The Zimbabwe National Chamber of Commerce (ZNCC) has warned the government that the country’s foreign currency reserves, which stand at US$540 million, are insufficient to cover even one month of imports.
The warning comes as Zimbabwe faces a growing financial crisis, with the country being unable to access new credit lines from global lenders and its national debt soaring to US$21 billion.
In its latest industry and commerce report, released this week, the ZNCC said that Zimbabwe’s imports in October 2024 alone amounted to US$835.8 million, surpassing exports, which totalled US$698.1 million.
This growing disparity further exacerbates the country’s foreign currency shortage and deepens its economic challenges. Reads the report:
Zimbabwe’s current foreign exchange reserves, amounting to approximately US$540 million as of 31 October 2024, are far from sufficient to inspire confidence.
While this figure reportedly provides more than three times the reserve money cover, it pales compared to the country’s import needs.
For perspective, Zimbabwe’s imports in October 2024 alone totalled US$835,8 million, significantly higher than exports, which amounted to US$698,1 million.
This means the country’s official reserves are insufficient to cover even one month’s import bill, raising serious concerns about the sustainability of the nation’s foreign currency management and the goal of exchange rate stability.
While presenting the 2025 National Budget last Thursday, Finance Minister Mthuli Ncube announced that Zimbabwe’s foreign currency receipts had risen by 17.9%, reaching US$10 billion in the first nine months of 2024, up from US$8.5 billion during the same period in 2023.
This increase was largely attributed to higher export receipts and diaspora remittances, which contributed 59% and 25% of the total inflows, respectively.
However, in its latest report, the ZNCC expressed concern over the lack of confidence in the ZiG, which was introduced in April, by both households and businesses. It said:
The policymakers’ statements regarding the expedited de-dollarisation framework following the new currency’s launch have further discouraged households and businesses from holding onto the ZiG for extended periods.
This reaction is rooted in memories of the policy steps taken in 2019 under similar circumstances.
Moreover, with the government being the largest employer and the ZiG essentially functioning as a ‘small change’, civil servants, other employees, and employers — whose incomes are predominantly in ZiG — face challenges.
Despite earning in ZiG, they must pay for essentials such as transportation, fuel, rent, and groceries, which are generally cheaper in US dollars.
As a result, many are offloading their ZiG earnings on the parallel market, irrespective of the prevailing rate, while others are offloading their ZiG balances on the formal market, taking advantage of the rate differentials.
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