Online Reporter
Business Reporter
THE Government has provided an overview of the roadmap for Zimbabwe’s transition back to a market-driven domestic mono-currency system by 2030.
Zimbabwe’s monetary system has been largely characterised by a multi-currency system adopted in 2009, following a period of hyperinflation that rendered the local unit unsustainable at the time, which was largely dominated by the US dollar.
The decision to reintroduce domestic mono-currency is aimed at regaining control over its monetary policy, stabilising the economy by controlling inflation and interest rates and encouraging domestic savings and investment.
The goal is to regain levers of influencing economic dynamics, create a stable and predictable economic environment, strengthen local industries by stabilising input costs and build confidence in the financial system, rather than being vulnerable to external shocks.
While the US dollar has been instrumental in anchoring dollar inflation, using the US dollar as the primary currency presents challenges for Zimbabwe, including a lack of monetary policy control, a negative impact on trade competitiveness due to its strength and a shortage of small denominations, which creates practical issues for retail transactions
It has also caused capital erosion in the multi-currency setup, reduced investment and presented difficulties in business planning due to exchange rate volatility and liquidity constraints.
The strategy for the return to a mono-currency, detailed within the National Development Strategy 2 (NDS2) covering the period January 2026 to December 2030, says that the transition will be gradual and anchored on achieving durable economic stability.
Crucially, the Government has provided assurances that the shift will not result in the loss of value of assets currently held in foreign currency nor will it eliminate foreign currency accounts.
The NDS2 document specifies a number of critical conditions that must be met before a sustainable mono-currency system can be introduced.
These conditions, which the Government must satisfy, include achieving durable macro-economic stability, characterised by low and stable inflation, specifically at single-digit levels.
It also necessitates accumulating adequate foreign currency reserves equivalent to at least three to six months of import cover in the medium to long-term.
Furthermore, the strategy demands a stable exchange rate and an efficient foreign exchange management system that eliminates market segmentation.
Finally, the Government plans to increase demand for the ZiG through recalibrating the percentage of Government taxes and broadening the payment of public sector goods and services in local currency, alongside ensuring fiscal and monetary policy cohesion.
The Government noted that “significant progress” has been made towards meeting these conditions since the introduction of the ZiG in April 2024, and it remains committed to creating the necessary market confidence for the transition.
In a bid to safeguard public trust, the Government explicitly addressed concerns over asset protection in the multi-currency environment, where many savings and financial instruments are denominated in US dollars.
The NDS2 provides guarantees that the transition to a mono-currency will not entail the compulsory conversion of foreign currency holdings. Specifically, foreign currency accounts will continue to operate, pension funds’ holdings denominated in foreign currency will be maintained and US dollar-based stocks, shares and bonds, such as those on the Victoria Falls Stock Exchange (VFex), will remain protected.
“The transition to a mono-currency does not, therefore, entail doing away with foreign currency accounts, holdings of pension funds denominated in foreign currency and holdings of US dollar-based stocks, shares and bonds, such as shares held on the Victoria Falls Stock Exchange (VFex), including Treasury bills issued to smooth National Budget financing.
“Government assures all stakeholders that all the prior contractual obligations, including bank loans and advances made prior to the final date, will be preserved and honoured and economic agents will not lose money or value due to the transition to mono-currency,” reads NDS2 in part.
The Government assured all stakeholders that “all the prior contractual obligations, including bank loans and advances made prior to the final date, will be preserved and honoured,” and that economic agents will “not lose money or value” due to the transition.
As a critical step towards enhancing confidence in the domestic currency, the Reserve Bank of Zimbabwe is at an advanced stage of producing high-quality and durable ZiG banknotes.
The roll-out of these improved notes is expected to be undertaken during the first half of 2026. The bank clarified that the issuance of these high-quality notes is purely for durability and alignment with national identity and does not entail the introduction of a new currency.
“The issuance of improved high-quality ZiG banknotes to ensure durability and align with Zimbabwe`s national identity does not entail the introduction of a new currency,” reads NDS2 in part.
The Governor is expected to communicate the roll-out plan, modalities and timing in the February 2026 Monetary Policy Statement.
