Zimbabwe’s business community has sounded the alarm over the continued volatility of the Zimbabwe Gold (ZiG) warning that the instability is crippling industrial growth, disrupting planning, and deepening economic uncertainty. As inflation soars and confidence in the currency wanes, business leaders are urging the government to urgently implement structural reforms to stabilise the economy.
The latest concerns come after a steep 43% devaluation of the ZiG in September 2024, which shattered hopes that the new gold-backed currency would offer the stability that its predecessor, the Zimbabwean dollar (ZWL), failed to deliver. Instead, inflationary pressures have intensified, with year-on-year inflation climbing to 92.1% in May 2025, up from 85.7% in April — and projections indicate further deterioration in June.
Speaking at the Zimbabwe National Chamber of Commerce (ZNCC) Annual Conference held in Victoria Falls this week, ZNCC Chief Executive Officer Christopher Mugaga underscored how currency volatility continues to undermine industrial operations and frustrate recovery efforts.
“The dominant issue for ZNCC in both 2024 and 2025 has been the persistent demand for a stable and reliable local currency,” Mugaga told delegates. “The business community does not oppose the idea of a local currency. However, that currency must be predictable, credible, and anchored in strong fundamentals. Without that, rebuilding industry and restoring investor confidence remains a distant goal.”
Zimbabwe Business Leaders Raise Alarm Over Volatile ZiG Currency and Economic Uncertainty
The ZiG, introduced by the Reserve Bank of Zimbabwe (RBZ) in April 2024 as a gold-backed structured currency, was meant to stabilise the monetary system and reduce inflation. Despite initial optimism, the ZIG currency has struggled to gain traction among businesses and consumers alike. Most continue to favour more stable foreign currencies, particularly the US dollar, due to ongoing uncertainty around exchange rates and a lack of confidence in monetary policy.
Economists warn that this instability is having far-reaching consequences for production, imports, pricing, and wages. A Harare-based economist noted that the volatility has turned basic business operations into high-risk ventures.
“Without a stable currency, production becomes speculative. Businesses can’t plan imports, price goods accurately, or negotiate fair wages. This uncertainty permeates every sector of the economy and stifles long-term investment.”
Further complicating Zimbabwe’s economic picture is the country’s mounting debt burden. According to the International Monetary Fund (IMF), Zimbabwe’s total public debt hit US$21.2 billion in 2023 — approximately 96.6% of GDP. A significant portion of this debt is deemed unsustainable, and the IMF has called for comprehensive fiscal reforms and the resolution of external arrears.
Mugaga stressed that Zimbabwe’s debt crisis severely limits its access to long-term, affordable financing. “The debt overhang has elevated Zimbabwe’s risk profile to a point where attracting patient capital has become nearly impossible. Unless we address this urgently, we will remain locked out of global credit markets,” he said.
In its latest assessment, the IMF warned that continued deficit financing and inconsistent economic policies have placed undue pressure on the ZiG. It emphasised that restoring macroeconomic stability would require greater transparency, fiscal discipline, and a market-driven approach to currency and interest rate management.
ZNCC President Tapiwa Karoro echoed these concerns, calling on policymakers to adopt a more coherent and forward-looking economic strategy. He argued that Zimbabwe’s economic recovery hinges on structural transformation and better policy coordination.
“For sustainable growth and industrial resilience, Zimbabwe needs a comprehensive economic blueprint that includes fiscal consolidation, good governance, and a clearly defined currency transition plan,” Karoro said. “This is not just about the currency — it’s about creating an environment where businesses can thrive.”
Aside from ZIG instability, businesses are grappling with a host of other challenges. These include high and unpredictable taxes, aggressive revenue collection tactics by the Zimbabwe Revenue Authority (ZIMRA), low consumer demand due to declining purchasing power, and chronic policy inconsistencies. Industry leaders warn that unless these issues are addressed, Zimbabwe risks accelerating its de-industrialisation.
While government officials have defended the ZiG as a critical step towards achieving monetary sovereignty, private sector leaders remain sceptical. They argue that without broad public trust, the currency will continue to face resistance, particularly from informal traders and SMEs, many of whom have already reverted to operating in US dollars.
As discussions at the ZNCC conference continue, business leaders are expected to call for more transparent, inclusive, and evidence-based policymaking. They argue that restoring confidence in both the currency and government policy will be essential for stabilising the economy and reigniting growth.
Until then, the combination of a volatile currency and an unsustainable debt profile is likely to continue weighing down Zimbabwe’s economy — with industry, workers, and consumers all bearing the brunt of the uncertainty.
Source- Bulawayo24
