The Zimbabwean government has ruled out the possibility of fully dollarising its economy, despite some viewing it as a quick fix, citing concerns that it would lead to the collapse of local industries and turn the nation into a “supermarket economy.”
During a recent parliamentary session, Deputy Minister of Finance, Economic Development, and Investment Promotion, David Mnangagwa, emphasized the government’s commitment to maintaining the current multi-currency system while working towards full de-dollarisation.
He warned that while dollarisation might seem like an easy solution, it would have long-term negative effects. Mnangagwa explained:
“Dollarisation would be the simplest route for the government to take, but it would ultimately harm the country.
Over time, it would lead to the de-industrialisation of Zimbabwe, deplete the economy’s gains, and leave future generations without jobs. Zimbabwe would become dependent on foreign goods, transforming into a supermarket for other nations.”
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He also discussed the ongoing competition between Zimbabwe’s local currency (ZiG) and the US dollar, outlining plans to eventually phase out foreign currencies and fully reintroduce Zimbabwe’s own currency, despite the challenges involved.
Mnangagwa rejected calls to allow retailers to offer discounts to customers paying in foreign currency, warning that such a system would undermine the country’s de-dollarisation efforts.
He attributed the challenges to a mix of compliance among retailers, with some following regulations while others exploit the system for personal gain.
Zimbabwe has been using a multi-currency regime since 2009, following the collapse of the Zimbabwe dollar during a period of extreme hyperinflation.
Despite efforts to transition back to a single currency, public confidence remains low, especially after the introduction of the gold-backed ZiG currency in April 2024.
