ZIMBABWE’S most influential industry bodies this week delivered an unusually blunt warning to the Reserve Bank of Zimbabwe (RBZ), cautioning that fragile macroeconomic stability cannot be legislated into permanence through what they term “coercive” mechanisms.
In detailed submissions ahead of the forthcoming Monetary Policy Statement, the Zimbabwe National Chamber of Commerce (ZNCC) and the CEO Africa Roundtable (CEOART) described a policy environment increasingly defined by administrative pressure rather than market-earned confidence.
Their intervention places corporate Zimbabwe on a subtle but unmistakable collision course with authorities who, in recent months, have sought to project an image of durable recovery under a tight monetary regime.
Taken together, the papers sketch growing tension between policymakers eager to showcase stabilisation and industry leaders grappling with shrinking liquidity, punishing borrowing costs and persistent uncertainty, conditions that have already claimed fresh corporate casualties.
The business leaders argue that confidence, recently showcased internationally by Finance, Economic Development and Investment Promotion minister Mthuli Ncube at the World Economic Forum, was externally anchored, conditional and potentially reversible.
“The observed stability is occurring under highly controlled monetary and financial conditions,” reads the ZNCC submission dated February 9.
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It warns that “a premature or administratively enforced shift toward mono-currency risked triggering capital flight”.
It is one of the clearest acknowledgements yet from organised business that what authorities describe as stability is being sustained by tight controls and regulatory pressure.
“Without adequate reserve buffers and credible convertibility, forced de-dollarisation would undermine business planning,” the chamber said.
In perhaps the most politically-charged line of its submission, the ZNCC fired a broadside at what it called “compulsion”.
“De-dollarisation should be earned through sustained stability, not legislated through compulsion,” it told RBZ governor John Mushayavanhu.
The chamber reframed Zimbabwe’s monetary transition as one that must be market-led rather than statute-driven.
“Laws compelling tax payments in the currency of trade signal weak confidence in ZiG,” the ZNCC’s five-page paper said.
Analysts say if confidence were organic, legal compulsion would be redundant.
The chamber’s own survey data reinforces its warning. It says 76% of businesses believe macroeconomic conditions are not yet adequate to support full de-dollarisation, while about 84% prefer either the US dollar or a multi-currency regime. Only a minority back a ZiG mono-currency system.
CEOART, which represents chief executives from some of Zimbabwe’s largest corporations, adopted even sharper language.
On contentious foreign exchange surrender requirements, it warned industry was effectively being short-changed in funding the state.
“Where surrendered proceeds are not honoured immediately, the mechanism becomes a coercive liquidity extraction tool,” CEOART said.
“Failure to guarantee immediate settlement converts surrender requirements into involuntary state financing, undermines exporter confidence, distorts export competitiveness (and) ultimately reduces formal foreign currency inflows.”
The phrases “coercive liquidity extraction tool” and “involuntary state financing” are rare in formal monetary consultations, and signal the depth of corporate frustration.
CEOART’s broader assessment was equally sobering.
“Zimbabwe’s present stability is externally-anchored and confidence-sensitive,” it warned.
The grouping argued that the country’s macroeconomic equilibrium is not underpinned by endogenous monetary strength, but by exchange-rate anchoring “under a de facto multicurrency regime”.
“Zimbabwe’s present macroeconomic stability is best understood as exchange rate anchored stability under a de facto multi-currency regime, rather than endogenous monetary strength. Price stability and transactional predictability are currently sustained by currency substitution and US dollar anchoring,” CEOART said.
Independent economists echoed that view, noting that stability presently rests on the very multi-currency framework policymakers appear determined to move beyond.
On currency reform, CEOART cautioned: “Dedollarisation, if perceived as administratively driven rather than confidence-led, risks triggering currency substitution intensification, liquidity segmentation, parallel market expansion”.
“A non-coercive, performance based convergence framework is, therefore, essential. Eliminate coercive or implied dedollarisation timelines. Without reciprocity, compliance rationally collapses,” it added.
Beyond the coercion debate, both organisations raised substantive monetary concerns. The ZNCC criticised the prevailing interest rate regime.
“The bank policy rate of 35%, while justified on inflation expectations, has translated into ZiG lending rates of 40% to 47%, significantly constraining access to credit for productive sectors despite the Targeted Finance Facility,” it said.
ZNCC warned that high real borrowing costs are suppressing investment and eroding competitiveness.
CEOART echoed concerns over the cost of capital, structural informalisation and weak monetary transmission, arguing that tight policy settings combined with regulatory burdens are accelerating financial disintermediation.
But it is the repeated references to “coercion”, “compulsion”, “forced shifts” and “highly-controlled stability” that ultimately define the tone of this week’s submissions.
Economists told the Zimbabwe Independent that corporate Zimbabwe is not rejecting reform, it is questioning whether confidence can be manufactured through regulation.
“As one submission concludes: stability without credibility is transitory,” said Tapiwa Sibanda, head of strategy at Trade Winds.