• Mining and quarrying contracted 27% in Q1 2026
• Agriculture expanded 6.4% through larger maize, tobacco, cotton and soyabean plantings, improved livestock conditions, a 7.5% rise in milk output and stronger pork volumes
• Manufacturing grew 1.6% as prior capacity expansion, technology upgrades, more stable prices, exchange-rate predictability and working-capital deployment

Harare - Zimbabwe’s economy lost momentum in the first quarter of 2026 as a sharp contraction in mining weighed on growth, underscoring the economy’s continued reliance on the extractive sector despite improving performances in agriculture and manufacturing.

Gross Domestic Product grew 6.8% year on year in the first quarter, slowing from 8.5% recorded in the final quarter of 2025, according to data released by ZIMSTAT. On a quarter on quarter basis, economic activity contracted 3.3%, reversing the 2.5% expansion registered in the preceding quarter.

The moderation in growth reflects sharply divergent performances across sectors.

Mining and quarrying contracted 27% during the period, making it the weakest major industry in the economy. The decline matters because mining remains one of Zimbabwe’s largest sources of export receipts, foreign currency inflows, investment and fiscal revenue. Mining’s share of GDP fell to 11.7% in the first quarter from 15.5% in the preceding quarter.

ThE weak mining outcome is atttributed to seasonal production declines across most mineral commodities and restrictions on the export of unprocessed ores. The sector entered the quarter while producers were adjusting to beneficiation rules, operational disruptions and a sharp slowdown in output across several minerals.

Gold formed an important part of the weakness. The Ministry of Mines and Chamber of Mines recorded 9.894 tonnes of gold output during the first quarter, down from 14.731 tonnes in the final quarter of 2025. Fidelity Gold Refinery formal deliveries reached 9.312 tonnes, down from 13.331 tonnes over the same period.

The decline became a full-quarter delivery issue within the small-scale mining segment. Small-scale miners delivered 6.511 tonnes to Fidelity during the quarter, down from 10.346 tonnes in the preceding quarter. Primary producers delivered 2.801 tonnes, only slightly below the 2.985 tonnes delivered in the prior quarter. Small-scale operators accounted for 69.9% of all formal gold deliveries, placing the country’s gold outcome largely in the hands of artisanal and small-scale producers.

The introduction of a temporary 10% ZiG payment requirement compounded the pressure. The Reserve Bank stated that artisanal miners struggled to meet account-opening requirements attached to the policy, slowing formal deliveries into Fidelity’s buying system. A payment mechanism therefore became a direct production and foreign-currency issue for the segment responsible for almost seven out of every 10 kilograms sold through official channels.

Gold prices did not cause the decline. Average global gold prices rose 17.8% during the quarter to US$4,895.21 per ounce. Zimbabwe entered the period with a favourable bullion market. The loss came from physical output and formal delivery volumes, leaving the country unable to fully convert stronger international prices into additional export earnings.

PGMs added a separate processing problem. Zimplats produced 76,340 ounces of final six-element metal during the March quarter, down 56% from the prior quarter after scheduled maintenance on its smelter interrupted matte processing in February. Ore mined declined only 1%, while metal in concentrate fell 6%. The main loss therefore occurred at the conversion stage between concentrate and final metal. Zimplats carried around 63,000 ounces of accumulated concentrate stocks for processing by the end of its financial year.

The mining contraction also extended into bulk and base minerals. Chrome output fell to 178,425 tonnes from 511,878 tonnes in the preceding quarter. Nickel output fell to 1,486 tonnes from 4,100 tonnes. Copper output declined to 1,217 tonnes from 3,273 tonnes. Cobalt, diamonds, coal and ferrochrome also recorded lower output. The quarterly mining decline therefore came from a broad loss of tonnes across the mineral basket, reinforced by processing disruptions and the transition into tighter export rules.

Lithium provided the sector’s main area of resilience. Output rose 0.36% to 551,050 tonnes during the first quarter and stood 53.7% above production recorded in the same period last year. The Reserve Bank attributed the increase to stronger global prices, which rose to an average US$18,258 per tonne from US$9,970 a year earlier.

The February suspension of lithium concentrate exports introduced a new policy transition during the quarter as Government pushed producers toward local processing. Lithium output held firm despite the change, cushioning the wider mining sector. The increase was too small to offset the sharp losses across gold, PGMs, chrome, nickel, copper and cobalt.

