Zimbabwe’s retail industry is usually classified according to what companies sell. Edgars and Truworths sell clothes; supermarkets sell groceries; furniture chains sell household goods. But that description misses an important part of the economics.
By Brighton Musonza with work by Tinashe Mukogo
At their peak, Edgars and Truworths were not simply clothing retailers. They were also substantial consumer-finance businesses. Their stores supplied the merchandise, but their credit books helped finance the purchases.
That distinction offers a useful way of understanding Zimbabwe’s wider economic problem. The country does not merely need shops selling more goods. It needs a financial system capable of converting household income, savings and future earnings into present consumption and investment.
And that requires a credible domestic currency.
When a Clothing Retailer Becomes a Bank
The economics of Edgars and Truworths were unusually dependent on credit.
In 2013, according to business analyst Tinashe Mukogo of Moneymoves.com, Edgars generated about US$68 million in revenue, with roughly 72% of sales made on credit. Truworths generated about US$25 million, with approximately 75% of its sales on credit. The contrast with South Africa’s Mr Price was striking: only about 12.7% of its sales were credit-based.
The question, therefore, was not simply whether Edgars and Truworths were selling clothes on credit. It was whether they were effectively selling credit through clothes.
The scale of the lending function reinforced the point. The combined receivables of Edgars and Truworths were estimated at about US$30.7 million, exceeding the personal-lending balance of Barclays Zimbabwe at the time.
The shops were therefore performing a function that Zimbabwe’s formal banking system was not providing at sufficient scale: financing household consumption.
A customer did not necessarily need US$100 in cash to buy a US$100 item. The retailer could transform the customer’s future salary into purchasing power today.
That is banking economics, even when the institution is called a clothing store.
The Retailer Was Solving a Financial Problem
The deeper lesson is that businesses should be understood according to the economic problem they solve, rather than merely the products displayed on their shelves.
Meta may look like a social-media company, but its economic engine is advertising. A supermarket may appear to be a food business, but its competitive advantage can lie in logistics, working capital, purchasing power and inventory management.
Similarly, Edgars and Truworths demonstrated that Zimbabwean clothing retail was partly a consumer-finance business.
This model worked because retailers could extend credit against predictable future income.
But credit is fundamentally a bet on the future value of money.
A retailer lending US$500 over 12 months needs confidence that the repayments it receives will retain meaningful purchasing power. If inflation destroys the value of those repayments, the retailer is effectively lending at a loss.
That makes monetary stability a retail issue.
Dollarisation Saved Retail — But It Also Created a Structural Constraint
Zimbabwe’s adoption of the US dollar after the 2008 hyperinflation crisis restored an essential ingredient for commerce: monetary predictability.
For retailers, dollarisation made pricing, accounting, importing and credit much easier. It also restored consumer confidence and helped revive formal commerce.
But dollarisation created another problem. Zimbabwe uses a currency that it does not issue.
The Reserve Bank of Zimbabwe cannot create US dollars. Zimbabwean commercial banks cannot manufacture US-dollar liquidity in response to domestic demand. The country’s supply of dollars ultimately depends on exports, remittances, investment, borrowing and other external inflows.
That means Zimbabwe’s domestic credit system is constrained by the availability of a foreign currency.
This is fundamentally different from operating with a credible national currency.
Why Currency Matters to Retail Credit
A functioning currency does much more than facilitate transactions.
It provides the unit in which wages are paid, prices are established, debts are recorded, savings accumulated and contracts written.
Most importantly, it allows economic activity to be transferred across time. A bank mortgage converts future wages into a house today.
A business loan converts future profits into investment today. A retailer’s instalment plan converts future household income into consumption today. All three depend on confidence in the currency.
If that confidence disappears, credit contracts become shorter, more expensive or disappear altogether.
This is precisely why Zimbabwe’s monetary problem is also a problem for retailers.
Edgars Shows What Is Happening in Real Time
The experience of Edgars provides a particularly useful case study.
In its recent reporting, the company has continued to operate a significant credit business alongside its retail operations. Its US-dollar retail debtors’ book reached about US$12.6 million, while its Zimbabwe-dollar credit book was sharply reduced as currency instability and high local-currency interest rates made lending more difficult.
The company subsequently began rebuilding its domestic-currency lending as monetary conditions improved. That is an important signal.
The demand for consumer credit did not disappear. What changed was the currency in which retailers were willing to provide it.
This distinction is crucial.
