HARARE – Economic policy think tank Africa Economic Development Strategies (AEDS) has unveiled a comprehensive roadmap to transition Zimbabwe to a fully fledged single-currency economy centred on the Zimbabwe Gold (ZiG), proposing that the country could achieve this milestone as early as 2028 through a carefully managed, phased reform programme.
The proposal was presented during the Mid-Term Economic Review and High-Level Policy Dialogue held in Harare last week, as policymakers, economists and business leaders continue debating the long-term future of Zimbabwe’s monetary system ahead of the 2026 Mid-Term Fiscal and Monetary Policy Review.
Speaking on the sidelines of the conference, AEDS Executive Director Professor Gift Mugano, according to State media, argued that Zimbabwe’s current multi-currency framework remains overwhelmingly dominated by the United States dollar, significantly limiting the effectiveness of domestic monetary policy.
“We believe it is critically important to sustain these policy conversations if Zimbabwe is to guarantee durable macroeconomic stability,” Prof Mugano said. “As long as the US dollar remains the dominant medium of exchange, it effectively weakens the Reserve Bank’s ability to influence economic activity through monetary policy.”
Restoring Monetary Sovereignty
Zimbabwe has operated under a multi-currency regime for more than a decade following the collapse of the Zimbabwe dollar during the hyperinflation era. While the Government had initially indicated that the economy would fully migrate to a domestic currency by 2030, authorities have since abandoned a fixed deadline in favour of a conditions-based approach.
Officials now maintain that the transition will only occur once critical macroeconomic fundamentals—including exchange rate stability, low inflation, sufficient foreign exchange reserves and sustained public confidence—have been firmly established.
Recent economic indicators suggest that progress is being made towards those objectives.
Strong export earnings, growing diaspora remittances and improved monetary discipline have contributed to steadily rising foreign currency reserves, with Zimbabwe expected to achieve approximately two months of import cover by the end of the year, moving closer to the internationally accepted benchmark of between three and six months.
At the same time, the ZiG has maintained relative stability on the interbank foreign exchange market, while annual inflation has remained within single-digit levels, strengthening confidence in the country’s broader macroeconomic framework.
Finance Act Amendments Proposed
Central to the AEDS proposal is an amendment to the Finance Act that would fundamentally reshape demand for the local currency.
Under existing legislation, businesses pay taxes in the same currency in which they conduct transactions. Although major exporters—including mining companies—are required under Reserve Bank regulations to surrender 30 percent of their foreign currency earnings in exchange for ZiG, they subsequently convert much of that local currency back into US dollars to meet tax obligations and other foreign currency commitments.
According to Prof Mugano, this cycle undermines efforts to deepen circulation of the local currency.
“A key structural reform would be to require major tax obligations such as Value Added Tax (VAT), customs duties and other significant fiscal payments to be settled in ZiG,” he said.
“Such a measure would immediately change corporate behaviour by encouraging businesses to retain and utilise local currency rather than treating it as a temporary holding instrument.”
The think tank believes that creating sustained transactional demand for ZiG would strengthen the domestic monetary transmission mechanism while improving the Reserve Bank of Zimbabwe’s ability to manage liquidity and influence economic activity.
Tax Incentives to Encourage ZiG Adoption
Beyond regulatory reforms, AEDS recommends introducing preferential tax incentives designed to encourage businesses to adopt the local currency voluntarily.
Under the proposal, companies settling tax obligations in ZiG would benefit from lower effective tax rates than firms choosing or required to pay in US dollars, creating a direct financial incentive for greater use of the domestic currency.
The think tank argues that market-based incentives would encourage gradual behavioural change while minimising disruption to industry.
Phased Transition Critical
Prof Mugano cautioned against an abrupt shift to a mono-currency system, warning that sudden policy changes could undermine confidence, disrupt production and reignite inflationary pressures.
Instead, AEDS recommends a carefully sequenced implementation over the next two years that would allow businesses, financial institutions and consumers sufficient time to adapt.
“This transition must avoid the mistakes associated with abrupt policy shocks,” he said.
“A gradual, programmatic approach allows economic agents to adjust while safeguarding productivity, preserving confidence and maintaining macroeconomic stability.”
Backing ZiG With Foreign Currency Reserves
The roadmap also proposes a structured liquidity management framework designed to expand ZiG circulation without triggering inflation.
Under the model, Treasury would sell part of its accumulated US dollar tax revenues to the Reserve Bank of Zimbabwe in exchange for newly issued ZiG.
The mechanism would simultaneously strengthen the central bank’s foreign exchange reserves while providing Government with local currency resources to finance domestic expenditures, including payments to contractors and suppliers.
Importantly, every additional ZiG introduced into circulation would be directly backed by foreign currency assets held by the Reserve Bank, reinforcing confidence in the currency and reducing concerns over excessive money creation.
According to AEDS, because businesses would already require ZiG to meet tax obligations under the proposed reforms, the additional liquidity would be naturally absorbed within the productive economy rather than spilling into speculative parallel market activity.
Continued Policy Dialogue Essential
Prof Mugano emphasised that maintaining dialogue among policymakers, financial institutions, businesses and other stakeholders would be essential to ensuring the long-term success of Zimbabwe’s monetary reforms.
“We feel it is very important for us to continue these conversations on how we can continue to guarantee durable economic stability,” he said.
As Government prepares its forthcoming Mid-Term Fiscal and Monetary Policy Review, AEDS’ proposals are expected to contribute to ongoing discussions surrounding Zimbabwe’s long-term monetary strategy, fiscal reforms and the conditions required for an eventual transition to a sustainable single-currency economy anchored by the ZiG.
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