Agriculture, fishing and forestry delivered one of the strongest performances in the economy, growing 6.4% during the quarter and contributing 13.9% of GDP. The outcome drew support from expanded planting in major commercial crops, firmer livestock conditions and stronger dairy and pork output.

Maize area increased 4.2% to 1.899 million hectares. Tobacco area expanded 17.1% to 167,542 hectares. Cotton area rose 26.5% to 154,938 hectares as the revival of the cotton-to-clothing value chain, import restrictions on selected textiles and investment in garment manufacturing improved demand and pricing incentives for farmers. Soyabean area increased 19.6% to 45,048 hectares on stronger demand from cooking-oil and livestock-feed producers.

Livestock conditions were assessed as fair to good across most parts of the country, supported by grazing and water availability. Pig slaughter volumes rose 22.2% to 72,393 head as domestic demand for pork strengthened. Fresh milk output increased 7.5% to 30.15 million litres, supported by investment in herd expansion and cow productivity.

Agriculture’s growth therefore extended beyond primary production. Higher soyabean output strengthens the edible-oil and animal-feed pipeline. Cotton supports textiles and clothing. Milk production feeds dairy processors. Tobacco, maize and livestock activity increase rural cash circulation, transport demand and trade volumes. The agricultural performance created a wider production base at a point when mining activity was weakening.

Manufacturing also returned to growth, expanding 1.6% during the quarter after contracting in the final quarter of 2025. The sector remained Zimbabwe’s largest contributor to GDP at 17.1%, ahead of agriculture at 13.9% and mining at 11.7%.

The first-quarter improvement came from a sector that entered 2026 with more productive capacity and stronger operating foundations. CZI’s 2025 Manufacturing Sector Survey recorded 13% output growth, 12% turnover growth and 6% net employment growth across surveyed firms. Capacity utilisation rose to 55.9%, the fourth-highest level recorded since 2009.

Investment helped create the production base behind the recovery. CZI found that 34.9% of manufacturers invested in capacity expansion during 2025, adding an average 8.5% to total sector capacity. A further 33.6% upgraded technology. Firms that invested in technology recorded average output growth of 19.9%, against 9.2% among firms that did not upgrade.

The more stable first-quarter macroeconomic environment gave manufacturers a better basis for deploying that capacity. Annual ZiG inflation had fallen to 4.38% by March, while the interbank exchange rate appreciated 2.54% during the quarter. Private-sector credit rose 4.37%, with manufacturing accounting for 13% of outstanding private-sector lending. Businesses directed credit toward recurrent expenditure, inventory build-up and fixed capital investment, supporting factory throughput.

Manufacturing’s recovery therefore rested on capacity investment, technology upgrades, greater utilisation of existing plants, more stable pricing conditions and working-capital support. The sector’s growth carries strategic importance because it raises domestic output at a time when export-oriented mining volumes weakened.

The conflict involving the United States, Israel and Iran added pressure late in the quarter. It did not cause the broad Q1 mining contraction, which had already emerged through seasonal output declines, payment disruptions, processing shutdowns and export-policy transitions. The conflict intensified the cost environment during March and raised the risks facing mining, agriculture and manufacturing in the second quarter.

Brent crude rose from about US$68 per barrel to above US$100 per barrel at the height of the disruption. Zimbabwean petrol prices rose from US$1.56 per litre in February to US$2.17 in March. Diesel increased from US$1.52 to US$2.05 per litre. The Reserve Bank found that fuel represented 13% of manufacturing costs, 22% of agricultural costs and 43% of transport costs among surveyed firms.

The fuel shock reached companies through diesel-intensive mining equipment, transport, imported raw materials, freight and longer supply chains. Ninety-four percent of firms surveyed by the Reserve Bank reported pressure from fuel-price increases. Ninety-one percent faced higher raw-material costs. Seventy-two percent reported longer import lead times, while 37% of exporters faced shipment challenges.

Zimbabwe’s first-quarter GDP outcome therefore shows an economy growing through agriculture and manufacturing while its mineral engine lost physical output. Mining weakened because gold deliveries fell, PGM processing was interrupted, bulk mineral production declined and export-policy changes were still working through operations. Lithium strengthened and limited the scale of the decline.

The next quarter will determine whether the mining setback clears. Small-scale gold deliveries, payment-system access, Zimplats’ conversion of concentrate stocks into final metal, lithium export clearances and fuel-cost transmission into production margins now carry greater weight for growth, exports and foreign-currency liquidity.

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