Zimbabwe plans to stop using U.S. dollars domestically by 2030 and run on the ZiG alone. The World Bank says the timeline is crucial. In a report Friday it cautioned, "The government's goal of transitioning to a mono-currency ZiG system carries a risk of premature de-dollarization." Pointing to the fact that Zimbabwe brought back the Zimbabwean dollar in 2019, the report added, "forcing a shift before local currency credibility is established triggers capital flight, widens parallel market premiums, and reverses stabilization gains." The lender also underscored that "The pace and sequencing of any transition will be as important as the destination."
After multiple crashes fanned inflation, reducing the Zimbabwean dollar's use, authorities replaced it with the bullion-backed ZiG in April 2024. The government's aim is to make the ZiG the sole legal tender at home by 2030. The World Bank's through line here is simple: build credibility first, then consolidate.
Since a 1999 default, Zimbabwe has had no access to international debt markets; however, prospects are emerging to regain entry and ease external funding conditions as the government works with multilateral lenders on clearing arrears. Recently, France and the UK consented to serve as co-chairs of a platform aimed at restructuring the billions in obligations. As the World Bank put it, "These changes represent a big shift in the macroeconomic environment and an opening for more ambitious reform."
On growth, the World Bank projects 5% expansion for this year, aligning with the government's forecast. Victor Steenbergen, a senior country economist, told an interviewer that a slowdown is expected in 2027 due to El Niño. Forecasts indicate the ongoing El Niño is likely to be the most powerful ever recorded, bringing severe drought risks to parts of southern Africa.
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If Zimbabwe moves too fast to a single-currency regime, the World Bank warns it could spark capital flight, widen the parallel market premium, and undo recent stabilization progress. For anyone with exposure to Zimbabwe's economy, the key variable to watch is how carefully policy makers pace and sequence the shift to ZiG-only.
