INDUSTRY capacity utilization is projected to reach 55% in 2025 on the back of a rebound of the agricultural sector, which will go a long way to stimulate productivity among other factors.

Presenting the 2025 National Budget in Parly Thursday, Finance Minister, Mthuli Ncube said the manufacturing sector is set to rebound in the coming year.

“The manufacturing sector is now projected to grow by 2% in 2024, and is expected to pick up in 2025 and grow by 3.1%. This growth is driven by increased agricultural output, which will stimulate agro-processing industries, particularly in the drinks and beverages subsector.

“Capacity utilisation is projected to recover from 52.1% in 2024, to 55% in 2025 in line with the growth forecast,” he said.

He attributed the projections to recovery in the foodstuffs, drinks, beverages and tobacco, metals and metal products, and non-metallic mineral products subsectors underpinned by a stable macro-economic environment, improved performance of the foreign currency exchange market and enhanced power supply.

“The sector is also expected to benefit from the Zimbabwe Industrial Reconstruction and Growth Plan (ZIRGP) 2024-2025, which seeks to address some of the immediate challenges constraining industrial performance.

Ncube said in view of the sector’s inability to access affordable long term funding, the government had set aside ZiG100 million as industrial development finance under the Ministry of Industry and Commerce to support the tooling and working capital requirements for greenfield projects.

In addition, Ncube said, the government will capacitate the National Venture Capital Company of Zimbabwe (NVCCZ), to the tune of ZiG108 million to support upcoming start-ups and MSMEs in order to promote innovation and generate new employment opportunities.

“Government will also promote the growth of domestic value chains through prioritizing the procurement of domestically produced goods. In total, ZiG550.9 million is being allocated to the Ministry of Industry and Commerce to support the implementation of the Zimbabwe Industrial Reconstruction and Growth Plan.

“Furthermore, the manufacturing sector is expected to benefit from support from the African Development Bank, targeted at the following projects,” added Ncube.