Harare — The Portfolio Committee on Industry and Commerce has issued a stark warning that Treasury risks derailing the industrialisation agenda, revealing that there is a staggering ZWG1.63 billion shortfall that threatens to derail Zimbabwe’s manufacturing sector.

Presenting the committee’s report at the 2027 National Pre-Budget Seminar, Chairperson, Clemence Chiduwa revealed that the Ministry of Industry and Commerce (Vote 7) submitted a budget bid of ZWG2.23 billion, but Treasury imposed a ceiling of just ZWG600 million, a mere 27% of the requested amount.

The committee warned that this 73% funding gap is not merely a statistical anomaly but a direct threat to economic growth.

“Industrialisation funding declined from 2025 revised estimates,” Chiduwa noted, adding that the 2026 allocation saw the Industrialisation programme fall from ZWG311.05 million to ZWG251.03 million.

The consequences of underfunding were laid bare in the committee’s findings. Treasury releases were described as “late and/or partial,” with the ZWG2.36 million Bioequivalence Centre project receiving no funds at all. As of June 30, 2026, the Ministry owed creditors approximately ZWG29 million, of which only 17% (ZWG4.96 million) had been paid.

Chiduwa outlined a series of targeted recommendations to rescue the sector. The committee is demanding an immediate injection of ZWG111 million in additional resources, split across Policy and Administration (ZWG19.8 million), Industrialisation (ZWG78.2 million), and Consumer Protection and Quality Assurance (ZWG13 million). Furthermore, Treasury is urged to release at least 90% of Vote 7 allocations in predictable quarterly tranches.

The committee also proposed sweeping fiscal reforms. It recommended the removal of tariff inversions, citing the example of Bitumen 70/100, where local producers face a 20% duty on raw materials while imported finished products attract duties as low as 5%.

The committee also called for an urgent review of the beverage sugar tax, proposing a reduction from US$1,000 per tonne to a flat US$250 per tonne, and the suspension of SI 87 of 2025 to mitigate the impact of an anticipated El Niño-induced drought.

To unlock manufacturing competitiveness, the committee recommends recapitalising the Industrial Development Fund (IDF), with at least ZWG120 million ring-fenced for priority value chains including cotton-to-clothing, iron ore-to-steel, and strategic minerals-to-battery precursors.

It further proposes a tiered royalty structure for strategic minerals, offering a 75% reduction for minerals processed into finished products, and a reduced corporate income tax of 15% for qualifying beneficiation plants.

The committee also flagged the Intermediated Money Transfer Tax (IMTT) as a structural constraint, recommending a tiered rate with 1% IMTT on value-chain transactions between registered businesses, and a 2% cap on aggregate IMTT per supply-chain transaction.

“The 2027 Budget should strengthen local production, reduce avoidable costs, protect fair competition and give businesses the certainty to invest, employ and export,” Chiduwa concluded, urging Treasury to make industrial development a central pillar of the 2027 fiscal framework.