ZiG gains ground nationally

Sikhulekelani Moyo Zimpapers Business Hub

FOR the first time since the Zimbabwe Gold (ZiG) currency was introduced, local currency settlements have climbed to 45 percent of National Payments System (NPS) transactions as of May 2026.

The Reserve Bank of Zimbabwe (RBZ) calls it a turning point.

But on the streets of Bulawayo, and across much of Matabeleland, a different story is unfolding – one of scarce physical cash, deep loyalty to the US Dollar and South African Rand, and a regional economy shaped more by cross-border trade.

Nationally, the picture is improving while on the ground, the ZiG is still fighting for space.

Responding to questions from Zimpapers Business Hub, RBZ Governor Dr John Mushayavanhu attributed the rise to intensive public awareness campaigns conducted by RBZ staff across the country in March 2026, followed by the release of upgraded BiG5 ZiG banknotes on 7 April 2026.

Since the launch of the BiG5 series – in ZiG10, ZiG20 and ZiG50 denominations – approximately ZiG400 million in new banknotes has been injected into circulation.

“Following the education and awareness campaigns by the Reserve Bank staff across the country in March 2026, there has been an overwhelming response in terms of BiG5 ZiG banknote uptake,” said Dr Mushayavanhu.

“This is unprecedented and is more than three times the issuance compared to previous trends. The Reserve Bank has noted increased use of local currency, as highlighted by improvement in the proportion of local currency settlement in NPS to 45 percent as of May 2026.”

In 2025, ZiG transactions via the NPS peaked at 43 percent in May of that year and averaged between 35 and 40 percent for most of the year.

The RBZ acknowledges that Matabeleland still lags behind the rest of the country in adopting physical ZiG notes.

Dr Mushayavanhu said economic agents in border regions tend to prefer foreign currencies due to the convenience of cross-border trade and travel – not necessarily a lack of confidence in the ZiG.

“Nevertheless, we note that uptake and demand for ZiG have generally improved countrywide, including Matabeleland, albeit slowly in this region,” he said.

“The Reserve Bank is encouraged by this notable development in the Matabeleland region and is confident that the increased stability in ZiG will support significant uptake in these areas.”

As a result, the RBZ said it would amplify its campaigns in border towns to encourage uptake. It is common for agents in border areas to use neighbouring countries’ currencies because of frequent trade and travel.

The central bank added that ZiG100 and ZiG200 denominations will be issued in due course, in line with economic developments and the roadmap towards a mono-currency regime.

While electronic ZiG transactions are becoming increasingly common, physical ZiG notes remain less visible than many would expect in Matabeleland’s retail markets, informal trading environments and day-to-day commerce.

That is the view of Bulawayo businessman and former Zimbabwe National Chamber of Commerce (ZNCC) vice-president for Matabeleland, Mr Louis Herbst.

“An interesting economic observation across much of Matabeleland is the relatively limited use of physical ZiG cash in everyday transactions,” said Mr Herbst.

He noted that Matabeleland’s economy is shaped by cross-border trade, remittances and long-established transaction habits. As a result, the US Dollar and South African Rand remain deeply embedded.

“Matabeleland has a unique economic landscape shaped by regional trade, cross-border commerce, remittances and long-established transaction habits,” he said.

“As a result, the US Dollar remains deeply embedded in commercial activity, with many businesses and consumers continuing to favour the currency they perceive as offering the greatest convenience and certainty.”

He added that informal traders and cross-border operators – often called omalayitsha dominate parts of the market and run what is essentially a rand and dollar-driven economy.

“Controlling this is the only way around making the ZiG more acceptable, with access to forex, but it’s a double-edged sword because there are many factors involved which are not an overnight fix,” said Mr Herbst.

He argues that the issue is not only cash availability but also confidence, utility and incentives. Currencies gain traction when users see clear advantages.

“History has shown that currencies gain widespread acceptance when market participants see clear advantages in using them,” he said.

“While ZiG remains a relatively new and growing currency, its adoption will ultimately depend on how effectively it becomes integrated into daily economic activity.”

To boost ZiG circulation, Mr Herbst has proposed targeted tax incentives for businesses that buy goods, services or inputs in ZiG. He argues that market-driven incentives would be more effective than regulation alone.

“Tax relief linked to ZiG-denominated transactions would encourage industry to transact more frequently in local currency, increasing demand, circulation and confidence throughout the economy,” he said.

Mr Herbst said strong currencies rest on confidence, liquidity, utility and acceptance.

“The strength of any currency is ultimately measured by its ability to move freely through the economy and support productive economic activity,” he said.

“As circulation deepens and participation broadens across all sectors, the foundations for greater stability, efficiency and economic resilience are strengthened.”

Analysts say the jump to 45 percent local currency settlement is a positive signal for ZiG stability. Sustained confidence will depend on continued price stability, adequate cash availability and consistent enforcement of ZiG as legal tender for domestic transactions.

The RBZ has said it will maintain its public education drive while monitoring cash demand and payments trends as Zimbabwe moves closer to a mono-currency regime.

Whether tax incentives alone can shift deeply embedded habits – or whether Matabeleland will need its own tailored approach – remains an open question.

For now, the ZiG is climbing nationally. The RBZ has the data to prove it. But in the borderlands of Matabeleland, the rand and dollar are not ready to step aside.

As Mr Herbst put it: “The objective should be to create an environment in which the currency becomes a natural and preferred medium of exchange, supporting growth, trade and prosperity for businesses and communities alike.”