HARARE – Zimbabwe’s banking sector has expressed support for President Emmerson Mnangagwa’s initiative to establish the Zimbabwe Gold (ZiG) as the sole currency by 2030.
However, this endorsement comes with conditions: the nation must first curb inflation and accumulate sufficient reserves.
According to Bloomberg, Lawrence Nyazema, president of the Bankers Association of Zimbabwe, stated, “We are committed to developing a roadmap that will lead us to a mono-currency by 2030. The timeline can be accelerated if we effectively manage ZiG inflation and build reserves.”
Zimbabwe had initially planned to maintain its current multi-currency system until the end of the decade. Yet, in a recent announcement, Mnangagwa indicated an intention to expedite the transition to a single currency, potentially achieving this within the next two years.
Central Bank Governor John Mushayavanhu advocates for a phased approach to de-dollarization.
He projects an increase in transactions conducted in ZiG from the current 20% to 30% by the end of this year, reaching 40% by the end of 2025, and 50% by the close of 2026.
Mushayavanhu believes that once the local currency accounts for half of all transactions in Zimbabwe, there will be no need for legislative action to enforce a mono-currency system, as public confidence in the ZiG will naturally ensure its dominance.
This strategy aligns with Mnangagwa’s vision, ensuring the administration’s commitment to the multi-currency system until 2030 while gradually shifting market dominance to the local currency.
Since its introduction on April 5 this year, the ZiG has remained stable against the US dollar, which currently facilitates 80% of transactions in the country.
The ZiG is supported by foreign currency and gold reserves, which have increased from US$285 million in April to US$370 million.
Finance Minister Mthuli Ncube is expected to provide further insights into the future trajectory of the ZiG when he presents his mid-year budget review on July 25.
Source: Thezimbabwemail
