The government’s renewed push toward phasing out the United States dollar in favour of the Zimbabwe Gold (ZiG), introduced in April 2024, signals a firm commitment to de-dollarisation. But the pace and tone of the latest messaging suggest a policy drive that may be running ahead of economic realities.
The Reserve Bank of Zimbabwe (RBZ) said at the weekend that it is “fine-tuning the foreign exchange market” in preparation for a transition to a mono-currency system, adding that a “robust and efficient framework would facilitate a market-determined exchange rate that accurately reflects the true value of foreign currency”. While authorities have previously indicated that the shift would be conditions-based, recent remarks appear more assured, with state media suggesting the transition will be “seamless” and “risk-free”.
On the ground, however, conditions do not yet support that level of confidence. Questions persist around the availability, circulation and broader acceptance of the ZiG. These are not minor technicalities. They go to the heart of whether a local currency can function as a credible store of value and medium of exchange.
More critically, monetary policy in Zimbabwe operates under a heavy burden of history. Confidence in local currency systems was severely eroded during the 2008–2009 collapse of the Zimbabwe dollar, which wiped out savings, and again during the 2019 currency reforms that introduced a 1:1 exchange framework with the US dollar, only for it to unravel. These episodes continue to shape public expectations and behaviour. Any transitional plan that does not explicitly address this legacy risks being met with resistance, regardless of its theoretical merits.
There are also emerging contradictions that policymakers must confront. The RBZ has announced plans to introduce higher denomination ZiG notes — ZiG50, ZiG100 and ZiG200 — yet lower denominations such as the redesigned ZiG10 and ZiG20 appear increasingly scarce in circulation. This points to supply inconsistencies that could undermine transactional efficiency, particularly in an economy where cash still plays a significant role.
At the same time, the local currency’s limited usability remains a concern. For a mono-currency system to function, ZiG must be universally accepted, including for fuel purchases and key government services. Fragmentation, where the currency is usable only in select segments or regions, weakens its credibility and entrenches parallel systems.
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External pressures further complicate the picture. Rising global oil prices, partly linked to tensions in the Gulf region, are already feeding into higher transport and commodity costs. In such an environment, talk of a currency transition without deep market confidence risks amplifying inflationary pressures and undermining fragile stability.
Before setting firm timelines, authorities may need to demonstrate, through clear and measurable outcomes, that ZiG can sustain stability, liquidity and broad-based acceptance. Without that foundation, talk of a near-term mono-currency regime appears premature and, to many, unsettling.