• NRZ’s spare-parts duty rebate has been renewed for another two years
• Only 60 of NRZ’s 168 locomotives are recorded as operational
• Freight must rise 50% this year to reach NRZ’s 3.01 million-tonne target

Harare - Zimbabwe has extended the National Railways of Zimbabwe’s duty rebate on engine spares, special-purpose motor vehicles and components for another two years, continuing a tax concession that has operated across successive attempts to restore the country’s rail capacity.

Statutory Instrument 144 of 2026 moves the expiry date from 4 August 2026 to 4 August 2028. It continues the facility provided under the Customs and Excise regulations rather than introducing a new intervention.

The previous arrangement covered the period from 5 August 2024 to 4 August 2026. Before that, SI 139 of 2022 granted the same category of relief for another two-year period from August 2022. A similar extension under SI 75 of 2020 covered the period through the end of 2021. The latest instrument therefore extends a policy that has been available to NRZ across several rehabilitation cycles.

The condition of the railway provides a harder measure of what those interventions have achieved.

NRZ records a fleet of 168 locomotives, of which only 60 are operational, with poor reliability. Of 7,153 wagons, 3,641 are stabled with defects, leaving 3,512 in service. Only 108 of 283 passenger coaches are in use.

Infrastructure constraints extend beyond rolling stock. About 10% of NRZ’s 2,760-kilometre network is subject to speed restrictions, while its mainline Centralised Train Control system is no longer functioning. The 313-kilometre electrified section between Dabuka and Msasa has also been affected by vandalism severe enough to suspend electric locomotive operations.

The renewed rebate consequently enters an operating system where imported spare costs are one constraint among several.

The facility lowers the customs cost attached to qualifying components required to repair locomotives, wagons and specialised equipment. For NRZ, which is attempting to recover existing assets while pursuing larger recapitalisation funding, that reduces part of the expenditure required for refurbishment.

Successive extensions have, however, not restored the railway to sufficient capacity.

NRZ transported 2.01 million tonnes of freight in 2025 and is targeting 3.01 million tonnes in 2026. Reaching the target requires roughly one million additional tonnes, an increase of close to 50% in a single year. Management expects revenue to increase from US$44.41 million to US$82 million during the same period.

The size of that proposed recovery puts physical fleet restoration ahead of the tax concession as the relevant performance measure.

NRZ’s first turnaround phase includes refurbishment of locomotives and 540 wagons, together with plant servicing. The railway expects restored core capacity to support its return to operating profitability.

Its own recapitalisation assessment illustrates how much further the recovery has to travel. NRZ has identified refurbishment of 15 mainline locomotives and 13 shunting locomotives alongside the acquisition of 24 new mainline locomotives. It also identifies refurbishment of 700 wagons and acquisition of another 200 as requirements for improving fleet reliability.

The financial requirement extends well beyond the savings available from customs relief.

NRZ estimates that approximately US$400 million is required in the short to medium term to restore operational capacity. The requirement covers rolling stock, track, signalling, telecommunications, workshops, plant and information technology.

That broader funding deficit has persisted alongside the duty concessions.

The experience of the previous decade also shows that access to additional equipment can lift volumes when the assets are actually deployed. In 2018, NRZ leased locomotives and 200 wagons from South Africa’s Transnet as an interim capacity intervention. Cargo transported between April and June that year increased 13.5% to 856,476 tonnes compared with the corresponding period a year earlier. The dedicated wagons were deployed partly into chrome export traffic.

The relationship between usable equipment and freight throughput is therefore already visible in NRZ’s operating history.

Zimbabwe’s current industrial structure makes the capacity deficit increasingly consequential. Mining expansion in chrome, lithium, ferrochrome and steel is increasing the volume of bulk commodities and intermediate products that have to move between mines, processing plants and export corridors. NRZ’s network also connects Zimbabwe with Botswana, Zambia and the Democratic Republic of Congo and with port routes through South Africa and Mozambique.

A weak railway transfers part of that freight requirement onto roads.

NRZ’s recapitalisation assessment identifies expensive road haulage as one of the consequences of unreliable rail services for exporters. It also identifies reduced road maintenance and accident costs among the potential gains from shifting heavy freight back onto rail.

The economic case for rehabilitation therefore extends beyond NRZ’s own financial recovery. The railway sits inside the cost structure of mining, manufacturing, agriculture and regional trade.

The latest rebate does not establish that those logistics costs will fall. Its contribution is narrower. It removes customs duty from qualifying imports that NRZ needs to keep equipment operating and return defective assets to service.

After repeated extensions, the concession can now be judged against a clearer set of physical outcomes.

NRZ has 108 locomotives outside its recorded operating fleet and 3,641 wagons stabled with defects. Its 2026 plan requires freight volumes to increase by about half. Its broader recapitalisation requirement remains around US$400 million.

Those numbers place a measurable burden on the latest two-year extension. Fleet availability has to improve, refurbished wagons and locomotives have to remain serviceable, and additional capacity has to convert into freight volumes.

SI 144 keeps one rehabilitation cost below what it would otherwise have been through August 2028. The railway’s condition after several earlier rebate periods shows why continuation of the concession cannot itself serve as evidence of recovery. The useful measure is now the conversion rate between fiscal support, serviceable rolling stock and freight moved.

NRZ’s 3.01 million-tonne 2026 target provides the first near-term test, while fleet availability will establish whether the railway is building capacity that can persist after another rebate cycle ends.

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