By Business Reporter-Finance Minister Mthuli Ncube has doubled down on the government’s commitment to phasing out the multi-currency system despite the ongoing decline of the Zimbabwean dollar (ZiG), which continues to lose value daily.

Presenting the 2024 Mid-Term Budget Review in Harare, Ncube boldly asserted that the de-dollarisation process is “well underway” and aimed at establishing a “mono-currency regime” supported by a stable local currency. He stated:

“The phased de-dollarisation programme is well underway and seeks to re-establish a mono-currency regime, backed by a domestic currency that can spur domestic production and boost exports by making local products more competitive in international markets. Sustaining the stability in the medium-to-long term will require consistency in the implementation of policy reforms, effective management of liquidity injections into the market, as well as foreign currency generation and supply to the economy. Furthermore, confidence-building measures will be instituted and clearly communicated to the market to upscale trust, acceptance, and use of the domestic currency.”

Ncube emphasised the government’s intention to adopt a pragmatic, market-oriented approach to de-dollarisation, aiming to counteract the negative perceptions and adverse expectations that have historically undermined policy effectiveness.

Regarding the local currency, Ncube assured that an optimal supply of ZiG notes and coins would be maintained, balancing transactional convenience with preserving the currency’s value.

In addition to currency stabilisation, Ncube outlined a comprehensive macroeconomic strategy, which includes restructuring national debt, tightening monetary policy, and increasing domestic revenue collection. He explained:
“Restructuring the national debt to reduce servicing costs and alignment to Budget capacity; effectively managing liquidity injections into the market through the Liquidity Management Committee; following up on measures to strengthen the demand and use of domestic currency by government, the corporate world, and the general public; progressively switching the foreign and local currency mix in the economy as part of the de-dollarisation strategy… Fiscal consolidation measures, including domestic revenue mobilisation and asset disposal, will be employed to ensure sustainable fiscal deficit financing and avoid the inflationary and self-defeating recourse to the central bank overdraft facility.”

Economists caution that the success of Zimbabwe’s de-dollarisation programme will ultimately depend on the government’s ability to implement consistent policies, restore public confidence, and address the underlying economic challenges facing the nation.