ZIMBABWE’S industrial sector is grappling with rising operational pressures as increases in fuel, fertiliser and other key inputs drive up production and logistics costs across multiple sectors, the Confederation of Zimbabwe Industries (CZI) has said.
Despite inflation remaining in single digits — providing some planning stability for businesses — CZI warns that the relative calm has been undermined by high borrowing costs, limited access to credit and mounting production expenses.
In its Zimbabwe Industry January to March Newsletter, the business lobby group said the first quarter of 2026 was shaped by significant policy shifts, market developments and external factors that affected industrial performance.
These included tax reforms, changes in customs procedures, and adjustments in indigenisation regulations.
While government has moved to ease the cost of doing business through tax and regulatory reforms — including scrapping the cash withdrawal levy and reviewing gold royalties — industry players say rising input costs, tight liquidity conditions and policy adjustments continue to weigh on production and investment decisions.
CZI noted that government revised several proposed tax measures following engagement with industry, including the repeal of the cash withdrawal levy, adjustments to gold royalty structures, and changes to tax clearance requirements.
It added that efforts to reduce regulatory costs are ongoing, with planned cuts in licence fees and vehicle registration charges expected to lower compliance expenses once formalised into law.
“Government revised several proposed tax measures following industry engagement, including the repeal of the cash withdrawal levy and adjustments to gold royalties and tax clearance requirements,” CZI said.
The report also highlighted tighter indigenisation rules under Statutory Instrument 215, which require firms in reserved sectors to reassess ownership
structures and investment strategies.
On trade facilitation, the Zimbabwe Revenue Authority (Zimra) introduced a payment-after-assessment system aimed at improving transparency in customs administration, while a directive mandating all government payments in ZiG has introduced new liquidity management challenges in an economy still largely dollarised.
CZI further noted that Zimbabwe’s engagement with China under a framework agreement has progressed, with discussions focusing on trade facilitation, supply chain strengthening and industrial development.
CZI chief executive Sekai Kuvarika said the organisation’s focus during the quarter was on practical engagement with institutions such as Zimra, the Industry and Commerce ministry and local authorities to close implementation gaps and support business continuity.
She said these issues were also central to discussions at the Business and Economic Outlook Symposium, which examined production trends, cost structures and the broader operating environment.
“Policy engagements during the quarter are expected to impact business operations when adjustments to selected tax measures and regulatory costs are gazetted to ease aspects of compliance, while changes in customs processes have required businesses to adapt how they manage cash flow and transactions,” Kuvarika said.
She added that rising input costs and evolving policy frameworks continue to shape industrial strategy, with consultations on Zimbabwe-China trade arrangements aimed at improving market access and supporting value addition.
Going forward, CZI said it will focus on strengthening production, boosting competitiveness and improving the ease of doing business through continued policy engagement on taxation, trade and regulation-newsday
