IMF Urges Clarity on Zimbabwe’s Plan to Adopt ZiG as Sole Currency by 2030

The IMF has urged Zimbabwe to clarify its plan to make the Zimbabwe Gold (ZiG) the sole legal tender by 2030 (image source)

In its latest country report, the International Monetary Fund (IMF) has called on Zimbabwe to clarify its transitional roadmap for phasing out the multi-currency system dominated by the US dollar and establishing the Zimbabwe Gold (ZiG) as the sole legal tender by 2030.

The IMF notes that while ZiG has shown relative stability over the past year, the US dollar remains the primary medium of exchange, store of value, and unit of account in domestic transactions. Policymakers must spell out whether the mono-currency regime will apply strictly to on-shore transactions or extend to bank deposit denominations.

According to the IMF, Zimbabwe’s monetary system remains highly dollarized, with the US dollar accounting for over 80 percent of monetary aggregates. Prices are frequently quoted in USD, and both salaries and everyday transactions are typically settled, fully or partially, in foreign currency. In contrast, ZiG’s share of monetary aggregates hovers around 17 percent, limiting its impact on inflation control and financial inclusion. Without decisive action, the persistence of dual-currency usage may undermine confidence in the ZiG and perpetuate exchange rate distortions.

One key recommendation involves abolishing the intermediated money transfer tax on electronic payments, since most ZiG transactions occur digitally. Zimbabwean consumers and businesses often avoid ZiG transfers due to the added levy, opting instead for untaxed US dollar transactions. Eliminating this tax could incentivize wider acceptance of the ZiG and increase on-ledger activity. A reduction in transaction costs would also support small and medium enterprises seeking access to affordable payment systems.

The Fund stresses the need for a market-determined exchange rate to strengthen ZiG credibility. Achieving this requires reducing the Reserve Bank of Zimbabwe’s footprint in the foreign exchange market by redirecting surrender requirements through authorized dealers and lifting existing exchange restrictions. A transparent FX regime would narrow the gap between official and parallel market rates, bolster investor confidence, and reduce economic distortions. Clear guidelines on the phasing-out timeline and technical modalities are critical to avoid sudden shocks.

Despite the ZiG’s stability in Harare, most towns lack sufficient supplies, prompting traders to use South African rand or US dollars. Bulawayo, Gwanda, Beitbridge and Masvingo residents routinely default to rand transactions for cross-border trade and daily commerce. Bridging this geographic disparity will require targeted currency distribution plans and public-awareness campaigns to build trust in the ZiG across all provinces.

Zimbabwe is poised to unveil its National Development Strategy 2 (NDS2) next month, where authorities are expected to detail the mono-currency transition framework. The strategy must address sequencing for phasing out USD legal tender, mechanisms for converting existing deposits, and safeguards for financial stability. Comprehensive stakeholder consultation, including banks, businesses and consumer groups, will be essential to ensure a smooth shift.

As Zimbabwe looks to reassert monetary sovereignty, a clear, transparent and participatory transition plan will determine whether the ZiG can supplant the US dollar and deliver long-term price stability and economic resilience.