In Harare, the government is pressing citizens to use the Zimbabwe Gold, or ZiG, more widely. Its longer-term goal is to loosen the country’s dependence on the US dollar. However, after years of currency turmoil, many people are still unwilling to place their trust in the latest attempt.
The ZiG was introduced in April 2024 as a state effort to restore confidence in the domestic currency. The Reserve Bank of Zimbabwe (RBZ) says the currency is backed by foreign currency and precious metal reserves, with gold among them.
Memories of past currency collapses hold back trust
Creating a new currency and building up reserves are only part of the challenge. Zimbabweans who have seen their savings lose value and their wages shrink through a series of currency crises are understandably cautious. Many fear the purchasing power of the ZiG could weaken, making them reluctant to hold it.
Zimbabwe gave up its local currency in 2009 after a period of hyperinflation and adopted a multicurrency system in which the US dollar dominated. A domestic currency returned in 2018, but repeated instability has made it hard to rebuild public faith.
Charles Mbwandarikwa, a primary school teacher, illustrates the problem. About a third of his salary is paid in ZiG, and he exchanges it quickly rather than keeping it. His caution comes from the losses he suffered when the previous currency collapsed.
He lost his pension savings during the 2009 crisis. He says that when the local currency was reintroduced in 2018, the value of his salary dropped from the equivalent of $540 to $40 by the end of that year. Experiences like his help explain why official assurances have not automatically won over earners.
Central bank moves to shore up the ZiG
The RBZ has tried to strengthen the currency’s credibility. On April 7, the bank introduced an upgraded series of ZiG banknotes with revised designs and security features. According to the RBZ, annual inflation stood at 3.7 percent last month.
Low inflation on its own, however, does not guarantee that people will save in the currency or use it for everyday purchases. The RBZ has also moved away from its earlier target of adopting a single currency by 2030. It now favours a gradual, market-led shift towards wider use of the ZiG, which depends on sustained economic stability and conditions that encourage voluntary adoption.
The bank has further sought to expand the currency’s role at home. Measures include accepting ZiG for tax payments and public-sector transactions, alongside changes affecting the foreign exchange and national payments systems. Yet wider use in payments is not the same as trusting the currency to hold its value, and people may use ZiG only when circumstances leave them little choice.
Weak demand and businesses that still prefer dollars
Economist Cornelius Dube says demand for the ZiG remains weak. “ZiG has to be available in a ratio relative to its demand. Demand for ZiG is currently very subdued,” he says.
For businesses, customer acceptance is the practical test of whether the currency can play a bigger role in the economy. Sesedzai Chigumira, a clothing retailer, says she has made only a handful of sales in ZiG. Her experience shows how difficult it is to promote a currency when customers and businesses still feel more at ease with US dollars.
Gold and other minerals do not, by themselves, make people confident in a currency. They need to believe it will keep its value and remain useful for paying for goods, covering expenses and saving. If businesses expect customers to prefer dollars, they may be reluctant to price goods or accept ZiG. Consumers, in turn, have little reason to hold the local currency if they fear it will lose value, creating a cycle that policy alone may struggle to break.
Whether trust in the ZiG can be rebuilt
Dube says moving away from the dollar is possible but cannot happen overnight. “History shows that it is possible to de-dollarise, though it’s not easy. It takes time,” he says. He has argued that policy should create incentives rather than force a conversion, so that businesses and consumers eventually become indifferent to holding ZiG or US dollars.
For Zimbabweans who have lived through repeated crises, the key question is whether the ZiG can preserve their earnings and savings over time. Policy may be able to widen its use, but persuading people to trust the currency will depend on sustained stability and confidence over the long run.
