Zimbabwe moves to bankroll Lancashire Steel revival

The Government of Zimbabwe is preparing to deploy state-backed industrial financing to revive Lancashire Steel, signalling a strategic push to rebuild domestic manufacturing capacity and reduce dependence on imported wire products.

Industry and Commerce Minister Mangaliso Ndhlovu said Lancashire Steel, a subsidiary of the troubled state-controlled Zisco Steel, is being prioritised for possible support from the Industrial Development Fund. Officials describe this as part of a broader effort to convert upstream steel output into downstream industrial growth.

"Lancashire Steel, we are prioritising them. We think they are likely to get some bit of funding from the Industrial Development Fund because the wire bars they need are already coming from Manhize," Ndhlovu said.

The initiative reflects a deliberate policy shift, moving beyond exporting raw materials while importing finished industrial goods. Wire products, essential for construction, mining, agriculture, and infrastructure, remain one of Zimbabwe's most import-dependent industrial sub-sectors. This dependency has exerted pressure on scarce foreign currency and heightened vulnerability to regional supply shocks.

"That's the raw material that Lancashire Steel needs to then process different types of wires for our country," Ndhlovu added. "It's still a huge import-dependent sub-sector that we want Lancashire Steel to come in and play."

The availability of wire rod from the Chinese-backed Manhize Steel Plant is transforming Zimbabwe's industrial landscape. For the first time in years, local processors have access to credible upstream steel inputs, provided they can mobilise capital, modernise equipment, and compete with cheaper imports from South Africa and Asia.

Lancashire Steel, once a cornerstone of Zimbabwe's industrial ecosystem, had declined alongside Zisco Steel, reflecting two decades of deindustrialisation. Ndhlovu said the company now has a "bigger opportunity" to re-enter the market in 2026 as government policy pivots toward import substitution and value addition.

"So Lancashire Steel, as a subsidiary of Zisco Steel, has a bigger opportunity this year to come in here," he said.

Steel is being positioned as a strategic lever for industrialisation, particularly as Zimbabwe drives an infrastructure-led growth agenda under Vision 2030. Demand for wire products is expected to rise alongside road construction, housing, mining, and power transmission projects.

Ndhlovu emphasised that government support would be catalytic rather than a blanket bailout.

"But again, the space is open. There are other private investors coming in. We always have to promote competition because it is through that that products get to the consumers cheaper," he said.

The Industrial Development Fund, administered through the Venture Capital Fund, is being structured to provide conditional, carefully monitored support for projects aligned with national priorities, such as beneficiation, import substitution, and export development.

"They have to apply, there is a rigorous process. Remember this is administered through the Venture Capital Fund. We can only recommend that it is aligned with our national priorities because often times companies have used government funds and they think they are for free. We have put strict safeguards to make sure that these monies are repaid," Ndhlovu said.

Zimbabwe remains largely excluded from international capital markets due to external arrears and a high debt burden, leaving limited fiscal space for costly industrial subsidies. Nonetheless, the emergence of domestic wire rod supply from Manhize Steel Plant near Mvuma in the Midlands could materially improve the economics of local processing.

If Lancashire Steel secures financing, modernises operations, and scales production, Zimbabwe could begin displacing imports, conserving foreign currency, and laying the foundations for a competitive regional steel value chain.