Published: 2 hours ago

The Government is planning to restrict the importation of goods worth an estimated US$4.5 billion that can be produced locally under a proposed Local Content Act aimed at accelerating industrialisation, creating jobs and preserving foreign currency reserves.

Authorities expect the legislation to come into effect next year and believe it will provide a stronger legal framework for enforcing local content requirements across key sectors of the economy.

The proposed law seeks to reduce dependence on imports, strengthen domestic value chains and encourage local manufacturing by limiting the importation of products that Zimbabwe has the capacity to produce.

Among the products identified for possible import substitution are tissue paper, toothpicks, chewing gum, pharmaceuticals and a range of consumer goods that government says can be manufactured locally.

To drive the initiative, government has established a high-level Local Content National Steering Committee comprising academics, business leaders, industry representatives and technocrats from various ministries.

The committee is chaired by economist and academic Gift Mugano, who said Zimbabwe could no longer afford to spend billions importing goods that could be produced domestically.

"The starting point is that we have an import bill of US$4.5 billion worth of commodities that can be produced locally," Mugano said.

"We are importing them because we don't have a policy framework to stop that importation, which is unnecessary. It is becoming a burden on our fiscus and reserves because we are draining foreign currency unnecessarily."

According to Mugano, the proposed legislation will operationalise the existing Local Content Strategy by introducing enforceable local content thresholds, compliance mechanisms and incentives designed to promote localisation.

Companies that meet prescribed local content requirements are expected to qualify for tax and non-fiscal incentives, while those that fail to comply could face penalties.

Government is also developing an artificial intelligence-powered local content rating and certification system that will assess businesses based on their localisation performance.

Authorities have identified 16 strategic sectors that account for a significant share of Zimbabwe's import bill. Studies assessing import substitution opportunities have already been completed in nine sectors, while assessments of the remaining sectors are still underway.

"The information from these studies will become the raw material for developing the principles that will underpin the Local Content Act," Mugano said.

He noted that Zimbabwe spends more than US$200 million annually importing tissue paper and over US$300 million on pharmaceuticals despite possessing the potential to manufacture many of these products locally.

"We cannot continue importing products such as toothpicks, chewing gum, tissue paper and pharmaceuticals when we have the potential to produce many of them locally," he said.

The proposed legislation is expected to become a key component of the Zimbabwe National Industrial Development Policy 2 (ZNIDP2) for 2026-2030, which seeks to deepen industrialisation, strengthen domestic value chains and transform Zimbabwe into a competitive manufacturing and export-led economy.

Industry and Commerce Minister Mangaliso Ndlovu recently announced an industrialisation drive aimed at substituting more than US$4 billion worth of imports through increased domestic production.

"The Local Content Strategy on its own is not enough. We need a Local Content Act to operationalise the framework and provide a clear implementation mechanism," Mugano said.

"We are quite advanced in driving the agenda of localising production and eliminating unnecessary imports. We are very certain that the Local Content Act will be operationalised by next year. By the end of this year, we expect to have completed studies covering all 16 sectors and developed draft principles for the Act."

Official trade statistics highlight the scale of Zimbabwe's dependence on imported consumer products. Between 2021 and 2025, the country spent more than US$140 million importing beauty, cosmetic and personal care products, an area government believes presents significant opportunities for local manufacturing.

Economist Davison Gomo said the initiative could help revive Zimbabwe's manufacturing sector, create jobs and reduce opportunities for smuggling and illicit trade.

"If local industry cannot adequately supply the market, you create opportunities for illegal trade and corruption. In the end, the Government finds itself competing against an invisible force driven by corruption," he said.

Economic commentator Wendy Mpofu said the proposed legislation has the potential to become a landmark intervention in Zimbabwe's industrialisation efforts if implemented effectively.

If enacted, the Local Content Act would represent one of the most significant policy shifts in Zimbabwe's industrial strategy in recent years, with government hoping it will stimulate domestic production, reduce import dependency and strengthen the country's economic resilience.
- The Chronicle