Zimbabwe moves to slash US$1.5bn import bill

Industry and Commerce Minister Dr Mangaliso Ndlovu has announced that government will soon roll out a Local Content Strategy designed to promote the use of locally manufactured raw materials in Zimbabwe's manufacturing sector.

The initiative comes as the country continues to spend an estimated US$1.5 billion annually on industrial consumables. In 2023 alone, imports of crude soya bean oil accounted for US$212 million, highlighting the scale of reliance on foreign industrial inputs. South Africa and China remain Zimbabwe's primary source markets.

Analysts say the true import bill could be even higher, as activities within the informal manufacturing sector are often not fully reflected in official data.

Addressing Parliament this week, Ndlovu said the new strategy seeks to strengthen domestic value chains by incentivising manufacturers to source raw materials locally.

"We will soon be launching what we call the Local Content Strategy, where we are promoting the uptake of local raw materials in the manufacturing processes. This strategy will embed with it fiscal incentives for those manufacturing companies that are using local resources and reaching certain thresholds, beginning with somewhere around 60%," he said.

He noted that the proposal is subject to final approval by the Minister of Finance and is expected to increase demand for products from primary and intermediate producers within Zimbabwe.

Ndlovu also highlighted government efforts to promote mineral value addition, including the suspension of exports of semi-processed minerals to encourage companies to invest in local beneficiation.

In addition, the minister said authorities are targeting sectors with low barriers to entry to stimulate domestic production of intermediate goods.

"We call it manufacturing for manufacturing. We have reserved some of these sectors to our own people, as they are the major manufacturers in these sectors to supply the bigger manufacturing companies," he said.

The policy thrust is being complemented by renewed focus on rural industrialisation following Cabinet's approval of a Rural Development and Industrialisation Committee. The committee, chaired by the Minister of Agriculture, is tasked with consolidating and coordinating initiatives aimed at accelerating industrial growth in rural communities.

Government believes the combined measures will help reduce import dependency, stimulate local production and create jobs across the value chain while enhancing Zimbabwe's industrial competitiveness.