Online Reporter
Business Writer
MANUFACTURING retained its position as Zimbabwe’s largest economic sector in the second quarter of 2026, contributing 16,2 percent to Gross Domestic Product (GDP), despite recording a slight decline in its overall share of economic output.
The sector maintained its leading position as the economy rebounded from a 3,5 percent contraction in the first quarter, according to the latest figures from the Zimbabwe National Statistics Agency (ZimStat).
Data released by ZimStat shows that manufacturing accounted for 16,2 percent of total national value added at constant prices during the second quarter, down marginally from 17 percent recorded in the first quarter.
While sectoral growth slowed to 0,6 percent quarter-on-quarter from 1,6 percent in the first three months of the year, manufacturing output expanded by 3,3 percent on an annual basis.
The sector’s continued resilience builds on a broader industrial recovery driven by increased capacity utilisation, retooling and investment, supported by Government policy frameworks such as the Zimbabwe National Industrial Development Policy 2 (ZNIDP2) and the Local Content Strategy.
According to the Confederation of Zimbabwe Industries, manufacturing capacity utilisation has improved significantly from historically low levels, underpinned by growth in sub-sectors including food processing, beverages and industrial chemicals.
The State of the Industry and 2027 Prospects report indicates that substantial capital investment is flowing into the sector as companies accelerate retooling and modernisation programmes.
Manufactured exports have also continued to grow, reflecting improved regional competitiveness and expanding access to export markets.
Industry experts say significant opportunities remain for further expansion through import substitution.
Zimbabwe imports an estimated US$2,5 billion worth of manufactured goods annually, many of which can be produced locally. This presents considerable scope for domestic firms to increase production, deepen value addition and reduce the country’s import bill.
Analysts argue that replacing imported manufactured goods with locally produced alternatives could stimulate long-term economic stability, industrial growth and job creation.
Africa Economic Development Strategies executive director Professor Gift Mugano said Zimbabwe already has the right policy foundations in place through ZNIDP2 and the Local Content Strategy.
“These two policies are set to reshape our industrial setup in a transformative way—particularly through local content initiatives aimed at import substitution,” Prof Mugano said.
“This shift will drive deeper localisation of value chains, expand local production and position manufacturing as the primary engine of economic growth, pushing its contribution towards a 25 percent share of GDP.”
Meanwhile, mining and quarrying remained the second-largest contributor to economic output, increasing its share of GDP to 15,4 percent in the second quarter from 12,2 percent in the first quarter following strong growth in production.
Agriculture, forestry and fishing contributed 12 percent of GDP, down from 13,5 percent in the previous quarter. Despite the reduced share, the sector recorded quarter-on-quarter growth of 4 percent and annual growth of 7,3 percent.
Wholesale and retail trade remained relatively stable at 10,8 percent of GDP, compared to 10,9 percent in the first quarter, while quarterly growth accelerated from 1,6 percent to 4,5 percent.
Financial and insurance activities, however, contracted by 3,6 percent quarter-on-quarter, resulting in their contribution to national output declining from 6,7 percent to 6,1 percent.
Overall, Zimbabwe’s economy grew by 5,8 percent in the second quarter of 2026, recovering strongly from the 3,5 percent contraction recorded in the first quarter.
According to ZimStat, GDP at constant prices rose to ZiG412,4 billion in the second quarter from ZiG389,7 billion in the preceding quarter.
At current prices, nominal GDP stood at ZiG57,3 billion.
ZimStat compiled the figures using the production approach under the 2008 System of National Accounts, with 2025 as the base year.
The agency said minor revisions were made to selected industries following updates from Zimra, Government administrative records and national employment surveys.
