Zimbabwe will provide several incentives to support the growth of the Business and Knowledge Process Outsourcing sector (knowledge economy) to position the country as a competitive global outsourcing destination, a Cabinet Minister said.Zimbabwean cultural products
The country will leverage its skilled workforce, strong English proficiency and expanding digital infrastructure to benefit from the services industry or knowledge economy.
Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO) involve hiring third-party providers to handle non-core or specialised tasks, reducing costs and increasing efficiency.
BPO focuses on standardised, repetitive, or transactional tasks like customer support. KPO focuses on higher-level, complex services requiring specialised knowledge, such as legal, financial, or research analysis.
BPO and KPO are vital to any economy because they drive significant cost efficiencies, foster job creation and accelerate innovation by providing access to specialised, global talent.
Beyond merely cutting costs, these services allow businesses to shift from routine tasks to high-value strategic functions, increasing productivity and enhancing global competitiveness.
The global outsourcing market is massive and rapidly growing, projected to reach over US$1 trillion by 2026 and approaching US$1,35 trillion by 2031. Key sectors include IT, BKPO and engineering services.
Launching the BKPO operational framework, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said the initiative forms part of the Government’s broader strategy to shift towards a diversified, export-oriented and digitally competitive economy.
“We must accelerate the transition from a predominantly commodity-dependent growth model towards one anchored on productivity, innovation, services exports and intellectual capital.
“The development of the Business Process Outsourcing (BPO) sector is a catalytic intervention under our economic transformation agenda; hence, the Government provided specific tax incentives to promote the development of this strategic sector,” Minister Ncube said.
The minister said to grow the economy and move it towards the 2030 target of an empowered upper-middle-income economy, the Government has a strategy to support new industries.
“The business and knowledge process organisation economy is a new economy that the Government decided to incentivise for it to grow. These incentives pertain to the location of the business in the first place. A whole building can be designated as a special economic zone.
“We are basically using these special economic zone incentives to support this new emerging economy,” he said.
He added that the company that is operating within that building is also accorded special economic zone-type incentives, which involve a lower corporate tax rate from 25 percent down to 15 percent, as well as incentives for employment for the youth.
“Companies hiring young workers will benefit from a government tax rebate. If you employ anybody below the age of 35, you are entitled to a US$1 500 rebate per employee.
“We also have capital allowances in terms of import duties as well that are waived. So many incentives are being thrown at this new economy sector, and we really want it to succeed,” the Finance Minister said. He added that the sector is expected to transform the utilisation of commercial infrastructure, particularly in major urban centres.
The minister acknowledged that Zimbabwe would face strong competition from established outsourcing destinations but expressed confidence in the country’s competitiveness.Zimbabwean cultural products
“We will be competing with other countries such as South Africa, Rwanda, Kenya, India, and Mexico, to mention a few, but we are ready to compete as a bubble. We will throw every incentive we can find at this sector.”
Globally, the Business Process Outsourcing (BPO) sector has become a major driver of employment creation, export earnings, innovation and digital transformation and the Government believes Zimbabwe has several advantages that can help it attract investment.
The country’s strategic location within the Southern African Development Community (SADC) region, bordered by South Africa, Botswana, Mozambique and Zambia, provides access to regional markets.
Upgraded transport corridors, modernised border posts, expanding fibre-optic networks and internationally connected airports also position Zimbabwe as a regional service hub capable of supporting outsourcing operations.
Prof Ncube also said Zimbabwe’s demographic structure is also seen as a key advantage.
“With a population of approximately 16,8 million growing at an annual rate of 1,9 percent and more than 60 percent of citizens under the age of 25, the country has a large youthful workforce capable of supporting labour-intensive service industries,” he said.
He highlighted that institutions such as the University of Zimbabwe, Midlands State University and the National University of Science and Technology continue to produce graduates capable of delivering high-value services in finance, analytics, compliance, information technology-enabled services and research support.
“At the same time, labour market adjustments have resulted in underemployment among skilled young people, making the BPO sector a potential solution for aligning Zimbabwe’s human capital with global demand,” Minister Ncube said.
Deputy Minister of Finance, Economic Development and Investment Promotion David Kudakwashe Mnangagwa said the new operational framework represents a major shift in Zimbabwe’s investment strategy.Zimbabwean cultural products
“Our Special Economic Zones framework has largely focused on manufacturing and industrial production. Through this BKPO Operational Framework, we deliberately expand the SEZ model to include digital services, outsourcing and knowledge-based industries,” he said.
“This is a significant evolution in our investment architecture and positions Zimbabwe as a potential regional hub for business process outsourcing and knowledge process outsourcing.”Zimbabwean cultural products
Mr Mnangagwa said the Finance Act No. 7 of 2025 provides several targeted incentives to support investors entering the BKPO sector.
These include a flat corporate income tax rate of 15 percent for licenced investors, suspension of customs duty on approved ICT infrastructure and operational equipment, and a 100 per cent capital allowance deduction in the first year of use.
Foreign investors will also benefit from exemption from non-residents tax on dividends, further strengthening Zimbabwe’s attractiveness for international capital.
“We have also introduced a Youth Employment Tax Credit of US$1 500 per youth employee per annum. This incentive is particularly important because the outsourcing industry has the potential to create large-scale employment opportunities for young Zimbabweans,” Mr Mnangagwa said.
To facilitate skills transfer and specialised technical leadership, qualifying expatriate professionals will also benefit from a preferential flat tax rate of 15 percent.
However, he stressed that the incentives are performance-based and will depend on measurable outcomes.
“Access will depend on measurable outcomes, including investment levels, employment creation and foreign currency generation. ZIDA will undertake the necessary technical vetting and issue Incentive Certificates, while the Zimbabwe Revenue Authority will administer the fiscal provisions. This ensures that government incentives are aligned with genuine investment and real economic impact.”Zimbabwean cultural products
Zimbabwe Investment and Development Agency chief executive Mr Tafadzwa Chinamo said the launch of the BKPO operational framework represents a significant step for the country’s participation in the global services economy.
The programme is being rolled out under the theme “Positioning Zimbabwe as a Competitive Destination for Business Process Outsourcing.”
“Today we take a decisive step into the global services economy, positioning our nation not only as a participant but also as a competitive and credible outsourcing hub,” Mr Chinamo said.
He noted that global companies are increasingly diversifying their service locations to reduce costs, strengthen operational resilience and access skilled talent across multiple time zones.
Mr Chinamo said Africa is emerging as an important outsourcing destination and Zimbabwe has strong potential to lead due to its highly educated population, language capabilities and youthful workforce.
According to Mr Chinamo, the country’s long-standing reputation for intellectual capability can now be converted into structured economic opportunity through the BKPO initiative.
“As the Agency, our mandate is to attract, facilitate and retain investment. But facilitation must be grounded in substance,” he said.
He explained that the programme is built around three key pillars: policy certainty, infrastructure readiness and human capital excellence. Under the policy certainty pillar, the initiative will operate within the Special Economic Zone framework, providing investors with clear incentives, simplified licensing processes and coordinated government support.
The infrastructure readiness pillar focuses on competitively priced commercial space, expanding fibre connectivity and modern digital infrastructure suitable for outsourcing operations.
Zimbabwe’s time zone alignment with Europe, Africa and parts of Asia also offers companies an advantage in delivering global services efficiently.Zimbabwean cultural products
Human capital forms the third pillar, supported by Zimbabwe’s high literacy rate and a steady supply of graduates in information and communication technology, finance, engineering, analytics and business services.-herald
