IMF Demands Clarity On Zim’s 2030 De-dollarisation Plan

The Post On Sunday

The International Monetary Fund (IMF) has called on Zimbabwean authorities to provide greater clarity and transparency regarding their ambitious plan to phase out the use of the United States dollar by 2030, amid growing uncertainty about the readiness and stability of the local unit, the Zimbabwe Gold (ZiG).

In its latest report following the annual Article IV consultation, a comprehensive review of Zimbabwe’s economic and financial policies, the IMF noted that while the government’s roadmap towards de-dollarisation signals intent to restore full monetary sovereignty, many critical questions remain unanswered.

At the heart of the Fund’s concerns is whether the ZiG, introduced earlier this year to stabilise the economy and anchor inflation expectations, has gained sufficient traction and public confidence to support such a monumental policy shift.

“Zimbabwe must provide more clarity on the implications of its plan to phase out domestic use of the US dollar by 2030,” the IMF said, warning that premature or poorly managed currency reforms could reignite economic instability.

The IMF’s assessment comes at a time when the ZiG, although hailed by authorities as a “gold-backed” and “stable” currency, has yet to find widespread acceptance in everyday transactions. Many businesses, especially in retail, transport, and real estate, continue to price goods and services predominantly in US dollars, reflecting deep-seated scepticism rooted in the country’s past monetary crises.

While the Reserve Bank of Zimbabwe maintains that the ZiG’s introduction was aimed at curbing inflation and rebuilding confidence, the IMF’s report highlights a key policy ambiguity, whether Zimbabwe’s financial institutions will continue to allow US dollar deposits and transactions even after the 2030 deadline.

“It remains unclear if the use of the ZiG will be limited to domestic transactions, while allowing bank deposits and international settlements in foreign currency,” the Fund noted, calling for detailed policy communication to avoid market uncertainty.

Economists say the IMF’s concerns echo broader fears within the business community that the government may be moving too quickly towards de-dollarisation without first ensuring macroeconomic stability, productive capacity growth, and institutional trust.

Since dollarisation was reintroduced in 2019 following the collapse of the bond note system, foreign currency has become the backbone of Zimbabwe’s economy, accounting for more than 80% of all transactions. Attempts to force the use of a local currency have repeatedly met with resistance from both the market and the public.

Analysts argue that while de-dollarisation is a desirable long-term goal for national sovereignty and policy flexibility, it must be guided by strong economic fundamentals, including a credible exchange rate, sufficient reserves, fiscal discipline, and public confidence in the central bank.

“The IMF is essentially warning Zimbabwe not to rush into political symbolism,” said one Harare-based economist. “A currency derives its strength not from decrees but from confidence, productivity, and sound policy. The ZiG still has to earn that trust.”

The ZiG, introduced in April 2024, was pegged to a basket of foreign currencies and precious metals in an effort to anchor value and reduce volatility. Initially, it was met with cautious optimism, but its real-world application has been slow to materialise, with reports of inconsistent exchange rates and limited availability of smaller denominations.

In response to the IMF report, the Ministry of Finance has reiterated its commitment to a “gradual, transparent, and inclusive” currency transition, emphasising that the 2030 timeline is not a fixed cut-off but a strategic target aligned with broader economic reforms.

However, business groups and labour unions remain wary. Many fear that without sufficient safeguards, the phasing out of the US dollar could trigger renewed inflationary pressures, disrupt supply chains, and erode savings, a painful reminder of the 2008 hyperinflation era that wiped out pensions and destroyed livelihoods.

As the debate intensifies, the IMF’s message is clear, successful currency reform will require not just policy announcements, but concrete steps to build trust, ensure transparency, and strengthen economic fundamentals.

For now, Zimbabwe finds itself balancing between aspiration and reality, striving for monetary independence while still tethered to the global anchor of the US dollar. The coming years will determine whether the ZiG can evolve from a policy experiment into a trusted national currency, or remain another chapter in Zimbabwe’s long and turbulent monetary journey.