Victoria Falls Correspondent
VICTORIA FALLS – The Reserve Bank of Zimbabwe (RBZ) has reaffirmed its commitment to stabilizing the economy and accelerating de-dollarization, banking on the mining sector’s pivotal role to drive growth despite mounting global pressures, Deputy Governor Dr. Innocent Matshe announced at the Zimbabwe Annual Mining Conference this week.
Addressing industry leaders, Dr. Matshe acknowledged the “toxic cocktail” of geopolitical tensions, trade wars, and tighter global financial conditions dampening economic prospects worldwide.
Global growth is now projected to slow to 2.8% in 2025, with inflation easing to 4.3%, but Zimbabwe’s domestic economy, he argued, remains resilient.
“While global headwinds have suppressed mineral prices and capital inflows, our economy is poised to grow by 6% in 2025, anchored by agriculture and mining,” said Dr. Matshe.
Here highlighted agriculture’s expected 21.1% surge and mining’s 2.9% growth as key drivers, with the latter generating US$1.4 billion in foreign exchange inflows in Q1 2025 alone – up from US$1.09 billion in 2024.
Mining: A Lifeline for Stability
Despite a dip in mining’s share of total forex inflows (from 49.5% in 2023 to 44.3% in 2024), Dr. Matshe emphasized the sector’s “irreplaceable role” in stabilizing the Zimbabwe Gold (ZWG) currency and advancing de-dollarization.
“Foreign currency from mining royalties and surrender requirements is critical to liquefying the interbank market, meeting government obligations, and building reserves to support our 2030 de-dollarization target,” he stated.
The deputy governor urged miners to “lead by example” in adopting the ZWG, calling for increased local procurement and ZWG transactions.
“Sustainable de-dollarization demands collective effort. Every miner sourcing local goods in ZWG strengthens demand for our currency,” he said.
Progress and Prudence
Dr. Matshe touted strides in stabilizing the ZWG since the April 2024 launch of the structured currency. The parallel market premium, he noted, has been contained to 20%, while the Real Effective Exchange Rate (REER) shows “no significant misalignment.” Reserves now fully cover ZWG reserve money and banking sector deposits, “buffering against external shocks,” he added.
Transactional use of the ZWG has risen from 26% to over 36% in the past year, aided by government measures like tax payments in local currency and expanded Point-of-Sale (POS) systems.
Inflation, meanwhile, is projected to fall to 30% annually by December 2025, with monthly rates averaging below 3%.
Balancing Growth and Stability
While optimistic, Dr. Matshe cautioned that monetary policy must “walk a tightrope” between curbing inflation and fueling growth.
“We remain committed to policies that anchor inflation expectations and sustain confidence in the ZWG,” he said, stressing the need to shield key sectors like mining from volatility.
The RBZ’s de-dollarization roadmap leans on lessons from nations that achieved durable stability through fiscal discipline, robust reserves, and strong local currency demand.
“The journey is arduous, but with mining as our cornerstone, we are on track,” Dr. Matshe concluded, rallying stakeholders to “forge a unified path toward macroeconomic resilience.”
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