Business Leaders Urge RBZ To Reduce Regulatory Costs
Business leaders have urged the Reserve Bank of Zimbabwe (RBZ) to implement measures that promote economic stability, and growth, and reduce regulatory costs, reports Business Times.
This call comes as RBZ Governor John Mushayavanhu is set to present the 2025 Monetary Policy Statement in the coming weeks.
The CEO Africa Roundtable (ART) said the instability in financial markets has led to a rise in informal economic activities, with over US$2.7bn reportedly held outside the formal banking system due to diminished trust in RBZ policies. The CEO ART said in its position paper:
A vicious cycle of volatility in inflation and exchange rates has driven formal businesses into informal operations.
The decline in trust toward local currency ZiG stems from poor policy management and insufficient consumer demand for its usage.
The ART called on the government to lead by example, mandating the use of local currency in key transactions and addressing structural inefficiencies to reduce arbitrage opportunities.
ART said the RBZ to build and maintain foreign reserves equivalent to at least three months of import cover. This would strengthen the central bank’s capacity to guide monetary and financial markets effectively.
With about 70% of economic activity in the informal sector, business leaders urged the government to integrate these players into the formal economy through education, incentives, and tailored policies.
The Zimbabwe National Chamber of Commerce (ZNCC) suggested reducing transaction fees to encourage digital payment adoption, especially among Micro, Small, and Medium Enterprises (MSMEs).
ZNCC urged the central bank to prioritise the stabilisation of the exchange rate for the upcoming monetary policy.
They noted significant challenges in the interbank market, where the “Willing Seller, Willing Buyer” model suffers from limited foreign currency supply.
ZNCC also recommended offering competitive exchange rates and reducing transaction costs to incentivize private sector players with surplus foreign currency to participate in formal markets.
Despite some stability, the 20% premium between official and parallel market rates erodes confidence in ZiG, perpetuating inflation and undermining the local currency, said the ZNCC.
Business leaders also called for issuing higher-denomination notes to facilitate large transactions in a cash-based economy.
ZNCC proposed maintaining a dual currency system in the short to medium term while gradually increasing local currency transactions.
The Confederation of Zimbabwe Retailers (CZR) President, Denford Mutashu, noted that fluctuations in ZiG’s value against the US dollar disrupted pricing strategies, eroded consumer confidence, and reduced purchasing power.
Mutashu stressed the importance of policy consistency and incentivizing businesses that prioritize local currency transactions to help restore confidence in ZiG.
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