Source: CZI says 56pc of local firms impacted by Middle East war – herald
Sikhulekelani Moyo
Zimpapers Business Hub
THE Confederation of Zimbabwe Industries has said 56,1 percent of local firms have experienced supply chain disruptions, such as delays in the delivery of raw materials due to the impact of the United States-Israel conflict with Iran.
The US-Israeli conflict against Iran has created significant disruptions worldwide, highlighting the deep interconnection between geopolitics and the global economy.
Key energy infrastructure and shipping routes, particularly the Strait of Hormuz in the Gulf region, through which around 20 percent of global oil passes and a fifth of liquefied natural gas, have been affected.
Ocean carriers have rerouted vessels away from the Gulf and the Red Sea, taking longer routes around the Cape of Good Hope, which adds 8 to 15 days to Asia-Europe container transit times.
War-risk maritime insurance premiums have surged, with some insurers withdrawing cover for the region.
This has led to sharp increases in oil and gas prices and heightened market volatility.
Air freight is also heavily affected, with airspace in the region closed and major carriers suspending flights to the Middle East. Airlines like Emirates, Qatar Airways, and Etihad, which account for 13 percent of global air cargo capacity, have seen operations restricted, causing severe bottlenecks.
The conflict has halted over 33 percent of global urea shipments, impacting fertiliser availability and threatening global food production.
To assess the impact of the conflict on businesses in Zimbabwe, CZI conducted a rapid online survey to gather insights from firms on how their operations are being affected.
In a report titled “Tracking Iran-Israel-US Conflict Firm-Level Impact in Zimbabwe,” CZI said nearly all firms reported that the conflict is affecting their businesses, with only 1 percent indicating no impact.
Zimbabwe’s most influential industrial lobby said that, in total, about 99 percent of firms stated that their operations have been affected to varying degrees: significantly, moderately, or slightly.
Specifically, CZI reported that approximately 60 percent of firms reported a significant impact, 31 percent a moderate impact, and 8 percent a slight impact.
Overall, the findings show that the conflict is having widespread effects across almost all firms.
A majority of firms are experiencing increases not only in fuel costs but also across a wide range of other expenses, including raw materials, transportation and logistics, imported inputs, as well as insurance and shipping.
Together, these rising costs are placing significant pressure on their operations and profitability.
“Over half of the firms (56,1 percent) report experiencing supply chain disruptions mainly due to delays in delivery of raw materials, highlighting the widespread impact of the conflict on business operations,” said CZI.
“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.
“As supply chains become less reliable, firms may be forced to seek alternative suppliers, hold higher inventory levels, or absorb additional costs, all of which can reduce efficiency and profitability.”
CZI said the high proportion of affected firms underscores the significant strain the conflict is placing on supply networks.
The conflict has had a widespread and highly significant impact across nearly all sectors of the economy.
Industries such as wholesale and retail, transport, healthcare, and construction are almost entirely affected, reflecting severe disruptions to supply chains, services, and infrastructure.
In contrast, sectors like manufacturing, ICT services, and finance show a more varied impact, with a mix of significant, moderate, and slight effects, indicating some degree of resilience despite ongoing pressure.
“Overall, while all sectors are affected, the severity differs, with core economic and service industries experiencing the greatest disruption. The rise in fuel costs stands out across all sectors as the primary factor affecting businesses as a result of the Iran–Israel–US conflict,” said CZI.
“In addition, businesses are facing supply disruptions, higher distribution and shipping costs, and increased prices for raw materials.”
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