Zimbabwe’s pursuit of a stable, sovereign currency has always been both a political and economic project—an attempt to reclaim monetary autonomy after decades of instability, hyperinflation, and reliance on foreign currencies.
The recent pronouncement by the Reserve Bank of Zimbabwe Governor, John Mushayavanhu, that the country will “continue and entrench the current trend of foreign currency reserves accumulation” through “strategic mineral purchases” in 2026, is thus a continuation of this long and precarious journey toward currency credibility.
It is a vision rooted in the nation’s ambition to make the ZiG—a currency introduced in April 2024—the sole legal tender by 2030. But beneath the optimism lies the issues of macroeconomic choices, structural weaknesses, and historical lessons that must be confronted honestly if this new monetary experiment is to succeed where others have failed.
To begin, Zimbabwe has clearly done some things right. The decision to rebuild foreign currency reserves through strategic mineral purchases and export surrender mechanisms is, on its own, a rational approach. A small, open economy like Zimbabwe—vulnerable to exogenous shocks, commodity price fluctuations, and political uncertainties—requires a strong reserve buffer. Mushayavanhu is correct in asserting that “maintaining the current trend of foreign currency reserves build up would enable [the Reserve Bank] to meet the desired target in the near to medium term, for the smooth transition to mono currency.”
By December, the country’s reserves had grown to $1.1 billion from just $276 million in April—a fourfold increase that represents tangible progress. The accumulation of reserves does strengthen the central bank’s ability to defend the local currency and manage volatility. Moreover, the decision to accumulate precious minerals as part of the reserves basket shows innovation; it is not unlike the strategies pursued by resource-rich economies such as Kazakhstan or even Russia, whose reserves historically included significant gold holdings to hedge against exchange risk.
However, the fundamental question is whether this strategy alone—anchored in mineral accumulation—can constitute a sustainable macroeconomic path toward a viable mono-currency system. The answer, if one is to be frank, is that while commendable, it is insufficient. Zimbabwe’s currency crises have never been solely a function of reserve inadequacy; they have been rooted in deeper structural failures: fiscal indiscipline, low productivity, policy inconsistency, and erosion of public trust in institutions.
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Since the early 2000s, the Reserve Bank has oscillated between expansive quasi-fiscal policies and contractionary stances, often in response to political rather than economic imperatives. The collapse of the Zimbabwe dollar in 2008, the abortive bond note experiment of 2016, and the short-lived RTGS dollar of 2019 all carry one message—without institutional credibility, no currency can survive, however nobly designed.
Mushayavanhu’s optimism that “a growing reserve chest will further entrench ZiG stability and external shock resilience” is valid in theory but incomplete in scope. Stability cannot be purchased through reserves alone; it must be earned through consistent and transparent policy, fiscal prudence, and sustained confidence-building measures. Foreign investors and local businesses alike must believe in the permanence and convertibility of the ZiG.
The fact that the ZiG accounts for only about 40% of daily transactions after nearly two years of introduction is telling—it suggests either a lack of accessibility, trust, or both. In countries that have successfully transitioned to strong national currencies after crisis—such as Ghana post-1983, or even Rwanda in the early 2000s—the transformation was not merely technical but institutional. Monetary and fiscal functions were sharply separated, policy was depoliticised, and governments committed to predictable, market-anchored reforms.
Furthermore, Zimbabwe’s macroeconomic environment still displays signs of fragility. Deficits continue to re-emerge in various forms, whether through quasi-fiscal operations or through unfunded policy initiatives tied to social and electoral considerations. Inflation, though subdued compared to the hyperinflation years, remains volatile, and price stability is far from entrenched. The governor’s faith in “sustained export surrender enforcement” and “robust external sector” presupposes stable global commodity markets—but history has shown that dependence on minerals is a double-edged sword.
A downturn in gold or platinum prices would instantly erode export receipts and weaken reserve accumulation. The country’s fixation on primary commodities also sidelines industrialisation and value addition—sectors that build lasting currency demand and job creation.
From a broader macroeconomic standpoint, Zimbabwe’s challenge is not merely about creating reserves but about creating value. If the local economy remains predominantly extractive, reserve accumulation will always be vulnerable to external shocks. The ZiG, like its predecessors, will survive only if it is backed by domestic production that generates real, tradable value.
Countries such as Botswana offer a compelling example: though resource-rich, Botswana made its mineral wealth serve as the foundation for long-term stability through disciplined fiscal rules, sovereign wealth accumulation, and meticulous investment in non-mining sectors. Zimbabwe, too, must channel its mineral revenues into productive capital formation—not recurrent consumption or central bank operations.
Long-term stability also demands the rebuilding of public confidence in the monetary system. The decades-long erosion of trust cannot be repaired by decree. Citizens must believe that the central bank will not debase their savings or change currencies overnight. Institutions like the Reserve Bank must embody predictability and transparency; its governor should be seen as a steward of stability, not an agent of expedient policy. This means returning to technocratic discipline: publishing detailed reserve compositions, committing to inflation targets, and ensuring independence in monetary decision-making.
The dream of a mono-currency economy by 2030 is ambitious, but ambition without alignment to fundamentals is perilous. For it to be feasible, the ZiG must first dominate transactional use organically, not by compulsion. It must command confidence from domestic businesses and the informal sector alike. The economy must experience at least a half-decade of low inflation, moderate fiscal deficits, and export-led growth before dedollarisation can be credibly achieved. Otherwise, the nominal gains in reserves will be swept away by renewed speculation, and the cycle of distrust will begin anew.
Therefore, while Zimbabwe deserves credit for making reserve accumulation a national priority and for cautiously steering away from reckless monetary expansion, it still grapples with structural and institutional infirmities that cannot be papered over by mineral wealth. The governor’s confidence that “this will be achieved via sustained export surrender enforcement, strategic mineral purchases and our robust external sector” represents a necessary but incomplete vision. What the country needs now is a grander reordering—one that couples sound monetary policy with real production, institutional integrity, and fiscal restraint. Only then can the ZiG become not merely a denomination, but a symbol of restored national credibility.