Zimbabwe is on the brink of a major economic transformation, as the Reserve Bank of Zimbabwe (RBZ) moves to phase out the use of foreign currencies in domestic transactions in favour of the recently introduced Zimbabwe Gold (ZiG) currency. According to a report in The Daily News, the central bank is preparing to enforce the exclusive use of ZiG in all local payments, a bold strategy aimed at restoring monetary stability and combating the chronic inflation and volatility that have long haunted the nation’s economy.
The move comes as part of broader economic reforms under the stewardship of RBZ Governor Dr. John Mushayavanhu, who has reaffirmed the central bank’s commitment to establishing a credible and stable financial system. Speaking to The Daily News, Mushayavanhu underscored the importance of building sufficient gold and foreign currency reserves to underpin the ZiG and strengthen public confidence in the local unit.
“We are confident that with careful monetary discipline and strong backing from our gold and forex reserves, the ZiG can restore trust in Zimbabwe’s currency system,” said Governor Mushayavanhu. “This is not a short-term fix, but a long-term commitment to ensuring economic stability and resilience.”
Introduced in April 2024, the ZiG is backed by a basket of precious minerals—primarily gold—held by the RBZ, and was designed as a response to years of economic instability marked by runaway inflation, currency devaluation, and a lack of confidence in previous local units. Its introduction was widely seen as an ambitious attempt to re-anchor the country’s monetary policy on a more stable and transparent foundation.
The shift towards exclusive use of the ZiG, however, presents both opportunities and challenges. On one hand, reducing dependence on the US dollar could help Zimbabwe reclaim monetary sovereignty and implement policy tailored to domestic needs. On the other hand, the success of this transition depends heavily on the RBZ’s ability to maintain fiscal and monetary discipline, enforce effective regulation, and manage public expectations.
Experts warn that any forced or premature de-dollarisation could backfire if the ZiG fails to inspire public trust or retain value. Zimbabweans remain cautious after past experiences with unstable local currencies, particularly the hyperinflationary collapse of the Zimbabwean dollar in the late 2000s and the short-lived RTGS dollar.
“Monetary policy is not just about issuing new notes,” said economic analyst Tendai Mazingi. “It’s about confidence. If people do not trust that the ZiG will retain its value over time, they will continue to hoard or transact in foreign currencies, regardless of policy.”
Zimbabwe Edges Toward Exclusive Use of ZiG as RBZ Pushes for Currency Stability
In recent months, the government has been taking gradual steps to promote use of the ZiG in formal sectors. Several state institutions, including the Zimbabwe Revenue Authority (ZIMRA), have started requiring fees to be paid in ZiG, while some schools, hospitals, and local authorities are following suit. However, in the informal sector and across most urban businesses, the US dollar remains dominant.
Dr. Mushayavanhu acknowledged these challenges but stressed the importance of allowing the transition to happen methodically. “We are not banning the US dollar overnight,” he said. “This is a process. What we are doing is laying the groundwork for a functional, home-grown currency system that meets the needs of the economy.”
To support this transition, the RBZ is investing in public education campaigns and expanding financial infrastructure, including efforts to improve digital payment systems and expand access to banking services in remote areas. Officials believe these efforts will help bridge the gap between the formal and informal sectors and encourage broader use of the ZiG.
Still, some observers believe deeper reforms are necessary to support the currency shift. These include tackling corruption, reforming public procurement, improving transparency in gold mining and trade, and strengthening the legal framework around monetary governance.
“This is a defining moment for Zimbabwe’s economy,” said Professor Nyasha Gwatidzo, a Harare-based economist. “If done right, the move to the ZiG could restore confidence and create a more stable environment for investment and growth. But if it’s mishandled, we risk repeating the same mistakes that led us here in the first place.”
As the country watches this economic transition unfold, the spotlight will remain on the Reserve Bank and government policymakers. Their ability to manage this delicate process with transparency, discipline, and accountability will determine whether the ZiG becomes the foundation of Zimbabwe’s economic recovery—or another failed experiment in monetary reform.
