Online Reporter
Zimpapers Business Hub
The Zimbabwe Association of Pension Funds (ZAPF) says that although the planned shift to a domestic mono-currency regime will bring positive spinoffs for the economy, it should be carefully managed to protect pension assets and restore confidence in the retirement savings sector.
Zimbabwe uses a multicurrency monetary system dominated by the US dollar and Zimbabwe Gold (ZiG), but plans to switch to a domestic mono-currency from 2030.
The roadmap for the currency transition is outlined in the National Development Strategy 2 (NDS2, 2026-2030), which will guide economic planning and development towards the country’s Vision 2030 target of an upper-middle-income economy.
A strong domestic currency (ZiG) will enable the country to regain monetary control, stabilise prices, boost local industrial performance and competitiveness, simplify planning and achieve full economic sovereignty while reducing vulnerability to US dollar shocks.
Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube is, however, on record stressing that the country will only shift to a domestic monocurrency when all key fundamentals have been achieved.
The key fundamentals, the minister said, include fiscal discipline (low budget deficit, controlled spending), foreign currency reserves (3-6 months import cover), monetary policy credibility (inflation targeting), low inflation and stable exchange rates.
On the currency front, the ZiG currency has already proved its mettle, remaining largely stable since its introduction in April last year, while the country has witnessed a drastic fall in inflation and the exchange rate remained largely stable.
Further, fiscal discipline and tight monetary policy have been the biggest factors in restoring stability and confidence in the domestic currency, while Zimbabwe has seen rapid growth in foreign currency reserves to US$1 billion by October 31, equivalent to about 1,2 months of import cover.
This comes as the insurance industry has been pondering the implications of the proposed currency change on existing contracts and policies.
In its analysis of the NDS2 and the 2026 National Budget, ZAPF said the proposed currency road map showed positive intent by authorities, particularly the cautious approach to avoid mistakes similar to the currency of 2019, which eroded pension values and savings.
“Under NDS2, the Government commits to a market-led transition to a mono-currency regime, with clear preconditions that must be met before full adoption.
“These include durable macroeconomic stability marked by single-digit inflation, foreign currency reserves sufficient to cover between three and six months of imports and a stable, market-determined exchange rate.
“This policy direction will have a significant bearing on the pension sector and will shape the investment, regulatory and operational environment for pension funds over the next five years,” ZAPF said.
To reinforce opportunities arising from the proposed currency framework while mitigating risks, the ZAPF said it would engage fiscal and monetary authorities to ensure stronger legal protection of pension assets.
“The association will push for the ‘Asset Protection Clause’ contained in NDS2 to be formally codified into a Statutory Instrument,” reads part of the report.
