HARARE – Zimbabwe is preparing a major shift in trade and industrial policy, with Government proposing new legislation aimed at restricting up to US$4,5 billion worth of imports that authorities say can be produced domestically, in a bid to strengthen industrialisation, conserve foreign currency, and deepen local value chains.
According to State Media, the planned Local Content Act is expected to become operational next year and will form the legal backbone of efforts to reduce reliance on imported consumer and industrial goods.
The proposed framework targets a wide basket of products currently imported despite local production potential, including tissue paper, toothpicks, chewing gum, pharmaceuticals, and other fast-moving consumer goods.
Quoting the Herald, the policy thrust is designed to “boost industrialisation, creating jobs and reducing pressure on the country’s foreign currency reserves” through import substitution and localisation of production.
A high-level Local Content National Steering Committee—comprising academics, business leaders, industry representatives and government technocrats—has been established to guide implementation. The committee is chaired by economist and academic Professor Gift Mugano.
Speaking to State Media, Prof Mugano said the scale of import substitution opportunity highlights structural weaknesses in the domestic production base.
“The starting point is that we have an import bill of US$4,5 billion worth of commodities that can be produced locally,” he 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.”
Under the proposed Act, firms that meet defined local content thresholds will benefit from tax and non-tax incentives, while non-compliant entities could face penalties. Authorities are also developing an artificial intelligence-driven certification and rating system to measure firms’ localisation performance.
Government has identified 16 strategic sectors for intervention, with detailed capacity assessments already completed in nine. The findings are expected to inform the legal principles underpinning the new legislation.
Prof Mugano said Zimbabwe spends significant sums annually on goods that could be manufactured domestically, including more than US$200 million on tissue paper and over US$300 million on pharmaceuticals.
Industry and Commerce Minister Mangaliso Ndlovu has previously indicated that the broader industrialisation programme targets more than US$4 billion in import substitution through domestic production under the forthcoming policy framework.
“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,” Prof Mugano said. “We are quite advanced in driving the agenda of localising production and eliminating unnecessary imports.”
The policy comes against the backdrop of a persistent structural trade imbalance, with official data showing sustained demand for imported consumer goods. Between 2021 and 2025, Zimbabwe imported over US$140 million worth of beauty, cosmetic and personal care products alone.
Within that category, skincare and makeup products accounted for US$43,6 million, while toothpaste and dental care imports stood at US$20 million. Perfumes, deodorants and related products contributed US$16,4 million, and petroleum jelly imports reached US$13,6 million.
Economists say the initiative could mark a turning point for domestic industry if effectively implemented.
Economist Dr Davison Gomo said the policy addresses long-standing capacity constraints in manufacturing and enterprise development.
“The reason these goods come into the country is that our internal manufacturing capacity is still well below where it should be,” he said. “Our entrepreneurial capacity to produce a variety of goods is also subdued to a large extent.”
He added that strengthening domestic production would help reduce illicit trade and improve fiscal resilience.
“If local industry cannot adequately supply the market, you create opportunities for illegal trade and corruption,” Dr Gomo said.
Official figures indicate manufacturing capacity utilisation rose to 57 percent in the first quarter of this year, up from 47,7 percent in the same period last year, signalling gradual recovery in industrial activity.
Economic analyst Ms Wendy Mpofu said the proposed legislation could become a defining pillar of Zimbabwe’s industrial policy architecture.
“The Local Content Act has the potential to become one of the most important industrial policy interventions since independence,” she said. “If implemented effectively, it can reduce import dependence, preserve foreign currency, stimulate domestic investment and accelerate the revival of Zimbabwe’s manufacturing sector.”
