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Judith Phiri, Business Reporter
THE Ministry of Finance, Economic Development and Investment Promotion has said local authorities and public entities will report their half-year financial statements in the new Zimbabwe Gold (ZiG) currency, following its introduction in April this year.
ZiG is a structured currency backed by a reserve of foreign currency and precious metals, primarily gold, held by the Reserve Bank of Zimbabwe (RBZ). Since its introduction in early April, the ZiG has shown incremental growth against the US dollar.
Speaking on the Impact of the new ZiG currency on financial reporting at the Urban Development Corporation (UDCORP) 2024 International Public Sector Accounting Standards (IPSAS) and Tax Training Workshop in Bulawayo on Wednesday, the Ministry’s Principal Accountant in the Secretary to the IPSAS Project Implementation Team, Mrs Precious Mugumbate said there was a transition to the presentation of the financial statements.
“As the Government of Zimbabwe we are implementing IPSAS, it’s a seven-year journey which started in 2019 up to 31 December 2025. So, in line with the presentation of financial statements, there was an introduction of ZiG along the way while we had already started implementing IPSAS,” she said.
“Entities that are implementing IPSAS are supposed to produce IPSAS-compliant financial statements and in the process, producing transitional financial statements. So, as ZiG was introduced on the 5th of April 2024, we are expecting the entities to produce financial statements for 30 June 2024, which are half-year financial statements but they are affected by two currencies Zimbabwean Dollar (ZWL) and ZiG.”
She said in terms of Statutory Instrument (SI) 60 of 2024 it highlighted the introduction of ZiG and how to present the financial currency.
Mrs Mugumbate said for those that had not presented their financial statements for 2023 as of 31 December 2023, when the Zimbabwean dollar was still in effect, because of the introduction of the ZiG which happened after the reporting date, it has to be reported in the financial statements as a disclosure in the notes.
She added: “The ZiG was introduced to stabilise the economy. So what we are saying is in line with SI 60 2024, the financial statements are now going to be presented in line with the local currency, which is the ZiG. We also highlighted in the manual that we offered in 2023, the Zimbabwe Financial Reporting Manual (ZFRM) that in our reporting, our reporting currency is our local currency and in this case what it means is for our financial statements of 2024 they are now supposed to be presented in the local currency which is the new ZiG.”
Mrs Mugumbate said local authorities were translating all the transactions that were done using the ZWL to ZiG as it is now the official currency of the country.
She said when they talk about the issue of the presentation of financial statements and functional currency, the functional currency was determined by an entity.
“The way you determine your functional currency is determined by the transaction that you carry out, the assets, the payment that you do in line with the expenses and the payments that you do in line with your salaries, it covers what the functional currency of an entity is, but for a reporting currency now it’s strictly ZiG for all Government entities because that is how we can compare our financial statements in the financial information needed for comparative in term of financial reporting,” she said.
Meanwhile, Zimbabwe embarked on the smooth migration from the rule-based approach to the accrual-based IPSAS framework by December 2025.
The adoption of IPSAS is crucial for enhancing transparency, accountability, and comparability of financial information and Zimbabwe has made significant progress towards its implementation.
The accrual-based IPSAS is focused on recognising the assets that the Government has unlike before where the country’s balance sheet only showed liabilities (domestic and foreign debt).
Online Reporter
Bongani Ndlovu