The International Monetary Fund (IMF) has recommended that Zimbabwe transition to using its gold-backed currency, the Zimbabwe Gold (ZiG), as the country’s sole legal tender. The call comes as part of the IMF’s latest economic assessment, following ZiG’s introduction in April 2024.
According to the IMF, adopting ZiG exclusively could help consolidate recent economic stability gains and reduce inflationary pressures that have long plagued the country. The Fund commended the initial performance of ZiG and advised the Zimbabwean authorities to continue implementing tight monetary policies and developing tools to support interest rate management.
Since its launch, ZiG has helped restore some confidence in Zimbabwe’s monetary system, with inflation cooling and the exchange rate stabilising. These improvements prompted Zimbabwe’s ruling party, ZANU-PF, to endorse the idea of making ZiG the only accepted currency in domestic transactions, gradually phasing out the U.S. dollar, which currently dominates the local economy.
However, government officials have signalled a more cautious approach. Finance Minister Mthuli Ncube noted that Zimbabwe must first resolve its external debt, estimated at around US $21 billion, and reestablish access to international credit markets before fully adopting a single currency regime. He also emphasised the need to build broad public confidence in the ZiG.
Economic analysts share similar concerns, warning that a premature transition could risk destabilising recent gains. They argue that consistent policy implementation, fiscal discipline, and stronger monetary institutions are critical to earning public trust and making the ZiG sustainable over the long term.
The IMF’s recommendation highlights renewed optimism about Zimbabwe’s monetary direction but also underscores the challenges ahead. While the ZiG has shown early promise, a complete shift away from the U.S. dollar will require careful planning, debt resolution, and sustained policy credibility.
