Manufacturing has become Zimbabwe’s largest economic sector, with its contribution to gross domestic product increasing from 16.8% in 2025 to 17.1% in the first quarter of 2026, a new study shows.

According to The State of Zimbabwe’s Industry and Prospects for 2027, presented by Africa Economic Development Strategies Executive Director, Professor Gift Mugano, at the Zimbabwe Industrialisation Conference and Expo, businesses are actively prioritising long-term modernisation and foreign market expansion rather than short-term survival.

Prof Mugano noted that 81.8% of financed industrial firms invested capital directly into upgrading production capacity and expanding into export markets.

Specifically, 35.1% of capital was allocated to new machinery and production equipment, while 12.4% was spent on warehouses and logistics infrastructure, another 12.4% went toward expansion into new export markets, and 7.3% was dedicated to new product development and value addition.

He said modernisation efforts are advancing rapidly across plant floors, with 65% of surveyed manufacturing firms now operating machinery less than ten years old, 48% currently executing technology upgrades, and 18.5% confirming investments in artificial intelligence technologies in 2026.

Looking ahead, 63.1% of surveyed firms expressed optimism about the industrial sector’s performance in 2027, while 54.7% reported optimism about the wider economy.

The respondents framed current operational hurdles such as high capital costs, import competition, and climate change as constraints of a recovering sector operating below potential rather than symptoms of collapse.

To sustain this growth trajectory, the study recommended establishing a dedicated industrial bank driven by pension funds to provide affordable long-term financing.

“Industry called for the establishment of an industrial bank largely driven by pension funds, providing affordable long-term capital for machinery, technology, export expansion and value addition, enabling firms to accelerate industrial transformation and import substitution,” Prof Mugano said.