NEARLY all Zimbabwean firms are feeling the impact of the Israel and US war on Iran, with 99% reporting business disruption, according to a new survey conducted by the Confederation of Zimbabwe Industries (CZI).
Most companies face fuel cost increases of more than 20%, while over half are experiencing supply chain challenges that can trigger nationwide goods shortages.
The conflict, combined with Zimbabwe’s recent fuel price hike, is putting immense pressure on businesses, driving up operational costs and threatening timely delivery of goods — a scenario that can ripple into broader shortages and inflation for consumers.
The CZI survey, the first in a weekly series monitoring the war’s impact on industry, shows that Zimbabwean companies are under severe strain. From skyrocketing fuel costs to delayed raw material delivery, businesses are grappling with rising expenses and logistical hurdles that can disrupt the flow of goods across the country.
The crisis stems from last month’s escalation of long-standing tensions between the United States and Israel on one side and Iran on the other, which has disrupted global commodity markets, increasing the price of fuel.
In response, the government increased fuel prices on March 18 to US$2,17 per litre for petrol and US$2,05 for diesel, up from US$1,71 and US$1,77 respectively. Zimbabwe now sells the second most expensive fuel in the Sadc region after Malawi, with only the two countries pricing fuel above US$2 per litre.
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Much of the fuel cost is driven by taxes and levies, sparking backlash and prompting the government to establish a high-level inter-ministerial committee to craft measures to cushion consumers.
However, the CZI survey examining the conflict’s effects on industry shows that firms are under immense pressure.
Nearly all firms reported that the conflict is affecting their businesses, with only 1% indicating no impact. About 60% of firms reported a significant impact, 31% moderate and 8% slight impact,” CZI said.
Rising fuel costs have triggered increases in the costs of raw materials, transportation, imported inputs, insurance and shipping. Sixty-two percent of firms reported fuel cost rises of over 20%, 21% noted increases between 11-20%, while 14% experienced 6-10% rise. Only 3% saw a minimal cost growth of 0-5%.
“The findings highlight that most businesses are facing significant fuel cost pressures, with severe increases being the most common outcome,” CZI said.
According to the survey, transport and logistics costs have also surged, with 44% of firms reporting increases of 11-20% and 26% facing hikes above 20%. Raw material costs rose mainly by 6-10%, while import costs were split evenly between 6-10% and 11-20%. Insurance costs were mixed, with 38% reporting 11-20% increases and 21% over 20%.
Crucially, over half of businesses (56,1%) are experiencing supply chain disruptions, primarily due to delays in raw material delivery.
“These disruptions are likely to affect the availability and timely delivery of raw materials and finished goods, leading to production delays and increased operational uncertainty,” CZI said.
“As supply chains become less reliable, firms may be forced to seek alternative suppliers, hold high inventory levels or absorb additional costs, all of which can reduce efficiency and profitability.”
The results of the survey underscore the growing strain on Zimbabwe’s industrial and commercial sectors as global tensions ripple into local markets.