Captains of industry and commerce as well as economists have welcomed the extension of the tenure of the multi-currency regime beyond the initially planned cut-off period of 2025 to 2030.
In a government gazette on Friday, 27 October, President Emmerson Mnangagwa repealed the 2019 order which had given 2025 as the deadline.
Mnangagwa invoked Section 2 of the Presidential Powers (Temporary Measures) Act to extend the duration of the multicurrency regime to 2030.
A notice published in the Government Gazette reads:
His Excellency, the President, in terms of Section 2 of the Presidential Powers (Temporary Measures) Act (Chapter 10:20) hereby makes the following regulations:-
These regulations may be cited as Presidential Powers (Temporary Measures) (Amendment of Exchange Control Act) Regulations, 2023.
The Exchange Control Act (Chapter 20:05) is amended in Section 11 (Civil Penalties Orders) by the repeal of Subsection (2a) and substitution of-
(2a) The provisions of the Schedule, in so far as they expressly or impliedly permit the settlement of any transaction or the payment for goods and services in foreign currency, shall, notwithstanding Statutory Instrument 142 of 2019, be valid until 31st December 2030.
Statutory Instrument 142 of 2019 provided for the Zimbabwe dollar as the sole legal tender for local transactions.
In June 2022, the Government promulgated Statutory Instrument (SI) 118A of 2022, which provided for the multi-currency system for the entire period of National Development Strategy 1 (NDS1), a five-year economic blueprint adopted by the Government in 2020 and runs through to December 2025.
Speaking to The Herald following the extension of the multi-currency system to 2030, Confederation of Zimbabwe Industries (CZI) president Kurai Matsheza said:
We are happy that what we have been asking for has been answered, and we hope it will bring some stability and certainty.
However a successive plan needs to be tabled because 2030 is not very far away, so we have to work on what comes next after 2030.
Economist, Persistence Gwanyanya, who is also a member of the Reserve Bank of Zimbabwe’s Monetary Policy Committee said:
The policy maker has answered the market’s call about multiple currency, curbing the uncertainty on the multicurrency system, the expiry date was approaching.
This nurtures confidence, de-dollarisation is going to be market-driven, it is not going to be dictated (to the market by the Government), and monetary authorities should now seek an optimal currency mix.
Posting on X (formerly Twitter), Busisa Moyo, chief executive of United Refineries, who is also the chairman of the Zimbabwe International Trade Fair Company (ZITF) said:
This is a positive development for corporates & economic actors. Prior to this USD could only have a tenure of up to 30 June 2025 or earlier.
The work of a dignified, fungible & stable local currency ZWL or ZWX still remains to be mapped out carefully & effectively.
Former banker and businessman, Nigel Chanakira, wrote on the X platform:
Perhaps now the banks can commence business and give six-year loans & mortgages in US dollars. Government may also be able to issue six-year debt instruments and allow the market to create a 1-6 year yield curve.
Zimbabwe’s multi-currency system is dominated by the United States dollar and economists say nearly 80 percent of local transactions are in US dollars.
Zimbabwe abandoned its own currency (Zimbabwe Dollar) in 2009, opting instead to use foreign currencies, mostly the United States dollar and South African Rand.
The government reintroduced the local currency in 2019, but it rapidly lost value again, necessitating the reintroduction of a multi-currency system.
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