Zimbabwe’s Golden Gamble: Can ZiG and a Gold Boom Finally Tame Inflation?
- Derry Thornalley
- 5 hours ago
- 5 min read
On a busy street in central Harare, shopkeepers still quote prices in both U.S. dollars and the Zimbabwe Gold (ZiG) – but the tone of the conversation has shifted. After years of relentless price surges, inflation has suddenly fallen hard, dropping from 82.7% in September to 32.7% in October 2025, its lowest level in nearly two years.
Business groups and policymakers say this is no accident. A new, partly gold-backed currency, firmer monetary policy and an unexpected gold production boom have combined to cool what was once one of the world’s hottest inflation rates. A recent report by the Confederation of Zimbabwe Industries projects inflation could ease further to 15–20% by year-end, assuming the ZiG stays broadly stable.
For a country defined for decades by currency crises, the question is simple but profound: is this a turning point, or just another pause before the next storm?
A new currency with an old problem
The ZiG was launched in April 2024 as Zimbabwe’s latest attempt to restore monetary sovereignty after a string of failed currencies and a long reliance on the U.S. dollar. It is notionally backed by a mix of gold and foreign-currency reserves and was sold to the public as a more credible unit of account.
In practice, the economy remains heavily dollarised. The IMF notes that most transactions are still conducted in U.S. dollars, even though businesses are legally required to accept ZiG, and that the authorities’ ambition is to return to a single-currency, ZiG-only regime by 2030.
External partners have offered cautious encouragement. In its 2025 Article IV assessment, the IMF praised tighter monetary policy and the curbing of direct central bank financing, which helped cool inflation and narrow the gap between official and parallel exchange rates. But it also warned that Zimbabwe still lacks a clear, detailed roadmap for de-dollarisation – from the treatment of USD and ZiG bank deposits to export surrender requirements.
Gold: from hedge to policy anchor
What is different this time is the scale of Zimbabwe’s gold story.
After posting a record 49 tonnes of gold output in 2024, making it one of Africa’s leading producers, the country is on track to match or exceed that performance in 2025.Data for the first eight months of the year show total output of 28,498 tonnes versus 20,103 tonnes over the same period in 2024, a jump of more than 40% that has put the government firmly on course to hit its 40-tonne annual target.
Revenues have followed. Official statistics show mining takings smashing successive records in late 2024 and mid-2025 as international gold prices climbed to all-time highs, providing a vital source of export earnings and tax revenue.
The Reserve Bank has leaned heavily on this boom. Part of the ZiG’s credibility rests on gold and FX reserves held by the central bank, allowing it to claim that every unit of currency in circulation is backed by tangible assets. Analysts say that, together with sharply higher interest rates – the policy rate has been kept at 35% – this has helped stabilise the exchange rate and crush month-on-month price growth.
One external estimate suggests inflation has fallen from over 175% in early 2024 to below 20% by mid-2025, before the latest October drop.
Stability… but at what cost?
For now, the headline numbers look good. But beneath them lie several fault lines.
Dollarisation persists. IMF officials stress that, despite lower inflation, Zimbabwe remains “highly dollarised,” with households and firms continuing to treat USD as the safer store of value.
Debt overhang. The country still owes around US$12.2 billion in arrears to multilateral and bilateral creditors, preventing it from accessing fresh IMF financing and forcing it to rely on expensive, short-term arrangements instead.
Gold dependence. A sustained drop in gold prices, or disruptions to production, would immediately weaken both the balance of payments and the perceived backing for the ZiG.
Domestically, critics question whether the current disinflation is as much about “financial repression” – high rates, tight liquidity and administrative controls – as it is about structural reform. Business groups, while welcoming price stability, complain of steep borrowing costs and limited access to credit.
In short, the gamble is working for now, but remains fragile.
Where Verī fits into Zimbabwe’s new macro story
Against this backdrop, regulated institutions in Zimbabwe – banks, asset managers, pension funds and insurers – face a complex balancing act:
They must hold meaningful exposure to the local economy, denominated in ZiG, to support clients and satisfy regulators.
They also need diversified access to hard-currency assets – across Africa and globally – to hedge currency risk, smooth returns and bolster long-term performance.
Verī Platform is built precisely for this kind of environment. Operating behind regulated institutions rather than in front of retail investors, it provides:
A single, regulated technology layer through which Zimbabwean firms can access local, regional and international markets;
Integration with multiple custodians so that ZiG assets, USD positions and offshore holdings can all be seen, reconciled and reported in one place;
Transparent, regulator-friendly audit trails – giving bodies such as the RBZ and capital-markets regulators full line-of-sight into exposures, flows and FX usage without constraining innovation.
In practical terms, a Zimbabwean asset manager or pension fund could use Verī to construct portfolios that combine ZiG-denominated government bonds, local equities, pan-African strategies and global hard-currency funds, all wrapped in reporting that satisfies local oversight.
As Zimbabwe experiments with a gold-backed currency while still deeply entangled with the dollar, that kind of structured, cross-border architecture may become less of a luxury and more of a necessity.
Can the golden run last?
Whether Zimbabwe’s latest anti-inflation drive succeeds where previous efforts failed will depend on forces both inside and outside Harare’s control.
If gold prices remain elevated, the central bank keeps to its promise of fiscal and monetary discipline, and the authorities provide real clarity on how they will transition from a multi-currency system to a ZiG-only regime by 2030, the current stability could harden into confidence.
If not – if gold falters, parallel markets widen again, or debt talks stall – Zimbabwe could find itself back where it started: with a nervous public, a discredited currency and reforms on pause.
For now, though, the numbers are moving in the right direction. Inflation is falling, the ZiG is holding its line better than skeptics expected, and the country’s mines are pouring more gold than ever from its red earth. It is a golden moment for Zimbabwe’s policy-makers – and one they can’t afford to waste.
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