The Road to Vision 2030: Recapturing Zimbabwe’s Second Republic Productive Sector Reforms

By Tinashe Mukori

Zimbabwe’s Second Republic, under the astute and visionary leadership of President E.D. Mnangagwa, embarked on a series of reforms aimed at revitalizing the economy, fostering sustainable growth, and propelling the nation towards a prosperous middle-income society by 2030.

The focus for productive sector reforms is on challenges in the productive sectors of the economy and to proffer policy interventions to build investor confidence and enable private sector led economic growth for instance through sectoral GDPP growth, transforming agriculture and rescicitating the industry.

At the heart of this transformation was the Transitional Stabilization Programme (TSP) – a comprehensive strategy designed to address economic instability, promote sustainable growth, and tackle inherited challenges such as hyperinflation, dwindling industrial output, and fiscal discrepancies.

The government sought to create a stable foundation for national development. Notable productive sector reforms under the TSP – some completed and others still ongoing – include state-owned enterprise (SOE) reforms, privatization and public-private partnerships (PPPs), indigenization and economic empowerment, agricultural sector reforms, and mining sector reforms.

State Enterprise Reform: Revitalizing State-Owned Enterprises

A cornerstone of these reforms was the restructuring of state-owned enterprises (SOEs) to enhance efficiency and effectiveness. This ongoing process involves revitalizing entities through privatization, stock exchange listings, mergers, and, in some cases, the liquidation of non-viable SOEs.

Adopted in 2018, the SOE reform agenda sought to improve governance, financial performance, and operational efficiency. Strategies include:

▪Commercialization – transforming parastatals into commercially viable entities.

▪Liquidation – targeting non-viable entities such as National Glass Industries and Zim Glass for closure.

▪Mergers – consolidating overlapping institutions, such as the merger of the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) and the Broadcasting Authority of Zimbabwe (BAZ).

▪Strategic departmentalization – integrating selected parastatals into relevant government ministries to streamline operations.

To enhance corporate governance, the government emphasized improved accountability, performance management, and institutional support, collaborating with notable organizations such as the African Development Bank.

Despite political complexities and employment concerns, these reforms remain central to Zimbabwe’s economic revitalization.

Privatization and Public-Private Partnerships (PPPs): Attracting investment and promoting growth

The TSP strongly advocated privatization and PPPs to attract investment and drive economic growth. Several SOEs, including the Industrial Development Corporation (IDC), Zimbabwe United Passenger Company (ZUPCO), Infrastructure Development Bank of Zimbabwe (IDBZ), POSB, and Agribank (now restructured as AFC Commercial Bank), have been earmarked for full or partial privatization or transformation into competitive market-driven entities.

Recently, media reports claimed that POSB was being sold to foreign investors. However, on February 20, 2025, the Reserve Bank of Zimbabwe (RBZ) swiftly issued a statement refuting these claims. The RBZ clarified that while the government had previously expressed intentions to partially privatize some SOEs as part of economic reforms, there was no official indication that POSB was on the immediate list for privatization. Furthermore, no application or correspondence had been received from either foreign investors or the government regarding its sale.

According to the TSP, Zimbabwe has 107 public enterprises, but 70% of these are technically insolvent, making them a drain on the public purse. It was anticipated that privatization of these enterprises would help cut the budget deficit from 12% of GDP to 5%.

Indigenization and Economic Empowerment: Fostering local participation and attracting foreign investment

Since 2018, revisions to the Indigenization and Economic Empowerment Act aimed to attract foreign investment while maintaining local participation. Notable changes included:

¶ Restricting the 51% local ownership rule to only diamond and platinum mining.

¶ Permitting majority foreign ownership in non-resource sectors such as manufacturing and finance.

¶ Introducing compliance levies for non-compliant firms rather than imposing closures.

¶ Allowing companies to earn local ownership credits through investments in skills development and community initiatives.

These adjustments were designed to stimulate economic growth by attracting foreign capital while simultaneously fostering indigenous empowerment.

Agricultural Sector Reforms: Revitalizing agriculture

The TSP prioritized agricultural sector recovery through the National Agricultural Policy Framework (NAPF), introduced at a pivotal moment in Zimbabwe’s economic trajectory. The government sought to re-engage with the international community and stimulate economic growth by promoting agricultural investment.

The NAPF aimed to modernize Zimbabwe’s agricultural sector, with objectives including:

¶ Ensuring food and nutrition security.

¶ Improving agricultural productivity.

¶ Enhancing agricultural competitiveness.

¶ Promoting sustainable agricultural practices.

¶ Strengthening agricultural value chains.

To support these goals, the Agriculture Recovery Plan was launched. Key interventions included:

▪Provision of subsidized inputs under the “Command Agriculture” program.

▪Investment in irrigation infrastructure to ensure reliable water supply.

▪Facilitation of access to modern farming equipment.

▪Support for research into drought-resistant crops and climate-smart agriculture.

▪Implementation of price stabilization policies and improved market access.

By providing a comprehensive framework for agricultural development, the NAPF played a crucial role in guiding Zimbabwe’s agricultural sector towards sustainable growth and development.

Mining Sector Reforms: Enhancing transparency, accountability, and local participation

Reforms in the mining sector focused on policy adjustments to encourage investment while ensuring equitable resource distribution. The Mining Industry Development Policy, which envisions a transition towards a technologically advanced and diversified economy by 2030, introduced several key measures:

¶ Modification of indigenization requirements to allow flexible local participation.

¶ Enhancement of transparency in mining contracts to promote fair revenue-sharing.

¶ Development of local content policies to support domestic industries.

¶ Strengthening regulatory frameworks to enhance sector governance.

¶ Formalization of artisanal mining to reduce environmental degradation and increase government revenue.

These measures aimed to stimulate economic growth through increased productivity while ensuring local communities benefit from mineral resources. By fostering a more investor-friendly environment, the government sought to unlock the mining sector’s full potential.

Progress Towards Vision 2030

The productive sector reforms under the TSP played a pivotal role in stabilizing Zimbabwe’s economy, improving governance in state-owned enterprises, and attracting investment across key sectors.

While challenges remain, these initiatives have laid the groundwork for continued economic transformation under the National Development Strategy 1 (NDS1), bringing Zimbabwe closer to achieving its Vision 2030 aspirations.

In the coming weeks, we will dissect the milestones, endeavors, and achievements under each productive sector reform outlined above.

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