Source: ‘New ZiG notes can improve cash transactions in southern regions’ – herald
Nqobile Bhebhe, Zimpapers Business Hub
AS the Reserve Bank of Zimbabwe (RBZ) prepares to inject new and upgraded Zimbabwe Gold (ZiG) notes into circulation from 7 April, the spotlight has fallen on the southern region, where domestic cash currency circulation remains limited.
The central bank’s upgraded and new banknote series comprises ZiG10, ZiG20 and ZiG50 denominations, which will come into circulation in April and the ZiG100 and ZiG200 denominations, which the bank will introduce in due course.
The planned rollout of the new banknote series is widely seen as a critical step to bridge cash liquidity gaps in Bulawayo, Matabeleland South and parts of Masvingo, where the South African rand, Botswana pula and the United States dollar dominate transactions.
While ZiG electronic transactions have steadily grown in formal retail spaces, analysts say limited circulation of ZiG banknotes has slowed broader adoption in informal markets, where cash remains the dominant mode of payment.
Consumer groups say bridging this gap is essential if the domestic currency is to gain deeper traction across the economy.
The Consumer Council of Zimbabwe (CCZ) has urged the central bank to complement the rollout of new notes with targeted awareness campaigns and improved distribution systems.
In a response to this publication, CCZ chief executive officer Mrs Rosemary Mpofu said widespread circulation of ZiG notes and public understanding were essential for any currency reform to succeed.
“The introduction of ZiG represents an important step toward restoring stability and confidence in Zimbabwe’s monetary system.
“However, for any currency reform to succeed, the currency must be widely available, trusted by consumers and accepted across all sectors of the economy,” said Mrs Mpofu.
“Limited circulation of ZiG (notes) in certain regions risks undermining these objectives and may perpetuate the reliance on alternative currencies.
“From a consumer perspective, it is therefore critical that the Reserve Bank of Zimbabwe (RBZ) adopts targeted measures to ensure equitable distribution, improve public awareness and encourage broader acceptance of the currency.”
The southern region presents unique structural dynamics that influence currency behaviour.
Its proximity to South Africa has historically entrenched the rand as a dominant medium of exchange, driven by cross-border trade, labour migration and tourism activities.
For decades, businesses in border communities such as Beitbridge, Plumtree and Victoria Falls have operated within a hybrid-currency environment where the rand plays a central role in everyday transactions.
Within the current multi-currency framework, this pattern has remained largely intact.
Presenting the 2026 Monetary Policy Statement in Bulawayo last week, RBZ Governor Dr John Mushayavanhu acknowledged this reality and outlined the central bank’s strategy to deepen ZiG usage in the region.
“The first question was on the rand being dominant in this region, which we understand because we are in a multi-currency regime and the proximity to South Africa would mean that there is more rand circulating in this region than elsewhere,” said Dr Mushayavanhu.
“This is why we are now here promoting the use of ZiG. We have seen that in electronic transactions, there is a plus or minus 40 percent.
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“It’s happening in supermarkets in Bulawayo, where the transactions are almost 40 percent local currency and 60 percent other currencies. In fact, in some bigger supermarkets, we have actually seen the ratio getting closer to 50 percent.”
This data suggests that within the formal retail sector, particularly supermarket chains, the ZiG is gradually gaining ground in digital form.
However, the challenge remains its limited cash availability.
In informal markets, public transport systems and small retail outlets, sectors that dominate economic activity in the southern region, transactions are still overwhelmingly cash-based.
Without an adequate supply of notes and coins, businesses say it becomes difficult to price goods or provide change in ZiG.
The monetary authorities say the new notes expected in April are designed to address this structural constraint by improving liquidity and increasing the availability of smaller denominations used in everyday transactions.
Dr Mushayavanhu said stability in the currency over the past year and a half has already created a foundation for broader acceptance.
“So, we have a ZiG that has been stable for the past one and a half years and that stability should also encourage people to now see that there is value. ZiG can also be used as a store of value rather than just as a transacting currency. It’s a journey that we are travelling. We are aware of the situation in the southern region and we are addressing it.”
Mrs Mpofu noted that currency circulation is strongly influenced by acceptance levels within key sectors.
“If retailers, transport operators, and informal sector traders are reluctant to accept ZiG, circulation will remain limited regardless of the amount issued by the central bank. RBZ can promote acceptance by working with business associations, retailers, and industry bodies to encourage pricing and transactions in ZiG.
“Incentive structures may also be considered to support businesses that actively promote the use of the currency in everyday transactions.”
She said sectors with high consumer interaction, including supermarkets, fuel stations, public transport operators and informal markets, should be prioritised in awareness programmes.
Transport operators, who handle thousands of daily cash transactions, say they are open to accepting ZiG, provided physical availability improves.
Mr Nkosilathi Moyo, a Bulawayo-based transport operator, said operators generally accept whatever currency passengers carry.
“As transport operators, we do not choose currencies; we accept what commuters have,” he said.
“If ZiG is available and passengers are carrying it, we will accept commuters paying in ZiG as long as it is available. The main challenge has been access to physical cash and getting change.”
Another major factor affecting circulation is the efficiency of cash distribution systems.
Mrs Mpofu said uneven circulation may stem from logistical challenges within banking networks.
“RBZ should therefore strengthen co-ordination with commercial banks and cash-handling institutions to ensure that adequate quantities of ZiG banknotes are delivered to all provinces, particularly areas where circulation appears limited.
“Commercial banks, mobile money operators, and financial service providers play a crucial role in the physical movement of currency and must be actively involved in ensuring that ZiG is readily available at banks, ATMs and retail outlets.”
She added that improving demand forecasting systems would help the central bank anticipate regional cash needs more effectively.
Another structural challenge is the limited financial infrastructure in some areas.
“In regions where bank branches or ATMs are scarce, consumers may struggle to obtain local currency even if it is available within the financial system,” said Mrs Mpofu.
“RBZ can address this challenge by expanding alternative cash access channels. These may include point-of-sale agents, retail cash-back systems and partnerships with local businesses that can provide cash withdrawal services.”
Economic analysts say physical visibility of a currency plays a critical role in shaping public confidence.
Bulawayo-based economic analyst Ms Alice Chikonzi said the introduction of new notes could significantly strengthen the currency’s presence in everyday commerce.
“Currency stability over the past year and a half provides a foundation. However, people must interact with the currency daily to build deeper trust. Increasing physical circulation in the southern region will reduce over-dependence on foreign currencies for domestic transactions,” she said.
“The southern region has structural exposure to the rand because of geography and trade patterns. The RBZ should not only avail more ZiG but also intensify awareness campaigns explaining why using the local currency supports domestic production and strengthens monetary sovereignty.”
From a policy perspective, wider usage of ZiG in domestic transactions enhances the effectiveness of monetary policy.
When foreign currencies dominate internal trade, the central bank’s ability to manage liquidity and influence credit conditions becomes constrained.
Furthermore, heavy reliance on the rand exposes local markets to exchange rate movements driven by South African economic conditions, which may not always align with Zimbabwe’s domestic fundamentals.
For policymakers, therefore, the southern region represents a crucial testing ground for the long-term consolidation of the ZiG.
Meanwhile, the central bank on Wednesday launched the Big ZiG Campaign in Matabeleland South Province.
Three teams have since been deployed across the province’s districts to educate communities as part of the awareness campaign, which will run until 30 March.
As the 7 April rollout approaches, the success of the new notes may ultimately depend not only on supply, but on sustained awareness campaigns, business acceptance and improved financial infrastructure that enables the currency to circulate freely across all regions of the economy, they noted.
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