ZiG, Tight Money and 6.6% Growth: Is Zimbabwe Finally Turning the Corner?

On paper, Zimbabwe’s story in late 2025 looks almost unrecognisable from the crisis headlines of just a few years ago.

The World Bank’s latest Zimbabwe Economic Update projects 6.6% GDP growth in 2025, outpacing most of Sub-Saharan Africa, driven by a rebound in agriculture, services, and renewed investment in mining and steel.

Inflation, which has been triple-digit more often than not over the past decade, is now falling sharply: industry data show ZiG-based annual inflation dropping from over 80% in September to around 30–35% in October, with some forecasts pencilling 15–20% by the end of 2025 as the new currency stabilises and gold exports surge.

The central bank, having launched the gold-backed Zimbabwe Gold (ZiG) currency in April 2024 and then watched it devalue steeply that September, has doubled down on tight money. The policy rate has been held at a punishing 35%, while statutory reserves have been raised and monetary financing of the budget curtailed after a late-2025 wobble in the exchange rate.

And the ZiG is slowly becoming a real currency in daily life: its share of electronic payments in the National Payment System has risen from about 26% in April 2024 to over 40% by mid-2025, as cash availability improves and more transactions shift back from pure dollarisation into local money.

From a distance, it looks like a fragile success story: growth, disinflation and a functioning national currency, at last.

Up close, the picture is more complicated.

A rebound built on tight money, gold – and old scars

The growth story is real. The World Bank sees the economy expanding by 6.6% in 2025 and around 5% in 2026, thanks to good rains, steel and lithium projects coming onstream, and a services rebound.

The disinflation is also real. The IMF notes that headline inflation has fallen from more than 175% in early 2024 to below 20% by mid-2025, supported by a tighter monetary stance, improved FX management and rising gold reserves behind the ZiG.

Foreign-currency reserves have more than doubled, from about US$285m in April 2024 to over US$730m by mid-2025, with monetary gold holdings also increasing significantly.

But none of this erases the legacy:

• Zimbabwe is still officially classified as in “external and overall debt distress”, with unsustainable public debt and large arrears to the IMF, World Bank and AfDB.

• Public debt has climbed to around US$23–24 billion, including roughly US$16.7 billion in external obligationsand more than US$7 billion in arrears to official creditors.

• Independent analysts accuse the IMF of painting a “rosy” picture by projecting debt-to-GDP ratios falling sharply more through statistical rebasing and high nominal growth than through real deleveraging.

In other words: the patient looks better, but the underlying disease – chronic debt distress and broken confidence – is not yet cured.

ZiG: new currency, old questions

The ZiG is Zimbabwe’s sixth currency experiment in two decades. Launched at 13.6 per US dollar in April 2024 and backed in part by gold and FX reserves, it was meant to restore trust after years of ZWL collapse.

Reality intervened quickly:

• By September 2024, the ZiG had been devalued by around 40%, and inflation in ZiG terms spiked again.

• The IMF’s 2025 Article IV consultation flagged the need for a clear, credible de-dollarisation strategy, warning that mixed signals on the role of ZiG versus the US dollar risk undermining the transition.

Since then, policy has tightened, reserves have grown and the currency has stabilised, at least on official markets, even as a parallel-market premium persists.

For businesses and households, this creates a strange reality:

• Salaries, local taxes and many domestic prices are increasingly set in ZiG.

• Big-ticket items, rents and savings are often still thought of in US dollars.

• The line between official and parallel rates matters as much as any policy statement.

The key question is whether ZiG can survive long enough – and behave predictably enough – for people to trust it as a store of value, not just a transactional tool.

Optimists vs sceptics: two narratives

The optimistic narrative goes like this:

• Growth is strong, inflation is finally falling, reserves and gold holdings are rising.

• Tight money and the ZiG have restored a measure of monetary sovereignty and reduced the extreme “dollar vs ZWL” volatility of recent years.

• Structural steps like compensating former commercial farmers and advancing an arrears-clearance roadmap could unlock debt relief and fresh concessional financing.

From this perspective, Zimbabwe is finally moving from permanent crisis to unstable stability – fragile, but moving in the right direction.

The sceptical narrative is blunter:

• Debt remains unsustainable; arrears are huge; and growth plus rebasing may make ratios look better without meaningfully reducing the burden.

• The currency architecture is still hybrid and confusing; de-dollarisation is more slogan than reality; and confidence can evaporate quickly.

• If another shock hits – drought, commodity slump, political instability – there is little fiscal or monetary room to respond.

Both narratives are true in parts. The real issue for investors is how to position around that ambiguity.

What this means for banks, asset managers and pension funds

For foreign hedge funds, Zimbabwe is still mostly a “watch” story.

For Zimbabwean and regional institutions, it is day-to-day reality:

• Banks hold significant volumes of ZiG-denominated government and central-bank paper on their balance sheets.

• Pension funds and insurers are under pressure to invest in local assets, even as members remain mentally dollarised.

• Corporates are juggling ZiG and USD cashflows, with parallel-market dynamics never far from mind.

In that world, the critical questions are not philosophical:

• How much of our asset book is truly exposed to ZiG inflation and devaluation risk?

• How do our Zimbabwe exposures sit alongside regional and global assets in hard currency?

• Are we earning real returns after inflation – or just booking large ZiG numbers that burn away in purchasing-power terms?

Those are portfolio-construction and systems questions, not just macro ones.

Where Verī Platform fits: mapping ZiG vs the world

This is precisely the environment where Verī Platform is designed to operate – behind regulated institutions, not in front of retail investors.

For banks, asset managers, pension funds and insurers in Zimbabwe and across Africa, Verī can:

• Aggregate ZiG and USD exposures across every account and portfolio – government bonds, central-bank instruments, loans, deposits, equities and funds – into a single, look-through ledger.

• Map currency and inflation risk: how much of the book is directly tied to ZiG, how much is in hard currency, and how that balance shifts over time.

• Integrate regional and global holdings – South African, Kenyan, global equity and fixed income – so that Zimbabwe risk is seen in context, not isolation.

• Produce regulator-friendly reporting that helps supervisors understand where sovereign, currency and duration risks are concentrated as the ZiG experiment evolves.

Verī doesn’t decide whether ZiG will ultimately succeed or fail.

It helps ensure that, whichever way the story goes, institutions and trustees can see clearly what it means for their clients and members – in real, inflation-adjusted terms.

Zimbabwe’s 6.6% growth forecast, falling inflation and tighter money regime are not illusions. They mark a real, if fragile, improvement after years of extreme volatility.

But they sit on top of unresolved debt distress, a still-contested currency architecture and deep scars in public trust.

Whether 2025 is remembered as the year Zimbabwe finally turned the corner – or simply turned the page on one more chapter of experimentation – will depend on two things:

• The consistency and credibility of policy; and

• The ability of investors, both local and regional, to measure, manage and diversify the risks that remain.

---

#Zimbabwe #ZiG #africafinance #inflation #debtDistress #monetarypolicy #pensionfunds #banking #currencyrisk #VeriPlatform

---