Zimbabwe’s plan to move towards using the Zimbabwe Gold (ZiG) as its sole currency is advancing on paper, but economists say the local unit remains difficult to find in parts of the country and is rarely used for ordinary purchases outside some urban areas.
The Reserve Bank of Zimbabwe (RBZ), however, says ZiG’s share of payments has risen above 40% and that the transition will not be imposed on a fixed date. It has also reassured holders of United States dollar bank accounts that their balances will not be forcibly converted when the country moves away from its current multi-currency system.
For account holders, the distinction is important. The Government says existing foreign-currency balances will remain in place and obligations will be honoured in the currency in which they were agreed. But local transactions will have to be made in local currency once a mono-currency arrangement is in force. That means a person wishing to spend dollars inside Zimbabwe would need to convert the amount required for that local payment, while offshore transactions could continue in foreign currency.
The policy debate is unfolding against sharply different accounts of how much ZiG is actually circulating. Economic analyst and university lecturer Dr Eddie Mahembe says the local currency is scarcely seen in many communities, with United States dollars dominating transactions. Reserve Bank Governor Dr John Mushayavanhu disputes the claim that the central bank is deliberately withholding ZiG and points to payment-system data showing increased use.
Mahembe said the balance of transactions varies greatly by location, with ZiG use declining outside Harare and other centres. “United States dollar transactions in the market are upward of 85%. Transaction levels however, vary from one part of the country to another. There is a bit of Zig transactions in Harare but usage of the local currency becomes less and less as you move outwards. In places like Mat South and Masvingo, you rarely come across Zig. In Beitbridge it is the Rand while in Masvingo it is the US$. I was in Zaka for two months and I never came across the Zig,” he said.
In a separate estimate, former Finance Minister Tendai Biti said 80% of transactions take place in US dollars. “The money used is US$, with 80% of transactions done in that currency. The absence of ZiG in the market does not make any difference. What only matters is why ZiG is in short supply.
“They are maintaining an artificial short supply with an artificial exchange rate of 1:27. If it were allowed to be at liberty, it would to shoot to 1:100. They are shielding the ZiG to maintain an artificial exchange rate,” Biti said.
Mushayavanhu’s figures cover a different measure. The RBZ says ZiG transactions processed through the national payment system have remained above 40% in the third quarter of 2026, after rising from 26% in April. The governor has said the figures are drawn from verifiable transaction data processed through the Real Time Gross Settlement System. They do not describe every cash purchase or every region, while the economists’ estimates are broader claims about how people are paying in the marketplace.
The central bank’s latest third-quarter snapshot puts ZiG inflation at 3.7% in September, after it fell to 2.9% in August. Monthly inflation averaged 0.4% during the first nine months of 2026. The RBZ says annual inflation has remained in single digits since January and describes the August figure as the lowest local-currency inflation reading since 1980.
The same snapshot says the ZiG traded between 25 and 27 to the US dollar during the third quarter, with the parallel-market premium narrowing to below 15%. Foreign-currency reserves reached about US$2 billion in September, equivalent to roughly 2 months of import cover. The figures have strengthened the RBZ’s case that stability is improving, though the reserve-cover level remains below the 3 to 6 months of import cover identified as a condition for a sustainable transition to one currency.
The RBZ’s weighted score for meeting conditions needed before the transition rose from 50.1% in August to 54.9% in September. The framework contains 8 conditions, and 6 have been recorded as achieved. The score is a measure of progress, not an announcement that the US dollar will soon cease to be used. The bank says the changeover will be conditions-based and market-driven, not tied to a date.
Mushayavanhu rejected the suggestion that the bank is protecting ZiG by keeping it out of circulation. He said monetary policy is intended to maintain price stability and that increased use of the local currency reflects greater stability in prices, the exchange rate and the currency itself.
“The local currency has held its ground against the US$, even with record foreign currency inflows surging to US$15,9b in the 9 months to September 2026, driving the expansion in foreign currency deposits. As such, the proportion of Zig in total deposits and credit remained at around 20%,” he said.
The RBZ snapshot records foreign-currency inflows of US$15.9 billion between January and September, compared with US$11.9 billion in the same period in 2025. It estimates total foreign-currency payments at US$11.6 billion, leaving a surplus of US$4.3 billion. The bank says export earnings, particularly from tobacco, lithium, gold and platinum-group metals, and diaspora remittances contributed to the inflows.
Mahembe argues that the scarcity of ZiG is itself what has helped keep inflation down. He said the central bank’s stability claim was “manufactured” because, in his view, restricting the local currency’s availability limits the amount of money circulating and therefore prevents it from being spent in ways that could push up prices.
“Inflation is when too much money is chasing too few goods and what RBZ has done is simply to withdraw the Zig from the market so that there is little of the local currency.
