Almot Maqolo, Staff Writer 
A STAGGERING 158 companies in the engineering, iron, and steel sector deregistered in 2023, marking a 5 166,67 percent increase from the three recorded in 2022, according to a new report.
The industries are a significant pillar of the country’s economy, generating over US$1,45 billion in exports and bolstering the much-needed foreign exchange reserves. However, the sector is grappling with numerous challenges, including “regulatory burdens,” and power cuts.
The year 2023 saw the highest number of company deregistrations in the sector since 2020, indicative of a challenging business environment. Despite this, 15 new companies entered the sector in 2023, as said in the State of the Industry Report by the Engineering, Iron and Steel Association of Zimbabwe (EISAZ). In comparison, 13 and three companies in the EIS sector deregistered in 2021 and 2020, respectively. The sector employs between 12 400 to 13 800 individuals.
As of March 2024, the sector had 407 registered companies employing 13 020 people, predominantly males. The EISAZ report underscores the need to address the sector’s challenges to enhance its competitiveness, growth, and contribution to the economy.
While the sector contributes more than US$1 billion to the country’s exports, the highest contribution of US$1,61 billion was made in 2021. The sector’s resilience is evident in its export performance during crises such as Covid-19, with exports increasing significantly in 2020-2021, as stated in the EISAZ 2023 state of the industry report.
On average, the sector has contributed 22 percent to total exports in the country between 2005 and 2023. In 2007, the EIS sector recorded the highest share in total exports of 39,6 percent, at a time when the overall economy was grappling with a hyperinflation crisis, further highlighting the sector’s resilience.
The EIS sector primarily exports raw materials and goods with limited value addition and beneficiation. Experts believe there is potential for moving up the value chain towards the production of high-value end products or final products, aligning with the National Development Strategy.
According to the report, a conducive environment for competitive production and market expansion for local enterprises is crucial for the Africa Continental Free Trade Area (AFCFTA) to yield favourable outcomes for Zimbabwe.
