World Banks Warns Zim Against Rapid De-dollarisation

Zimbabwe’s plans to phase out the US dollar and move towards a single-currency economy by 2030 have come under scrutiny, with the World Bank warning that a premature shift could destabilise the economy.

The World Bank has cautioned Zimbabwe against moving too quickly to eliminate the use of foreign currencies, saying the country must first build strong public confidence in its gold-backed Zimbabwe Gold (ZiG) currency.

According to the global lender, forcing an immediate transition away from the US dollar could trigger capital flight, widen the gap between official and parallel-market exchange rates and reverse some of the economic stabilisation gains achieved in recent years.

“The government’s goal of transitioning to a mono-currency ZiG system carries a risk of premature de-dollarisation,” the World Bank said.

The lender warned that attempting to force the transition before the local currency has gained sufficient credibility could undermine confidence and encourage businesses and individuals to move their money out of the country or turn to informal markets.

Zimbabwe has set 2030 as the target year for ending the use of foreign currencies in domestic transactions and relying primarily on the ZiG.

The plan represents a major shift for an economy that has relied heavily on the US dollar, particularly after years of currency instability and high inflation.

ZiG at the centre of the transition

The Reserve Bank of Zimbabwe introduced the Zimbabwe Gold (ZiG) in April 2024 as part of efforts to restore monetary stability and reduce the volatility associated with the local currency.

The currency is backed by a combination of foreign-currency reserves and precious-metal reserves, with the central bank positioning it as a more stable alternative to previous iterations of Zimbabwe’s currency.

In 2026, the Reserve Bank introduced redesigned ZiG banknotes, including ZiG10, ZiG20 and ZiG50 denominations. The notes feature images of Africa’s Big Five wildlife, giving the currency a distinct national identity.

However, the World Bank's latest warning highlights the central challenge facing the government: currency reform depends not only on policy, but also on public trust.

For Zimbabwe to successfully move towards a mono-currency system, confidence in the ZiG will need to be strong enough for households, businesses and investors to willingly hold and use it.

Debt restructuring offers another opportunity

Despite its concerns over the pace of de-dollarisation, the World Bank also pointed to potential opportunities for Zimbabwe as it works to resolve its longstanding debt problems.

Zimbabwe has been largely shut out of international debt markets since defaulting on its obligations in 1999. Efforts are now underway to restructure the country's billions of dollars in external debt and clear longstanding arrears.

France and the United Kingdom have agreed to co-chair a platform supporting Zimbabwe's debt-restructuring efforts.

Additional reporting from Business Insider Africa.