National Foods and the Ministry of Industry and Commerce have held discussions on local content development, import substitution and industrial growth following a visit by Permanent Secretary Ambassador Thomas Chifamba to the food processing company.

The ministry said the engagement focused on strengthening collaboration between government and the private sector, advancing the local content agenda and accelerating the Buy Zimbabwe campaign. National Foods is one of Zimbabwe's largest manufacturers of cereals, flour, pasta, biscuits, snacks and stockfeeds, with operations spanning key segments of the country's food value chain.

The engagement comes as Zimbabwe seeks to strengthen domestic manufacturing and reduce dependence on imports through increased local production and value addition. Industrialisation has become a central pillar of government policy, with authorities identifying local content development as a key mechanism for job creation, foreign currency savings and economic growth.

However, the latest manufacturing sector survey shows capacity utilisation declined to 52.3% in 2024 from 53.2% in 2023 and 56.1% in 2022, highlighting persistent challenges facing local industry despite ongoing policy support for production and investment.

The survey identified exchange rate instability, power shortages, high production costs and limited access to affordable financing among the major constraints affecting manufacturers.

National Foods has emerged as one of the companies continuing to invest despite the difficult operating environment. The company recently commissioned a US$22.7 million pasta production plant and expanded several processing lines as part of efforts to increase local manufacturing capacity and reduce imports. The investment forms part of broader efforts by Zimbabwean manufacturers to deepen value addition in agriculture and food processing.

The government's focus on import substitution is not new. Successive administrations have promoted policies aimed at reducing reliance on imported finished goods while encouraging local procurement. Yet economists argue that the effectiveness of such measures depends largely on the competitiveness of domestic industry.

Economic analyst Persistence Gwanyanya previously noted that industrial growth requires more than protectionist measures, arguing that productivity, infrastructure and policy consistency remain critical to improving the competitiveness of local manufacturers.

"The competitiveness of local industry is key if import substitution is to succeed sustainably. Local producers must be able to compete on quality, efficiency and cost," Gwanyanya said during discussions on industrial policy reforms.

Industry representatives have similarly argued that while local content policies can stimulate domestic production, structural bottlenecks continue to undermine manufacturing growth.

Presenting the latest manufacturing survey findings, Confederation of Zimbabwe Industries chief economist Dr Cornelius Dube said capacity utilisation had continued to decline despite optimism among manufacturers.

"Capacity utilisation is down to 52.3% in 2024 from 53.2% in 2023. The 2023 capacity utilisation level was down from 56.1% in 2022 and 56.3% in 2021."

Dube said exchange rate volatility, foreign currency shortages and energy challenges remained among the key factors weighing on industrial performance.

The discussions between government and National Foods also come against the backdrop of efforts to strengthen the Buy Zimbabwe campaign, which advocates greater consumption of locally produced goods.

Supporters argue that increased local procurement can stimulate investment and employment, while critics contend that sustained industrial growth will require broader reforms addressing production costs, infrastructure deficits and policy uncertainty.

Historically, manufacturing was one of Zimbabwe's strongest economic sectors, contributing more than 20% of gross domestic product during the 1980s. That contribution has declined significantly over the decades amid de-industrialisation, company closures and economic instability.

Recent economic data nevertheless show manufacturing remains one of the country's largest productive sectors and a critical source of formal employment.