CAPTAINS of industries have urged the government to have a clear mono-currency transaction strategy that will not disrupt business and investment projects.
This comes as the government is pushing to phase out the use of a basket of currencies by 2030, opting for the local currency, which it envisions would have gained significant value by then.
However, official statistics show that at least 80% of the official market is now dollarised, and with the informal sector making up close to 70% of the economy, if it is factored in, the level of dollarisation nationally is even higher.
A recent International Monetary Fund staff team led by its mission chief to Zimbabwe, Wojciech Maliszewski, that concluded a trip to Harare from June 4 to June 18 for the 2025 Article IV Consultations, warned about the mono-currency target.
The fund noted that the government still needed to strengthen the monetary and forex market framework in line with its recommendations.
During the official launch of the Zimbabwe National Chamber of Commerce (ZNCC) 2025 Annual Congress today, ZNCC president Tapiwa Karoro said the mono-currency transition should be done if clear strategies were in place.
The congress began on Wednesday and ends on Saturday.
“We need to deal with the resolution of Zimbabwe’s currency regime, which is a paramount issue. As the ZNCC, we believe that a mono-currency system should be the long-term goal, but this must be market-driven, guided by confidence and not compulsion,” Karoro said.
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“Abrupt administrative impositions will definitely erode trust. What we need is a strict, transparent transition underpinned by strong economic fundamentals.”
He added that there was a need to address challenges that were choking the business, such as regulatory issues and power shortages.
“Crucially, we must also address one of the most persistent obstacles to real business in Zimbabwe, and this is the overly complex, fragmented, and costly regulatory compliance environment,” Karoro said.
“Business faces layers of licences, permits, levies, and import requirements from various regulatory bodies, many of which duplicate functions and contradict each other. This regulatory maze significantly raises the cost of doing business.
“It deters investment and serves as a major disincentive for the formalisation of enterprises, particularly the small-to-medium-sized enterprises. Streamlining these regulations, eliminating redundancies, and moving toward a one-stop, digitised, and low-cost compliance regime must be a core priority under Zimbabwe's regime.”
Such challenges have led to several firms either entering corporate rescue since last year or shutting down completely.
Meanwhile, the country is working toward the National Development Strategy 2 (NDS2) Document to make the country an upper-middle-income country by 2030.
“As we now pivot towards NDS2, with just five years to meet this ambitious target (mono currency), it is imperative that we unlock the full potential of our economy through pillars of sound policy, strategic partnerships, and enhanced productivity,” Karoro said.
“With regard to policy, and that is creating an enabling environment, unlocking business potential begins with clear, consistent, and credible policy. NDS2 must be built on a frank and evidence-based review of our performance under NDS1. Some of the critical issues.”
However, the industry captain also warned that the continued use of the greenback could have a huge impact on the country, which had forced it to become a retail place and dumping site for other countries.
RBZ deputy governor Innocent Matshe said the Reserve Bank of Zimbabwe (RBZ) was working tirelessly to ensure currency stability.
This is because the domestic tender, Zimbabwe Gold (ZiG), is the fifth such iteration the country has ever had after the Zimbabwe dollar, Bond notes and coins, RTGS dollar, and Rhodesian dollar.
The high volatility of the local currency that has led to new ones over the decades is owing to the post-independence government of ZANU PF failing to instill confidence or adequate support of the domestic tender.
For example, ZiG, introduced on April 5, 2024, was later devalued in September as the controlled RBZ exchange rate could no longer maintain its fictitious values.
Despite this, the RBZ continues to use its controlled exchange rates for the market.
Last week, the RBZ revealed that the domestic currency reserve money of ZiG4,7 billion and the entire local currency deposits of ZiG15,5 billion was backed by foreign currency reserves of US$701 million, equivalent to ZiG18,9 billion, as of June 13.
However, the bank estimates US$2,5 billion is currently circulating in the informal market unbanked.
One of the failures to generate foreign currency is the inability to increase the contribution of manufacturing sector to the economy from its current level of 9%, according to data from the Confederation of Zimbabwe Industries, to its peak of 23%.
Increasing this contribution would generate more foreign currency, as it would allow producers to generate more exports.
“Zimbabwe’s journey towards manufacturing in the dynamic and global landscape involves careful alignment with policymakers, innovative strategies to counteract local and economic challenges, and integration into regional and global trade frameworks,” United Nations Resident and Humanitarian Coordinator to Zimbabwe Edward Kallon said.
“Renewable energy, that’s the engine of manufacturing, and we all know fossil fuels are not the alternative to renewable energy, but clean energy is the way to go.”
He said it was important to leverage digitalisation, efficiency, and education as pillars for growth and enforcement.
“And then, we talk about jobs as also being a solution, not to forget about the weaker part of society, social protection, and then climate change, biodiversity, and pollution,” Kallon said.
“These are investment pathways, and we have done detailed analysis to point out that if investments are centred around these six conditions, the possibility exists for governments to actually start realising the important aspects of the area and how to work well at the edge.”
