• Zimbabwe has proposed establishing a COMESA Circular Economy Fund to finance cleaner production, energy-efficient machinery, recycling infrastructure and the conversion of industrial waste into productive inputs
• COMESA already has a €40 million circular economy programme backed by the European Union, creating an opportunity to connect technical support with commercially viable industrial investment
• Zimbabwe's manufacturing capacity utilisation reached 55.9% in 2025, while high operating costs, unreliable infrastructure and limited access to affordable finance continue to constrain industrial competitiveness

Harare – Zimbabwe has proposed the establishment of a regional Circular Economy Fund to finance industrial modernisation, recycling infrastructure and cleaner manufacturing across the Common Market for Eastern and Southern Africa (COMESA), as the bloc seeks to address the investment constraints preventing businesses from adopting more efficient production technologies.

Speaking at the COMESA Green Industries Connect Conference in Harare on 19 October 2026, Industry and Commerce Minister N. M. Ndlovu called for a dedicated financing facility that would support manufacturers investing in energy-efficient equipment, resource recovery and the conversion of waste into commercially valuable products. The proposal comes as African industries face increasing pressure to reduce production costs, improve energy efficiency and develop more competitive regional value chains.

The proposed fund would represent a shift from policy commitments towards financing industrial transformation. However, its commercial significance will depend on how it is capitalised, the cost of financing offered to businesses and the extent to which projects generate measurable improvements in productivity, employment and environmental performance.

"In this regard, I propose that COMESA explore the establishment of a COMESA Circular Economy Fund to support viable enterprises investing in cleaner production, energy-efficient equipment, recycling infrastructure and the conversion of waste into productive inputs," Ndlovu said.

The proposal is particularly significant because COMESA has already secured substantial support for circular economy development. In August 2024, the regional bloc and the European Union launched the €40 million SWITCH to Circular Economy in Eastern and Southern Africa programme, intended to promote resource efficiency, sustainable business models and investment in circular industries.

That existing programme provides an institutional foundation for the proposed fund, although the two should not be treated as interchangeable. SWITCH supports the transition towards circular business practices, while a dedicated industrial financing facility could potentially address the capital requirements associated with equipment acquisition, factory modernisation and commercial expansion.

The financing distinction is critical because manufacturing transformation requires more than technical assistance. Businesses need capital to replace inefficient equipment, introduce recycling technologies, reduce energy consumption and develop products capable of competing in regional markets. Where financing is expensive or unavailable, even projects with long-term cost-saving potential can remain commercially unviable.

Zimbabwe's manufacturing performance illustrates the challenge. According to the Confederation of Zimbabwe Industries' 2025 Manufacturing Sector Survey, capacity utilisation reached 55.9%, while manufacturing output increased by 13% and turnover rose by 12%. The survey covered 388 companies across Zimbabwe's ten provinces, providing evidence of an improving production environment despite persistent structural constraints.

However, manufacturers continued to identify the high cost of doing business, unreliable infrastructure, limited access to affordable finance and dependence on imported raw materials among their major challenges. These pressures affect investment decisions because businesses must balance expenditure on new equipment against working capital requirements and the cost of maintaining existing operations.

Energy efficiency offers a particularly important opportunity. Zimbabwean manufacturers have historically faced electricity interruptions and substantial expenditure on backup generation, raising effective production costs and weakening competitiveness against regional producers. Investment in efficient machinery, renewable energy and industrial energy management could reduce some of these costs, although the commercial benefits would depend on equipment prices, financing terms and operational requirements.

The proposed COMESA fund could help narrow that investment gap by providing longer-tenor financing, technical support or mechanisms that reduce the risks faced by private lenders. However, Ndlovu's speech did not specify the fund's proposed size, contributing institutions, interest rates or implementation timetable, meaning its financing capacity remains undefined.

The Minister acknowledged the need for disciplined design, calling for sustainable financing and transparent eligibility criteria to ensure resources reach commercially sound projects with measurable industrial and environmental benefits. This requirement is important because concessional finance can support industrial development but can also produce weak returns if projects are selected primarily on policy objectives rather than financial viability.

Regional experience provides a possible financing model. The African Development Bank established the Africa Circular Economy Facility in 2022 with an initial €4 million contribution from Finland and the Nordic Development Fund. The facility supports regulatory development, private-sector innovation and technical assistance intended to promote circular business models.

The AfDB's approach demonstrates that dedicated financing mechanisms can provide an institutional framework for green industrial development, although relatively small grant facilities are not necessarily sufficient to finance major manufacturing plants. Large-scale industrial transformation may require a combination of grants, commercial loans, development finance, guarantees and private equity.

