerates towards Vision 2030,”

— Professor Mthuli Ncube

Private-sector voices, however, caution that the gains remain fragile while liquidity constraints and energy reliability persist. Manufacturers require predictable power and access to foreign currency to sustain expansion.

Historically, Zimbabwe’s industrial base was strong but weakened during decades of underinvestment, sanctions, and macroeconomic instability. The current rebound — aided by focused incentives and a rebound in regional demand — seeks to rebuild that base by upgrading capacity in strategic value chains. Observers compare the 2025 investment wave to earlier post-reform spikes, noting the difference this time is a more diversified investor mix and a stronger emphasis on downstream processing.

Key vulnerabilities include foreign-exchange shortages for imported inputs, VAT and refund backlogs that squeeze working capital, and the need for reliable electricity and logistics. Questions remain on whether the recent capital inflows will translate into long-term productivity gains, higher wages, and broader industrial deepening rather than short-term capacity boosts.

If policy consistency, energy reforms, and clearer forex rules persist, manufacturing may sustain its lead and anchor Zimbabwe’s structural transformation. Stakeholders will watch the 2026 national budget for measures to cement support for industry and expect Treasury and the Reserve Bank to publish clearer mechanisms for forex allocations and VAT refunds to ensure firms can convert investment pledges into lasting output.