Online Reporter
Michael Tome
Zimpapers Business Hub
ANALYSTS have welcomed the Government’s decision to suspend customs duty on selected critical production inputs from January 1 next year, saying the move will help lower industrial costs, improve productivity and strengthen Zimbabwe’s export competitiveness.
The Treasury announced the measure in the 2026 National Budget, outlining a structured, time-bound suspension targeting industries with extensive backward and forward linkages.
The policy marks a shift from the existing customs and excise regime, under which raw materials, intermediate goods and capital equipment attract duties ranging from 5 to 25 percent.
While the tariffs were originally designed to protect domestic manufacturers, they have in many cases driven up production costs, particularly for firms dependent on imported inputs unavailable or inadequate in the local market.
High input costs have been cited as a key constraint in industrial output, export performance and progress in value addition and beneficiation.
Under the new arrangement, priority sectors such as iron and steel production, covering inputs for smelting, rolling and fabrication; and agro-processing, including edible oils and food additives, will benefit from duty suspensions.
The Government will also scrap surtax on selected steel bars and iron rods not manufactured locally, easing pressure on construction-linked industries.
Economist and academic Professor Albert Makochekanwa said the policy shift was likely to stimulate the importation of essential raw materials required by local manufacturers.
“If implemented, the move will encourage the importation of raw materials that are critical for the local manufacturing industry, which should lower production costs and ultimately reduce the price of some goods,” he said.
“Our duties have for long been higher than those of regional counterparts, translating into high production costs that are eventually passed on to the consumer.”
Another economist, Mr Langton Mabhanga, said the suspension will allow industries to improve capacity utilisation.
“The move will allow companies to optimise their production capacity utilisation given the opened access to critical raw materials they require. Definitely, this is a positive move that will push costs down,” he said.
Presenting the 2026 National Budget, the Minister of Finance, Economic Development and Investment Promotion, Professor Mthuli Ncube, said existing customs and excise legislation imposes import duties of between 5 and 25 percent on some raw materials, intermediate goods and capital equipment.
“Under the Customs and Excise legislation, some raw materials, intermediate goods and capital equipment attract import duties ranging from five per cent to 25 percent,” he said.
“While these duties serve to protect domestic industries, they have, in some instances, increased production costs, particularly for manufacturers reliant on imported inputs not locally available in sufficient quantity or quality.
“I, therefore, propose to introduce a structured and time-bound suspension of import duties on critical production inputs for eligible industries targeting the following sectors, among others, with significant backward and forward linkages: iron and steel production, particularly inputs used in smelting, rolling, fabrication; and agro-processing, including edible oils and food processing additives.”
Prof Ncube said the focused duty relief will enable manufacturers to boost production, cut price distortions and make Zimbabwean goods more competitive under the African Continental Free Trade Area.
He said the measures should help firms meet regional quality and price standards, lifting export potential and reinforcing the country’s industrialisation
drive.
Although customs duty protects domestic industries from foreign competition, it may negatively impact businesses and cause a net welfare loss due to higher costs for consumers and businesses, decreased exports and potential supply chain disruption.
It increases the cost of imported goods, which can lead to decreased consumption and imports, and higher prices for consumers, but boosts Government revenue.
