Zimbabwe’s industrial capacity utilisation is expected to rise to 55% by 2025, driven by a recovery in the agricultural sector and other growth factors. This projection was outlined by Finance and Economic Development Minister Mthuli Ncube while presenting the 2025 National Budget in Parliament on Thursday.
Growth in Manufacturing Sector
Ncube highlighted a positive outlook for the manufacturing sector, projecting a 2% growth in 2024, followed by a 3.1% expansion in 2025. He attributed this rebound to increased agricultural output, which is expected to stimulate agro-processing industries, particularly in the drinks and beverages subsector.
“Capacity utilisation is projected to recover from 52.1% in 2024 to 55% in 2025 in line with the growth forecast,” Ncube said.
Key Growth Drivers
The manufacturing sector’s recovery is underpinned by several factors, including:
- Improved performance in foodstuffs, drinks, beverages, tobacco, metals, and non-metallic mineral products.
- A stable macro-economic environment.
- Enhanced foreign currency exchange market stability.
- Better power supply.
Ncube also credited the Zimbabwe Industrial Reconstruction and Growth Plan (ZIRGP) 2024–2025 for addressing challenges hindering industrial performance.
Funding and Support Initiatives
To mitigate the sector’s struggle with accessing affordable long-term funding, the government has allocated significant financial resources:
- ZiG100 million for industrial development finance under the Ministry of Industry and Commerce to support tooling and working capital for new projects.
- ZiG108 million to the National Venture Capital Company of Zimbabwe (NVCCZ) to back start-ups and micro, small, and medium enterprises (MSMEs), fostering innovation and job creation.
Ncube emphasised the importance of promoting domestic value chains by prioritising the procurement of locally produced goods. In total, the Ministry of Industry and Commerce will receive ZiG550.9 million to implement the ZIRGP.
International Support
Additionally, the manufacturing sector is set to benefit from support by the African Development Bank, which is funding targeted projects aimed at enhancing industrial performance and competitiveness.
Outlook
With these interventions, Zimbabwe’s manufacturing sector is poised for a steady recovery, creating opportunities for increased productivity and employment while contributing to the broader economic goals outlined in the national budget.