Source: ‘ZiG-only payments key step toward currency transition’ – herald
Debra Matabvu-Herald Reporter
GOVERNMENT’S decision to pay contractors and service providers exclusively in the Zimbabwe Gold marks a massive step towards de-dollarisation and responds directly to growing public calls for authorities to lead by example in promoting the use of the local unit, Reserve Bank of Zimbabwe Governor Dr John Mushayavanhu has said.
In an interview, Dr Mushayavanhu said the policy shift, announced by Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube recently, demonstrated Government’s commitment to entrenching the use of ZiG across the economy and boosting confidence in the domestic currency.
He said the move would have no impact on inflation or exchange rate stability, as the Central Bank has adequate foreign currency reserves to support all legitimate external payment requirements.
“This pronouncement will have no impact whatsoever on inflation and exchange rate developments in the economy,” said Dr Mushayavanhu.
“The Reserve Bank stands ready to provide foreign currency to buttress the smooth functioning of the interbank foreign exchange market thereby alleviating any fears of exchange rate depreciation or a surge in inflation levels.”
Zimbabweans have repeatedly called on Government to take a leading role in adopting and using the local currency, arguing that this would help restore confidence and reduce the economy’s heavy reliance on the United States dollar.
In this regard, Dr Mushayavanhu said the new policy directly addresses those concerns and is expected to increase demand for ZiG, which is a key condition for transitioning towards a mono-currency system.
“The decision taken by Government to settle payments for public service goods and services exclusively in ZiG, demonstrates its commitment to the use of local currency in the economy,” he said.
“This measure addresses the general public’s repeated call for Government to take a lead in the use of ZiG in the economy for boosting confidence. The implementation of this policy measure will, therefore, go a long way in promoting the demand and increased use of the local currency in the economy, a critical condition precedent for transitioning to the exclusive use of local currency as highlighted in the National Development Strategy 2 (NDS2) and the February 2026 Monetary Policy Statement by the Reserve Bank of Zimbabwe.”
He added that the effectiveness of the policy would be underpinned by the prevailing stability in prices and the exchange rate, which is expected to sustain confidence in the currency.
Responding to concerns that contractors and suppliers might offload their ZiG payments on the parallel market in search of US dollars, the Central Bank chief said such behaviour is not anticipated given the availability of foreign currency through formal channels.
Service providers, he said, would be able to access foreign currency through the Willing Buyer Willing Seller interbank market for bona fide import requirements, including raw materials and equipment.
“The country has enough foreign currency to cover all bona fide foreign currency demand for settling external transactions,” he said, adding that strong export performance and diaspora inflows have bolstered foreign currency receipts.
Zimbabwe recorded foreign currency receipts of over US$16 billion in 2025, supported by a current account surplus of about US$2 billion, developments that the Reserve Bank said have strengthened exchange rate stability and reduced exchange rate risks.
Dr Mushayavanhu said these fundamentals eliminated the need for contractors to resort to the parallel market, while the central bank and the Financial Intelligence Unit will remain vigilant to curb any potential malpractices.
“The Reserve Bank does not expect contractors and suppliers to violate exchange control regulations as the country has adequate foreign currency to meet demand,” he said.
The policy was also expected to complement broader de-dollarisation efforts by increasing the circulation and acceptance of ZiG in domestic transactions.
Under the Reserve Bank’s foreign exchange accumulation strategy, the country has also been building reserves through a policy requiring mining companies to pay part of their taxes in kind.
As at December 2025, the Central Bank had accumulated about US$1,2 billion in reserves, equivalent to 1,5 months of import cover.
Dr Mushayavanhu said foreign currency inflows were expected to exceed last year’s US$16 billion, driven by firm global commodity prices, improved agricultural output following a favourable rainfall season and continued diaspora remittances and investments.
He said these inflows would further strengthen the country’s external position and support the stability of the ZiG as authorities press ahead with monetary reforms aimed at restoring full confidence in the local currency.
COMMENTS