‘Bye-bye US dollar’? Zimbabwe’s ZiG push advances
Zimbabwe’s plan to make the Zimbabwe Gold (ZiG) its sole currency has recorded fresh progress, but the Reserve Bank of Zimbabwe (RBZ) has made clear that the latest figures do not mean the US dollar is about to disappear from everyday transactions.
The RBZ’s conditions-precedent score rose to 54.9 percent in September from 50.1 percent in August. The bank says six of eight conditions identified for a sustainable move from the current multi-currency system have been achieved. But Governor Dr John Mushayavanhu said the score is a measure of progress, not a countdown to a change of currency regime.
“The overall weighted score of 54.9 percent was determined by a weighted average of progress on each of the CPs, with the weights reflecting the overall importance of each CP supporting the transition to mono-currency,” he said.
“Importantly, the barometer seeks to provide an objective and indicative measure of the status of achievement of the CPs and does not signal an immediate transition to mono-currency, which remains a market-driven process.”
Dr Mushayavanhu said the transition would be “conditions-based and not date-dependent”. The authorities have therefore set no fixed day for the US dollar to cease being used alongside ZiG. The pace, he said, will depend on economic conditions and the public’s willingness to use the local currency.
The score improved mainly on the back of a larger foreign-currency reserve position and subdued inflation. Reserves stood at US$1.9 billion at the end of September. During the third quarter, the ZiG traded within a range of about ZiG25 to ZiG27 against the US dollar, while the premium on the parallel market narrowed to below 15 percent.
Annual ZiG inflation rose to 3.7 percent in September from 2.9 percent in August. The increase interrupts a period of easing, though the rate remains in single digits. Recent price data also showed monthly inflation picking up to 0.5 percent from 0.1 percent, with housing, water, electricity, gas and other fuels among the categories driving the rise. For households, a stable exchange rate does not remove the pressure of higher bills for essential services.
The International Monetary Fund (IMF), after a mission to Harare in September, said Zimbabwe’s economy was projected to grow by 5 percent in 2026, following growth of 8.3 percent in 2025. It said annual inflation had fallen to 2.9 percent in August, supported by tight monetary conditions and relative exchange-rate stability. The IMF also said the RBZ should maintain its tight monetary stance until inflation expectations are firmly anchored and confidence in ZiG strengthens.
That confidence remains central to the currency plan. The Government is seeking to make ZiG more available and more commonly accepted, particularly in border towns in the south and in Matabeleland. The RBZ says some communities have yet to fully embrace the recently introduced ZiG denominations because access to notes and coins has been limited.
Deputy Governor Dr Innocent Matshe said the central bank had distributed local currency through banks nationwide, while acknowledging that availability needed to be checked where problems were reported.
“I can assure you, in the areas that you have talked about, the Reserve Bank has been there, and I can also assure you that in those same areas, there is no bank or subsidiary or sub-bank that did not receive local currency and that cannot access local currency. If there is, then we need to look at it, and it is important that ZiG be available across the whole country,” said Dr Matshe.
Beitbridge and Plumtree face a particular challenge because residents and traders have long used different currencies across the border. That established habit is one reason the RBZ expects adoption to take longer there than in some inland areas.
“Because these communities had always used currencies interchangeably across the border. But because the Zimbabwean currency had depreciated and had been unstable for a long time, it was always going to take much longer than elsewhere,” he said.
Matshe contrasted the border towns with Gokwe, where cotton farmers receive part of their export-retention earnings in ZiG, helping the currency circulate locally. The comparison points to one of the practical routes for wider use: people are more likely to spend a currency they receive regularly and can use to meet local costs.
The deputy governor urged people to use ZiG for payments such as utilities, groceries and school fees rather than exchanging it into US dollars and converting it back again. He said the additional conversions create costs and can erode the value of the money.
“Why would you want to exchange your local currency into USD only to exchange it back when you pay for your utilities? Or when you pay for your groceries that you can pay in local currency? You earn in local currency. You spend it in local currency. Otherwise, if you don’t do that, you lose value,” he said.
He also said schools and other economic agents should accept ZiG payments under the current multi-currency system. Fuel, previously a sticking point, is beginning to move in the same direction, with some companies already selling fuel in ZiG, according to Matshe.
“I can assure you, no school in this country is supposed to reject ZiG payment, none. Yes, we are in a multi-currency environment, and no economic agent is allowed to do that,” he said.
The Government is also trying to address a longstanding trust deficit around currency and financial products. Deputy Minister of Finance, Economic Development and Investment Promotion David Mnangagwa told the Zimbabwe Economic Development Conference in Bulawayo that inconsistent messages from policymakers could leave doubts unresolved.
“What this means is that the trust gap and deficit, if not dealt with, is something that can linger on for generations,” he said. He said the Government was seeking clarity by placing currency-management policies within the law.
Matshe said the ZiG was still a young currency, while the US dollar was long established. Stability in financial markets, exchange rates and prices would need time to translate into habitual use, he said. The central bank has also introduced two facilities intended to support local-currency use, including arrangements with miners. The RBZ said miners’ ZiG expenses exceeded the 30 percent retention threshold, indicating demand for local currency to meet domestic costs.
The IMF reported that reserve-money growth remained within the targets agreed under Zimbabwe’s 10-month Staff-Monitored Programme. In its September assessment, it also said programme implementation through June had met all quantitative and indicative targets except the target for protected social and priority spending. The IMF’s statement underscored the government’s parallel task of maintaining monetary discipline while ensuring budgeted support reaches priority programmes and vulnerable households.
For now, the policy remains a gradual transition rather than an imminent currency switch. The ZiG’s improving score, stronger reserves and narrower exchange-rate gap mark progress, while the uptick in inflation, uneven access to cash and lingering mistrust remain part of the picture. The RBZ says the market—not a calendar date—will determine when the conditions are strong enough for the country to rely on ZiG alone.
Matshe said the change could not be forced overnight. “An economy does not change overnight. If it changes overnight, you will have problems, deep problems. What we are seeing now is a transition, a transition that will make this economy compact.