Zimbabweans still want to buy clothes, furniture, appliances, groceries and other goods. What is missing is a sufficiently deep and affordable mechanism for financing those purchases.
Edgars’ experience demonstrates that retail and finance remain closely connected.
Zimbabwe Has a Two-Tier Retail Economy
The currency problem becomes even more important when viewed alongside Zimbabwe’s informal economy.
Formal retailers carry costs that informal traders often avoid: commercial rents, payroll taxes, regulatory compliance, accounting systems, inventory controls, bank charges and formal financing costs.
Informal businesses, meanwhile, can operate with considerably lower overheads and respond quickly to changing prices and currency availability.
This has contributed to the hollowing-out of parts of formal retail.
The collapse or restructuring of established retailers such as Truworths, alongside continuing pressure on major supermarket operators, illustrates that Zimbabwe’s retail difficulties cannot simply be explained by poor management or changing consumer tastes. The wider operating environment matters.
Recent industry developments have underscored the severity of the problem, with Truworths entering corporate rescue and several major retailers struggling with liquidity, competition and changing consumer behaviour.
The Missing Ingredient Is Domestic Financial Intermediation
Zimbabwe needs an economy in which domestic income can generate domestic credit. Consider a worker earning a salary in Zimbabwe.
If the financial system is functioning properly, that salary can support a bank account, savings, a loan, a mortgage or a retailer’s instalment plan.
The bank can lend against future income. The retailer can sell against future income. The manufacturer can invest against future demand.
The entire system becomes a mechanism for transforming future economic production into present economic activity.
But when the dominant currency is foreign, the financial system must continually obtain that foreign currency before it can expand foreign-currency credit.
This creates a ceiling on domestic financial intermediation.
Zimbabwe can have millions of economically active people and still experience a shortage of credit because the monetary system is not sufficiently connected to domestic income.
The Case for ZiG Is Therefore an Economic Argument, Not a Nationalist One
Zimbabwe’s case for a domestic currency should not be reduced to monetary nationalism. The question is not whether Zimbabwe should have a currency simply because other countries have one.
The question is whether Zimbabwe wants the ability to build a financial system capable of lending against Zimbabwean incomes, assets and future production.
The ZiG was introduced in April 2024 as a structured currency anchored by foreign-exchange and precious-metal reserves. The Reserve Bank describes the system as being backed by a composite basket of foreign currency and precious metals.
But having a domestic currency is not enough. Zimbabwe needs a credible domestic currency.
That means monetary discipline, transparent reserves, credible fiscal policy, predictable exchange-rate arrangements and a central bank whose credibility cannot easily be undermined by government financing requirements.
Without those foundations, the argument for local currency collapses.
Zimbabwe Must Not Repeat the Mistakes of the Past
The greatest obstacle to the ZiG is not the existence of the US dollar. It is Zimbabweans’ memory of what happened to their savings and incomes under previous local-currency regimes.
Trust cannot be legislated into existence. It cannot be created by banning the US dollar. And it cannot be manufactured through political speeches.
Zimbabweans will use ZiG voluntarily when they believe it will preserve purchasing power, facilitate transactions and provide access to reasonably priced credit.
The history of Zimbabwe’s currencies means that this credibility has to be earned.
The country’s previous currency crises demonstrate why monetary discipline is not an academic concern. Currency instability destroys savings, distorts prices and makes long-term contracts extremely difficult.
Recommendations: Build the Currency Around the Economy
The first priority should be monetary credibility. The Reserve Bank must maintain strict control over reserve money and provide transparent, independently verifiable information on the reserves underpinning the monetary framework. The currency must become predictable enough for businesses to make multi-year decisions.
The second priority should be fiscal discipline. No domestic currency can remain credible if monetary policy is repeatedly required to accommodate unsustainable government deficits. Fiscal policy and monetary policy must reinforce rather than undermine each other.
Third, Zimbabwe should deliberately develop a domestic-currency credit market. Banks should be encouraged to expand appropriately priced ZiG lending for mortgages, productive investment, working capital and consumer finance. The objective should not be forced lending but the creation of conditions under which banks can safely lend in local currency.
Fourth, the country should develop a modern credit-information infrastructure. Retailers such as Edgars historically accumulated valuable information about consumers through their credit books. That information should feed into a broader formal credit ecosystem, allowing responsible borrowers to build credit histories that can subsequently be used by banks, insurers, mortgage providers and other financial institutions.
