Mthuli Ncube Defends ZiG-Only Payment Policy
Finance Minister Mthuli Ncube has defended the Government’s decision to pay local suppliers exclusively in ZiG, arguing that the move will increase demand for the domestic currency and support its stability.
Speaking at a post-Cabinet briefing in Harare, Ncube said the approach is based on economic fundamentals, where increased demand for a currency can drive its appreciation, countering fears of potential depreciation.
Also Read: RBZ Moves To Calm Fears Over Government Plan To Pay Suppliers In ZiG
Fears of Instability Dismissed
The new directive has sparked debate, with some stakeholders worried it could fuel exchange rate pressures if businesses rush to convert ZiG into foreign currency.
However, Ncube dismissed these concerns, saying such outcomes are not inevitable. He explained that if liquidity remains controlled, increased demand for ZiG could instead drive the currency to firm rather than weaken.
Tight Liquidity Measures in Place
To support the policy, authorities say they are actively managing money supply to avoid excess liquidity in the market.
Ncube pointed to a range of tools being used to absorb surplus funds, including Negotiable Certificates of Deposits and interest rate adjustments. These measures are meant to keep the amount of ZiG in circulation in check while reinforcing its value.
Crackdown on Supplier Overpricing
The introduction of ZiG-only payments is also tied to a broader effort to address inflated pricing in government procurement.
According to the minister, authorities carried out cost assessments on commonly supplied goods and services before introducing a standard pricing framework. This system sets acceptable price ranges, with any quotations exceeding those limits rejected through the government’s procurement platform.
Foreign Currency Access Remains Open
While local suppliers will be paid in ZiG, the Government has clarified that foreign currency will still be used for imports where necessary.
Businesses requiring foreign exchange can access it through formal banking channels, backed by the country’s reserves. Ncube said Zimbabwe holds sufficient reserves, including gold and hard currency, to meet demand for imports.
Push for Efficiency and Stability
The reforms are aimed at improving discipline in public spending while ensuring that suppliers are paid on time and within reasonable price limits.
At the same time, the Government sees the increased use of ZiG in domestic transactions as a key step toward strengthening the local currency and maintaining broader economic stability.
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The post Mthuli Ncube Defends ZiG-Only Supplier Policy, Says Currency Will Strengthen appeared first on iHarare News.
