Mnangagwa's 6% growth boast rings hollow

While President Emmerson Mnangagwa's government has been celebrating a projected 6% economic growth rate for 2025, analysts say the figure is largely meaningless in real terms and masks the administration's continued failure to resolve Zimbabwe's deep-seated currency crisis.

The growth, described by economists as "from a low base," translates to roughly US$1 billion in additional production - a negligible increase given the scale of Zimbabwe's economic challenges. More importantly, it comes amid a near-collapse of the Zimbabwe Gold (ZiG) currency, which was introduced with fanfare in April 2024 but is now described by analysts as "virtually extinct."

Despite the government's claim of economic stability, the country remains trapped in a highly dollarised system where the US dollar dominates all transactions, pricing, and salaries.

According to the latest International Monetary Fund (IMF) Article IV Consultation report, ZiG constitutes just 17% of the country's total money supply, with prices "rarely quoted" in the local currency. "Salaries and goods and services transactions are typically either fully or partially paid in US dollars," the IMF noted.

The report further highlights that government attempts to enforce use of the official Willing-Buyer Willing-Seller (WBWS) exchange rate through Statutory Instrument 81A of 2024 backfired - driving up dollarisation and informality before being repealed in May 2025.

Despite these failures, authorities insist they will transition to a "mono-currency system" by 2030, with ZiG as the sole legal tender. But the IMF warns that the lack of clarity on how this transition will affect existing foreign currency deposits has increased uncertainty and weighed heavily on the financial sector.

Investment firm Imara Asset Management echoed similar concerns, describing ZiG as "largely irrelevant" due to its extreme scarcity and low public confidence. "There is so little ZiG around that it has become relatively extinct as a transactional currency," the firm said in its latest report.

American economist Professor Steve Hanke estimates that ZiG has lost about 33% of its value year-on-year and now ranks as the fifth worst-performing currency globally.

Analysts argue that the central bank's tight monetary policy - including refusal to extend overdraft facilities to government - has created artificial stability but stifled liquidity and economic activity.

They also warn that reintroducing the Zimdollar as a sole currency without addressing structural weaknesses and governance failures would be "economic suicide."

"The Mnangagwa administration may boast of growth, but without currency sovereignty and trust in its monetary system, Zimbabwe cannot claim genuine recovery," said one Harare-based economist. "Growth on paper means nothing when citizens still transact, save, and think in US dollars."

After seven years in power, Mnangagwa's government remains haunted by the same currency ghosts that have plagued Zimbabwe for two decades - eroding confidence, fuelling inequality, and undermining any claims of sustainable growth.