Government proposes plan to prioritise local production

THE Government has recognised the importance of import substitution in achieving sustainable economic growth.

To this end, it has proposed a Transitional Zimbabwe Industrial Reconstruction and Growth Plan (ZIRGP) for 2024-2025, which highlights the need to prioritise local production of certain goods to support the local industry’s viability.

The targeted products include fertilisers, pharmaceutical products, iron and steel, cement, edible crude oil, buses and trucks, lithium value-addition, and leather.

The ZIRGP emphasises a series of interventions to promote industrial growth, such as increasing local content, optimising value chains, and enhancing intermediate manufacturing.

The plan’s implementation is scheduled to run from last month to December 2025.

One of the major import-substitution priorities is fertilisers. Zimbabwe has an annual fertiliser demand of 780 000 tonnes, with only 30 percent capacity utilisation. Consequently, the country imports fertilisers at a cost of nearly US$333 million per year.

The Government believes that it can produce fertilisers locally using available resources, which will help reduce import costs and positively impact the agricultural and manufacturing sectors.

To support the local fertiliser industry, the Government plans to implement several measures, including timely payments to local manufacturers and suppliers, reliable access to foreign currency, and investment in a new fertiliser plant.

These interventions are expected to increase the fertiliser industry’s capacity from 30 to 45 percent and decrease reliance on imports by 50 percent.

In his presentation on the state of industry and commerce at the recently ended Zanu-PF’s conference in Bulawayo, Minister of Industry and Commerce, Nqobizitha Mangaliso Ndlovu, told delegates that enhancing intermediate manufacturing, utilisation of idle manufacturing infrastructure assets, value chain optimisation, local content strategy implementation, and rural industrialisation is part of ZIRGP focus areas.

Minister Nqobizitha Mangaliso Ndlovu

ZIRGP serves as a transitional framework for aligning industrial policy with National Development Strategy 2 (2026-2030), following the lapse of the Zimbabwe National Industrial Development Policy: 2019-2023 in December last year.

Minister Ndlovu said ZIRGP also addresses immediate challenges such as regulatory and compliance issues, ease of business informalisation, smuggling and counterfeit goods and low export diversity.

He said in the fertiliser sector “there is scope to produce fertiliser locally using available resources and save an average of US$333 million per year in foreign currency”.

In the iron and steel sector, he noted that Dinson Iron and Steel Company (DISCO) has started producing steel billets and will produce up to 600 000 metric tonnes in 2025.

David Whitehead is another giant industry that is coming up and plans to produce 10 million metres of fabric annually.

The pharmaceuticals sector has scope to save the country US$75 million per year in foreign currency.

In the mining sector, he said Zimbabwe through its vast lithium deposits has a unique opportunity to be a leading battery manufacturer in the region and continent.

Minister Ndlovu said the commercial sector plays a pivotal role in the economy and it serves as a key driver of the gross domestic product and employment creation.

Additionally, he noted that services, wholesale and retail trade under commerce is a key economic sector contributing about 60 percent to GDP.

However, he told delegates that the sector faces challenges such as informalisation.

“The sector is also affected by smuggling and counterfeit products that compete unfairly with local goods entering duty-free and avoiding taxes,” he said.

For every job created in the manufacturing sector, there are 4-6 downstream jobs created and according to the ZimStart Labour Force Survey, the sector employment’s contribution to national employment increased from 7,5 percent in 2019 to 9,7 percent last year.

“The thrust going forward is to see many decent jobs being created for the formal manufacturing sector,” he said.

According to the report, the manufacturing sector has the potential to regain its position as a primary driver of economic growth and development.

“The sector has strong connections with key sectors such as agriculture, mining and services.

“A sound industrialisation strategy is thus crucial for structural transformation towards economic growth, development and job creation.”-cronicle