HAVING previously been known as a regional iron and steel hub, Zimbabwe lost its status in the early 2000s following the collapse of the Zimbabwe Iron and Steel Company (ZISCO).
The country had become a net importer of steel and iron products, squeezed by the negative impact of the demise of ZISCO. The steel maker ceased operations in 2008 partly due to mismanagement and a shortage of capital.
The closure of ZISCO also affected the foundries, whose mills it was the main feeder.
Given the importance of steel and iron products in supporting the operations of many other industries and industrialisation, Zimbabwe’s import bill continues to grow.
In 2021, imports of steel and iron products soared to nearly US$410 million from US$306 million a year earlier, according to figures from the Zimbabwe National Statistics Agency, driven mainly by public and private infrastructure programmes.
High-end steel and iron products have also pushed demand higher.
Howerver, the US$1 billion Manhize Iron and Steel Plant, being set up in Mvuma by China’s Dinson Iron and Steel Company, has come in as a game changer, courtesy of efforts by the Second Republic, to attract foreign investment.
The project aligns with President Mnangagwa’s economic development drive, targeting the country to be one of the largest steel and iron products producers in Africa.
The plant is expected to reduce the huge steel import bill and boost exports while supporting downstream industries and employment creation. The project, which carries the National Project Status, will significantly contribute to the economy’s economic growth through job creation, taxes and exports, among other benefits.
The Manhize operation will reduce the import bill by 90 percent, with over 10 000 people being employed directly and an additional 50 000 indirectly. Currently, the project has already created over 800 jobs at the construction stage of the steelworks.
“It is a landmark project that is going to make a significant impact on the economy in so many aspects, including job creation, reducing the import bill that will eventually cut costs on various infrastructure projects,” Harare-based analyst Simon Tigere said.
Carlos Tadya, another Harare-based analyst, said: “It is also important to note that there will be unquantifiable benefits of positive perception (by the global investor community).”
“Such kinds of projects help change the negative perception by other investors. It might be very difficult to quantify but I am sure the project is making a huge impact.”
According to ZimTrade, potential export markets for Zimbabwe include Zambia, Botswana, Angola, the Democratic Republic of Congo (DRC), Malawi, Mozambique and Namibia.
Trade Map also says Zambia imported iron and steel products worth around US$226 million in 2020, with the majority coming from South Africa (US$113 million), China (US$64 million), Chile (US$27 million) and India (US$3 million). In terms of quantities, Zambia has been importing more iron and steel over the years, from around 58 000 tonnes in 2018 to around 81 000 in 2021, according to ZimTrade.
“Leveraging on Zimbabwe’s short distance to Zambia, there is potential for the Manhize Iron and Steel Plant to produce products that will compete well in the neighbouring country,” it says.
In Malawi, most of the iron and steel imports, worth around US$83 million in 2021, came from China, which accounted for around US$38 million. The other major suppliers in the market were South Africa, Zambia and Mozambique. In terms of quantities, Malawi imported 39 000 tonnes of iron and steel in 2021.
During the same year, Mozambique also imported around 111 000 tonnes of iron and steel products, valued at around US$99 million.
Major suppliers of this were South Africa, China, Japan, Turkey and Portugal.
Namibia, in 2021, imported 26 000 tonnes of iron and steel worth around US$95 million, with major suppliers being South Africa, China and Zambia.
DRC imported about 46 000 tonnes of iron and steel products valued at around US$126 million in 2021, with major suppliers being South Africa, China, Zambia and Turkey.
“Considering the proximity of these markets, and their current source markets, which are as far as Asia and Europe, there is no doubt that locally produced iron and steel will compete well in the region,” says ZimTrade.