Fifth, Zimbabwe should make formal retail part of the financial-inclusion strategy. Retailers are already natural distribution points for financial services. Properly regulated partnerships between banks, retailers and fintech companies could expand access to savings, payments and credit while reducing the cost of financial intermediation.
Sixth, the government should avoid trying to create demand for ZiG through coercion alone. The strongest currency policy is one that makes the domestic currency economically attractive. If salaries, savings, loans, taxes, mortgages and investments can all be conducted reliably in ZiG, consumers will have an economic reason to use it.
Seventh, Zimbabwe should allow the US dollar to remain part of the transition. The objective should be competitive monetary credibility rather than administrative prohibition. A domestic currency that requires bans and penalties to survive is not yet a successful currency.
The Ultimate Test Is Not the Exchange Rate
Zimbabwe often evaluates monetary policy through one number: the exchange rate against the US dollar. That is important, but it is not the ultimate test.
The more important question is whether Zimbabweans are prepared to save, borrow, lend, invest and contract in ZiG.
If a retailer can extend a 12-month ZiG loan without fearing that inflation will destroy the real value of its receivables, the currency is functioning.
If a bank can finance a five-year business loan in ZiG at a predictable real interest rate, the currency is functioning.
If a household can save in ZiG and retain confidence in its purchasing power, the currency is functioning.
If a developer can finance a housing project in ZiG, a manufacturer can borrow to expand production and a retailer can build a domestic-currency credit book, then the country has begun to rebuild its monetary system.
That is a much more meaningful measure than simply whether ZiG trades at a particular exchange rate.
The Bigger Prize Is Formalisation
A credible currency could become one of the foundations for rebuilding Zimbabwe’s formal economy.
Stable money makes prices more meaningful. Meaningful prices make contracts more reliable. Reliable contracts make credit possible. Credit supports investment. Investment creates employment. Employment generates taxable income. Tax revenue strengthens the state. The cycle works in reverse when money is unstable.
Currency instability encourages dollarisation and informality. Informality weakens the tax base and reduces access to formal finance. Weak finance restricts investment. Low investment constrains productivity and employment.
Zimbabwe therefore needs to understand that monetary reform is not an isolated Reserve Bank project.
It is an economic-development project.
From Clothing Retail to National Economic Infrastructure
The story of Edgars and Truworths ultimately reveals something much bigger than the history of Zimbabwean clothing stores.
They succeeded partly because they understood that their customers did not simply need clothes. They needed purchasing power today against income they would earn tomorrow.
The retailer supplied both the product and the financing.
That model worked because the monetary environment made it possible to extend credit over time.
Zimbabwe now needs to recreate that functionality across the economy.
A credible domestic currency would allow the country to develop deeper local-currency banking, consumer finance, mortgages, business lending and investment. It would give domestic savings a more direct relationship with domestic investment.
The objective, therefore, should not be to force Zimbabweans to abandon the US dollar.
It should be to make the domestic currency sufficiently credible that they no longer need the US dollar for every important economic decision.
Conclusion: Zimbabwe Needs Money That Works for Zimbabwe
Zimbabwe’s currency debate is often presented as a choice between the stability of the US dollar and the sovereignty of a domestic currency.
That is the wrong framing.
The real choice is between an economy that remains structurally dependent on externally supplied liquidity and one capable of generating its own credible financial intermediation.
The US dollar provided Zimbabwe with monetary stability after the catastrophe of hyperinflation. That contribution should not be dismissed. But a country cannot indefinitely build its domestic financial architecture around a currency whose supply, monetary policy and liquidity conditions are determined elsewhere.
Zimbabwe needs a domestic currency because it needs a domestic credit system.
It needs a domestic credit system because businesses and households need to borrow against future income.
And it needs that borrowing capacity if it is going to finance housing, manufacturing, retail consumption, entrepreneurship and investment at scale.
The lesson from Edgars and Truworths is therefore surprisingly profound.
Zimbabwe’s retailers were never merely selling clothes. They were selling purchasing power.
The next stage of Zimbabwe’s economic development requires the country to build a monetary and financial system capable of doing the same thing for the entire economy — turning Zimbabwean savings and future Zimbabwean income into present-day investment and consumption.
That is ultimately what a successful domestic currency should do.
Not merely give Zimbabwe its own money, but give Zimbabweans a monetary system that works for their own economy.
This article is largely based on some work done by Zimbabwean Business Analyst Tinashe Mukogo of Money Moves.
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