“The real indication that RBZ has withdrawn the Zig to shield it from inflation is that Government is not paying its debts. Many companies face collapse because Government is not paying its service providers. A lot of those companies are approaching lawyers to try and get paid.
“The tragedy is that only the connected are being paid. Government knows that if it pays, it injects money into the market and there will be too much money hence this withdrawal of the Zig,” he said.
He also pointed to the way local authorities and Government departments prepare budgets in both US dollars and ZiG. “There is no country including Zambia and Malawi where this is done. The budgets must be quoted in the local currency. The real issue is that these budgets are formulated in US$ and then for the purpose of presentation the figures are translated into Zig,” Mahembe said.
He described the currency arrangement as an “arbitrage” system, arguing that the Government uses ZiG to buy foreign currency from exporters required to surrender a portion of their foreign-currency earnings and from the parallel market. He said arbitrage could “border on criminality”. The RBZ rejects the claim that it is withholding the currency to protect an artificial exchange rate.
The question of availability has also resurfaced after the RBZ introduced upgraded ZiG banknotes on April 7, 2026. The first notes in the new series were ZiG10, ZiG20 and ZiG50, with higher denominations intended to be introduced gradually according to demand and monetary conditions. The bank said the notes had been distributed through banks and other ordinary channels, and encouraged retailers to offer ZiG cash-back services. Its stated weekly withdrawal limits were ZiG10,000 for individuals and ZiG100,000 for companies.
The roll-out was presented as a practical step to make the currency easier to use. Yet the complaints from economists and businesses point to a wider question than the design or supply of notes: whether people can routinely obtain ZiG, spend it and retain its value. In a recent account of the currency’s reception, Harare teacher Charles Mbwandarikwa said he receives about one-third of his salary in ZiG and exchanges it quickly. He described losing pension savings during the 2009 currency crisis and said the value of his salary fell from the equivalent of US$540 to US$40 by the end of 2018. Clothing retailer Sesedzai Chigumira said she had made only a handful of sales in ZiG.
Economist Cornelius Dube said demand remained subdued. “ZiG has to be available in a ratio relative to its demand. Demand for ZiG is currently very subdued,” he said. The experiences of earners and retailers illustrate the difference between a currency appearing in payment-system totals and becoming a preferred means of payment or saving for households and businesses.
Against that backdrop, Mushayavanhu says a return to a single currency remains part of the Government’s National Development Strategy 2, but only after conditions are met. “Since 2024, the Reserve Bank has consistently implemented a prudent monetary policy stance to consolidate and entrench macroeconomic stability. As a result, inflation declined to single-digit levels in January 2026 and average 4% through to September,” he said.
Mahembe agrees that Zimbabwe ultimately needs its own currency, but says the move should involve public consensus, a clear road map and sound economic fundamentals. “You can’t be unilateral when you switch to mono-currency. People will use their feet and the moment they lose confidence in the currency, they won’t use it,” he said.
Mushayavanhu has described the process as gradual and market-led. The RBZ says it will look for durable low inflation, stronger foreign-currency reserves, exchange-rate stability, wider adoption of ZiG, a sound financial sector, policy coordination, a secure payments system and a functional foreign-exchange market before any final change. The latest reserve figure of about 2 months’ import cover is below the stated medium- to long-term goal of 3 to 6 months.
The assurances over foreign-currency accounts were repeated in September at the signing of a US$30 million financing partnership between CABS and British International Investment. The facility comprises a US$20 million term loan already signed and a planned US$10 million trade-finance facility. It is intended to support agriculture and food-manufacturing exporters, as well as small and medium-sized businesses seeking long-term lending, equipment and trade finance.
At the event, Permanent Secretary in the Ministry of Finance George Guvamatanga told banks not to panic over the proposed transition. He said existing balances would not be converted and that financial obligations would be settled in the currency in which the original agreements were signed. “That position is the position of Government,” he said.
Guvamatanga said foreign-currency accounts would remain, and offshore transactions could continue in foreign currency. The change, he said, would apply to local transactions: “If you then decide to transact locally, then you have to convert into the local currency. But everything else will remain the same.”
For customers, therefore, the official position is not that USD deposits will be swept into ZiG when the transition happens. The assurance is that balances and existing contractual obligations will remain denominated in their original currency, while the means of paying for domestic purchases would change under a future mono-currency system. That shift is not yet scheduled for a particular day. The RBZ says it will depend on meeting the economic conditions and on a market-led process.
Both Mushayavanhu and Mahembe say Zimbabwe needs a national currency. Their disagreement is over whether the current stability reflects greater confidence in ZiG or the limited amount of it circulating. With US dollars still widely used, ZiG scarce in some areas and the reserve-cover target not yet reached, the central bank’s figures and the everyday experience of currency users remain central to the debate over how and when the country can move to a single currency.