The opportunity is already visible in several African economies. Through its circular economy programmes, the AfDB has supported national policy frameworks and enterprise development, including a Benin action plan targeting a 25% recycling rate and the establishment of 300 circular economy businesses over ten years. These are policy targets rather than achieved outcomes, but they demonstrate how governments can connect environmental objectives with measurable industrial development priorities.

For Zimbabwe, recycling could become a more substantial manufacturing activity if businesses secure reliable supplies of recoverable materials, affordable equipment and markets for processed products. Plastics recycling can supply packaging and other manufacturers, while metal recovery, industrial by-products and agricultural residues offer opportunities to substitute selected imported inputs and reduce waste-disposal costs.

However, waste collection alone does not establish a profitable recycling industry. Commercial viability depends on consistent feedstock volumes, processing quality, transport costs and predictable demand from manufacturers. A financing programme that supports machinery without addressing these conditions risks creating underutilised facilities and businesses dependent on continued subsidies.

Ndlovu also identified Zimbabwe's cement industry as an area where cleaner technologies could improve efficiency. The Government is working with the Climate Technology Centre and Network on a National Decarbonisation Roadmap for the sector, with opportunities extending into steel production, mineral processing and other energy-intensive industries.

The economic importance is considerable because cement and steel are essential inputs into construction, infrastructure and manufacturing. Improvements in energy efficiency, water management and material recovery could lower operating costs while reducing environmental pressure. However, modernising these industries can involve substantial capital expenditure, making project financing and the reliability of infrastructure central to investment decisions.

Zimbabwe's recent investment in steel production and mineral processing also provides opportunities to examine how industrial by-products can be recovered and reused. Such activities could reduce waste and create secondary inputs for manufacturing, although the scale of commercial benefits would depend on technical feasibility and the availability of downstream buyers.

The regional dimension strengthens the investment case. COMESA's industrialisation strategy identifies agro-processing, textiles, leather, energy and mineral beneficiation among its priority sectors, creating opportunities for industries that depend on shared regional supply chains. A manufacturer producing recycled materials or energy-efficient components may require demand from several countries to justify investment at a competitive scale.

However, regional market access remains constrained by differences in product standards, testing requirements and regulatory procedures. Ndlovu called for greater harmonisation of green industrial standards and conformity assessments, arguing that improved coordination could reduce unnecessary compliance costs and facilitate trade.

The implication is that financing and market integration must advance together. Affordable capital can help businesses establish productive capacity, but manufacturers also need access to buyers and predictable rules governing cross-border trade. Without those conditions, regional financing could support projects that struggle to achieve sufficient sales volumes.

The Minister further urged greater participation by small and medium-sized enterprises, women and young entrepreneurs in recycling and resource recovery. Their inclusion could broaden employment opportunities and strengthen local industrial supply chains, particularly where informal waste collection is connected to formal processing and manufacturing businesses.

Yet smaller enterprises often face difficulties meeting collateral requirements, obtaining technical expertise and producing the financial records demanded by commercial lenders. A well-designed regional facility would need financing instruments proportionate to different business sizes, while maintaining credible standards for project selection and repayment capacity.

For Zimbabwe, the proposed fund also raises an important industrial-policy question. Government has prioritised domestic value addition, local content and export development under its wider economic strategy, but the success of these objectives depends on the ability of firms to invest in productive assets and operate competitively.

A circular economy financing mechanism could complement those priorities by reducing material losses, improving manufacturing efficiency and developing enterprises that supply domestic and regional markets. Its value would be greatest where environmental improvements produce identifiable commercial returns rather than depend indefinitely on public financial support.

The proposal's next test will be institutional. COMESA members would need to agree on financing arrangements, governance, project eligibility and measures for assessing economic performance. Coordination with the existing EU-backed programme and established development-finance institutions would also be necessary to minimise duplication and ensure that available resources support actual investment.

Zimbabwe's proposal therefore offers an opportunity to move regional green industrialisation beyond policy declarations. The country has an expanding manufacturing base, emerging recycling opportunities and industries where more efficient production could strengthen competitiveness.

The decisive outcome will not be the creation of another regional financing institution, but the volume of private investment it mobilises, the factories it helps modernise, the operating costs it reduces and the enterprises it enables to compete across COMESA.

For Zimbabwe and the wider region, green industrialisation will become economically meaningful when environmental efficiency translates into stronger manufacturing productivity, sustainable employment and increased value retained within African economies.

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