Manufacturing sector capacity slumps amid persistent economic headwinds

 

LIVINSTONE MARUFU

Zimbabwe’s manufacturing sector is facing mounting pressure, with capacity utilisation falling to 52.3% in 2024 from 53.2% in 2023, according to the latest Manufacturing Sector Survey by the Confederation of Zimbabwe Industries (CZI).

The drop marks the second consecutive year of decline, underscoring the continued strain on the country’s industrial base.

The report attributes the decrease to a highly regulated business environment, currency volatility, limited access to finance, persistent foreign currency shortages, power outages, and exchange rate instability—all of which have left local manufacturers increasingly uncompetitive.

Presenting the findings of the 2024 survey in Harare, CZI chief economist Dr. Cornelius Dube warned that the downward trend will persist unless decisive policy interventions are implemented.

“Capacity utilisation is down to 52.3% in 2024 from 53.2% in 2023. The 2023 capacity utilisation level was down from 56.1% in 2022 and 56.3% in 2021,” Dr. Dube said.

The CZI survey is based on a sample of 402 firms drawn from an estimated 4,552 manufacturing companies employing at least 10 people.

The sector’s contribution to Gross Domestic Product (GDP) has now dropped to under 10%, down from 14.8% in 2018.

This marks a significant decline from previous decades—between 1980 and 1989, manufacturing contributed an average of 23% to GDP.

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