Zimbabwe's new factories choked by cash shortages

THE Confederation of Zimbabwe Industries (CZI) Manufacturing Sector Survey 2025 has revealed a surprising contradiction within the country's industrial sector, showing that while most manufacturers are operating relatively modern plants, production remains constrained by broader structural challenges.

The survey found that capacity utilisation increased by four percentage points to 56% in 2025, even though 59% of manufacturers are operating plants that are 10 years old or less.

The findings challenge the long-standing perception that Zimbabwe's manufacturing sector is largely dependent on outdated machinery and ageing infrastructure. Instead, they suggest that many firms have invested significantly in modernising their operations in recent years.

However, the modest increase in capacity utilisation despite substantial investment in newer plants indicates that equipment modernisation alone is not enough to unlock higher production levels.

Presenting the survey findings, Confederation of Zimbabwe Industries chief economist Cornelius Dube said the results paint a more nuanced picture of Zimbabwe's industrial landscape.

"Remember, when people talk about the manufacturing sector in Zimbabwe, they talk about old plants, antiquated plants," Dube said.

He noted that 59% of main manufacturing plants are no more than 10 years old and show evidence of active upgrading, while 4% of plants commissioned in 2025 are brand-new facilities equipped with modern technologies.

"So, what is happening? Some companies are very old, but they've been launching new plants," Dube explained.

"The company may be old, but they have launched a new plant last year. So if a company is 100 years old, but they have launched a new plant last year, we are saying the age of their main plant is only one year old."

The survey also showed that a small proportion of manufacturers continue to operate very old facilities. Around 4% of plants are more than 50 years old, while approximately 1.2% of firms are operating plants that are up to 87 years old.

Despite ongoing investments in technology and infrastructure, manufacturers continue to grapple with limited access to affordable capital, which remains one of the sector's biggest obstacles.

Zimbabwe's tight monetary policy environment has made borrowing increasingly expensive, forcing many firms to rely on internally generated foreign currency revenues to fund capital expenditure and expansion projects.

According to market analysts at IH Securities, lending rates ranging between 40% and 47% remain prohibitively high for many businesses, particularly in manufacturing and agriculture.

"Lending rates of between 40% and 47% are prohibitively expensive for corporates, particularly in manufacturing and agriculture, and the ZiG's transactional footprint remains limited despite official claims of 40% to 45% usage," IH Securities noted.

The research firm said the Reserve Bank of Zimbabwe's tight monetary stance remains justified for now but suggested that a gradual easing cycle could become possible if inflation remains under control and foreign currency reserves improve.

The survey's findings suggest that Zimbabwe's industrial challenges extend beyond outdated equipment and point to deeper structural constraints, including access to finance, energy reliability, market demand and broader economic conditions.

Meanwhile, government says it is pursuing a strategy aimed at strengthening industrialisation through targeted support for mineral and agricultural value chains.

Industry and Commerce Minister Nqobizitha Ndhlovu said industrialisation, mining and agricultural transformation remain central pillars of Zimbabwe's development agenda.

"Industrialisation, mining and agricultural transformation are mutually reinforcing pillars of economic development," Ndhlovu said.

"It is, therefore, no coincidence that government has identified 15 priority agro-industrial value chains for targeted support and development."

He added that government has also identified several mineral-based value chains that will receive targeted support through collaboration between the ministries responsible for mining, industry and finance.

According to Ndhlovu, authorities are implementing a strategy focused on mineral beneficiation, value addition and industrial development in an effort to maximise the economic benefits derived from Zimbabwe's mineral wealth.

"Government is taking a deliberate and strategic approach to assessing all minerals being extracted in the country and developing targeted interventions to maximise local value addition," he said.

The strategy has also informed the establishment of special economic zones linked to specific mineral endowments, creating opportunities for downstream manufacturing industries.

At present, however, Zimbabwe's mining sector continues to rely heavily on imported machinery, equipment, technologies and consumables, highlighting opportunities for local manufacturers if industrial capacity and competitiveness can be strengthened.

The latest survey suggests that while Zimbabwean manufacturers have made notable progress in modernising their operations, addressing liquidity constraints and broader structural challenges will be critical if the sector is to significantly increase output and play a larger role in driving economic growth.