Zimbabwe’s economy is on the edge again. The country’s new currency, ZiG, introduced with promises of stability and backed by gold, is now causing more harm than good. Instead of fixing the economy, it is destroying businesses, especially retailers. The result is rising inflation, falling currency value, and the real fear that more shops will soon shut their doors.
When ZiG was launched in April 2024, the government said it would bring stability. But just months later, the currency has lost nearly half of its value. On the black market, US$1 is now equal to ZiG30, while the official rate remains stuck at ZiG13.8. This huge difference between official and street rates is creating chaos. Retailers are forced to sell goods at the official rate, while informal sellers use the black market rate to undercut them. This is making it almost impossible for formal businesses to survive.
Major supermarket chains like OK Zimbabwe, PicknPay, and SPAR are struggling. Because they must follow the official exchange rate, their goods are much more expensive than those sold in informal markets. As a result, customers are walking away. The Retailers Association of Zimbabwe (RAZ) has sounded the alarm. They say many shops could shut down if the government does not act fast.
While President Emmerson Mnangagwa says he wants to stop the use of US dollars and rely only on ZiG, most people do not trust the new currency. There is already a shortage of ZiG cash, and the government has quietly admitted that foreign currencies will continue to be legal until 2030. Even then, the signs show that the ZiG could collapse just like Zimbabwe’s six failed currencies before it.
The Reserve Bank, led by John Mushayavanhu, promised that it would not print more money. But already, reports show that more ZiG is being pumped into the economy to try and cover up the mess. This is causing inflation to rise even faster. While the government claims that inflation is at just 3.7%, independent experts say it’s closer to 800%. Zimbabwe is once again among the countries with the worst inflation in the world.
The government also tried to control how much money was in circulation to protect ZiG. But this only slowed down spending and hurt businesses. Now, people are not buying goods, and the economy is stuck. At the same time, money supply is growing at 283% every year, but it’s not moving around. This is a bad sign—it means the economy is frozen, and people are scared to spend.
What makes it worse is that the government’s actions are pushing formal businesses to the edge. When prices keep changing, and the exchange rate makes no sense, businesses cannot plan. Retailers are being forced to work in a system that is unfair and broken. They are now begging the government to act before everything falls apart.
Many economists believe the real problem is not the currency. It’s politics. Corruption, poor leadership, and a lack of trust are the real causes of Zimbabwe’s crisis. These experts say that without serious political and economic reforms, no currency—gold-backed or not—can work.
Zimbabwe is also facing a tough time getting help from other countries. It owes over US$21 billion in debt and has little access to outside funding. Most of its borrowing now comes from the private sector, which charges high interest rates. The government’s talks with the international community for debt relief are not going well, and Zimbabwe remains isolated.
In the end, the ZiG experiment is proving to be another painful chapter in Zimbabwe’s long economic crisis. Retailers are now the latest victims. As shops close and inflation rises, the people are left to suffer the consequences of failed policies and false promises.
Without bold changes, the ZiG will fall like all the other currencies before it. And once again, it is the ordinary people and honest businesses who will pay the price.