Online Reporter
Nelson Gahadza
Zimpapers Business Hub
MANUFACTURING firms have significant scope to unlock growth by strategically utilising idle capacity, with supportive Government interventions increasingly creating a more enabling environment for industrial expansion, an industrial lobby group has said.
In its report titled “Capacity in the Manufacturing Sector, Exploiting untapped Opportunities”, the Confederation of Zimbabwe Industries (CZI) said evidence from 2020 to 2024 shows that manufacturing firms have stabilised at an average capacity utilisation level of about 55 percent, implying idle capacity of roughly 45 percent.
Industry capacity utilisation is also projected to remain at 55 percent for the full year 2025.
However, the report notes that the sector has reached a point beyond which further gains require deliberate firm-level strategies combined with targeted policy support.
CZI senior economist Dr Carren Pindiriri, in the report, said the persistence of unused capacity should be viewed not only as a constraint but also as a major opportunity for industrial growth, employment creation and fiscal expansion.
“With existing plant and machinery already in place, firms can raise output significantly without incurring the full costs of new investment, provided the operating environment continues to improve,” he said.
He noted that one practical pathway for firms was to focus on reducing production costs as a foundation for expanding output.
“Lower costs improve competitiveness, enable firms to price products more attractively and stimulate demand in both domestic and export markets. As output rises, fixed costs such as rent, maintenance, depreciation and insurance are spread over a larger production base, reinforcing economies of scale and further lowering unit costs,” said Dr Pindiri.
The CZI report also highlights that high idle capacity inflates fixed costs per unit of output, but this challenge can be reversed through improved utilisation.
