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Zimbabwe's prophet of doom speaks on de-dollarisation
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Confederation of Zimbabwe Industries (CZI) chief economist Cornelius Dube has warned that Zimbabwe risks massive capital flight if government presses ahead with de-dollarisation before ZiG transactions dominate the market.
Speaking on Wednesday at the Zimbabwe Economic Development Conference (Zedcon) 2025 in Bulawayo, Dube said the economy remains heavily reliant on the United States dollar, with billions circulating in both the formal and informal sectors.
Official estimates show the informal economy generates about US$14,2 billion annually, while the formal sector holds an equivalent of US$3,85 billion, of which only 70% to 80% is actual foreign currency.
The government has announced plans to phase out the US dollar, a move widely rejected by the market, which still remembers the failed de-dollarisation attempt of 2019–2020 that collapsed under the weight of COVID-19 disruptions. Analysts, businesses and investors have consistently urged a cautious, phased approach.
Dube stressed that any de-dollarisation programme must be carefully sequenced and anchored on solid economic fundamentals.
"It needs to have timeframe milestones. In other words, it is a journey," he said. "We need specific indicators to track progress and make revisions. Most importantly, there should be an anchored implementation. That requires building reserves to support a market-driven approach."
He cautioned against attempting to eliminate the US dollar from savings too quickly, warning this would trigger scepticism and capital flight.
"This economy is awash with dollars … We cannot just wash them away overnight," he said. "By at least 2030, let's aim for ZiG transactions dominating. If we target transaction de-dollarisation as a quick win, we can then gradually shift towards savings in the long term, causing minimal disruption."
This year's Zedcon, organised by the Finance, Economic Development and Investment Promotion ministry, is running under a theme focused on sustainable policies and support for key sectors such as agriculture, mining and manufacturing.
Adding her voice, Professor Charlotte Buitendag of the Thabo Mbeki African School of Public & International Affairs and a non-executive director at the South African Reserve Bank, urged policymakers to embrace evidence-based decision-making.
"Numbers and sophisticated economic metrics are there to support us," she said. "But if we cannot use them to inspire policymakers to act, then it's nothing. Evidence-based policy is not a nicety, but a necessity, especially where Zimbabwe is at this very exciting stage of its development."
Speaking on Wednesday at the Zimbabwe Economic Development Conference (Zedcon) 2025 in Bulawayo, Dube said the economy remains heavily reliant on the United States dollar, with billions circulating in both the formal and informal sectors.
Official estimates show the informal economy generates about US$14,2 billion annually, while the formal sector holds an equivalent of US$3,85 billion, of which only 70% to 80% is actual foreign currency.
The government has announced plans to phase out the US dollar, a move widely rejected by the market, which still remembers the failed de-dollarisation attempt of 2019–2020 that collapsed under the weight of COVID-19 disruptions. Analysts, businesses and investors have consistently urged a cautious, phased approach.
Dube stressed that any de-dollarisation programme must be carefully sequenced and anchored on solid economic fundamentals.
"It needs to have timeframe milestones. In other words, it is a journey," he said. "We need specific indicators to track progress and make revisions. Most importantly, there should be an anchored implementation. That requires building reserves to support a market-driven approach."
He cautioned against attempting to eliminate the US dollar from savings too quickly, warning this would trigger scepticism and capital flight.
"This economy is awash with dollars … We cannot just wash them away overnight," he said. "By at least 2030, let's aim for ZiG transactions dominating. If we target transaction de-dollarisation as a quick win, we can then gradually shift towards savings in the long term, causing minimal disruption."
This year's Zedcon, organised by the Finance, Economic Development and Investment Promotion ministry, is running under a theme focused on sustainable policies and support for key sectors such as agriculture, mining and manufacturing.
Adding her voice, Professor Charlotte Buitendag of the Thabo Mbeki African School of Public & International Affairs and a non-executive director at the South African Reserve Bank, urged policymakers to embrace evidence-based decision-making.
"Numbers and sophisticated economic metrics are there to support us," she said. "But if we cannot use them to inspire policymakers to act, then it's nothing. Evidence-based policy is not a nicety, but a necessity, especially where Zimbabwe is at this very exciting stage of its development."
Source - online
