US Dollar- The Confederation of Zimbabwe Industries (CZI) has urged the Reserve Bank of Zimbabwe (RBZ) to move beyond verbal commitments and formally enshrine its de-dollarisation policy through binding legal instruments, warning that business confidence and investment prospects remain fragile without clear guarantees.
The call, delivered during submissions to the Ministry of Industry and Commerce at an engagement meeting with Business Member Organisations this week, reflects deep-seated concerns over the lingering effects of the 2019 currency reforms that blindsided many companies.
In June 2019, Statutory Instrument 142 abolished the multi-currency system and declared the RTGS dollar as the sole legal tender. This move forcibly converted United States dollar balances into the local currency at a 1:1 rate, eroding savings, contracts, and obligations almost overnight.
The shock not only disrupted business planning but also triggered widespread mistrust of monetary authorities. Many firms and individuals saw years of accumulated value wiped out, and to this day, memories of that policy shift continue to shape perceptions of risk in the economy.
CZI insists that verbal assurances are not enough to reverse that trust deficit. “Clear legal instruments will provide certainty and build trust with industry and investors,” the organisation said.
The business body outlined three areas where protection is needed: preservation of US dollar balances, safeguarding US dollar-denominated obligations, and guaranteeing monetary stability. Without legal backing, CZI warned, assurances could be rolled back in the same way 2019’s reforms unfolded, leaving businesses vulnerable once again.
CZI Presses RBZ to Formalise De-Dollarisation Policy Through Legal Instruments
Government has repeatedly stated that the current multi-currency system will remain in place until 2030, and the RBZ has hinted at a formal de-dollarisation roadmap to be included under the upcoming National Development Strategy 2 (NDS2).
However, industry leaders argue that such plans require legal reinforcement if they are to be believed and relied upon. According to CZI, predictability and a stable operating environment are the bedrock of industrial recovery, and only a legally binding framework can provide that level of certainty.
“The industry’s position is that a clear and legally binding framework is the only way to provide long-term predictability and rebuild the trust essential for economic growth,” CZI noted.
Beyond monetary policy, CZI highlighted another urgent issue undermining confidence: the Government’s unsettled domestic debt to private sector players. Outstanding arrears include unpaid obligations to contractors and maturing Treasury Bills, which the industry group says are crippling some firms.
“There is an urgent need for structured dialogue between the Government and the private sector to address the outstanding domestic debt owed by the Government. The scale of the arrears is significant, with some debts posing existential risks to companies,” CZI said in its submissions.
The lobby suggested that the authorities develop a clear roadmap for debt clearance, either by prioritising older arrears or firms operating in critical economic sectors. A transparent repayment plan, they argued, would restore credibility and help companies stabilise their operations.
CZI also called for adjustments to currency and tax policies that it says are stifling competitiveness. Chief among them is the 30 percent foreign currency surrender requirement, which forces exporters to liquidate nearly a third of their foreign earnings at official exchange rates.
With manufactured exports showing signs of decline, the industry body wants the surrender ratio lowered to ease pressure on companies and allow them to reinvest more of their hard-earned forex.
Additionally, CZI proposed that the Intermediate Money Transfer Tax (IMTT) be made tax-deductible for businesses. Currently, the tax adds to the burden on the formal economy, where compliance costs are already high. Making it deductible would help shift some of the strain away from productive enterprises.
Looking ahead, CZI also weighed in on the draft Zimbabwe National Industrial Development Policy II (2026–2030), which is set to guide the country’s industrialisation strategy over the next five years.
The business organisation insisted the policy must undergo a rigorous “stress test” before adoption to ensure it is technically robust and capable of delivering measurable results.
“The draft Zimbabwe National Industrial Development Policy II (2026–2030) must undergo a rigorous technical validation process,” CZI argued. “This ‘stress test’ is necessary to assess whether the framework is robust enough to achieve its structural transformation objectives. Given that five years is a significant time horizon, policy measures must translate into tangible industrialisation outcomes.”
For Zimbabwean businesses, predictability remains the most precious commodity. The scars of 2019 serve as a reminder that sudden policy reversals can devastate entire industries. By pushing for legal protection of de-dollarisation commitments, debt repayment plans, and fairer taxation, CZI hopes to foster an environment where firms can plan, invest, and grow with confidence.
Whether policymakers respond with binding frameworks or continue relying on verbal assurances will determine if Zimbabwe’s private sector can truly regain the trust it lost—and with it, the confidence needed to drive long-term economic growth.
Source- Herald
