Zimbabwe has lost over $3 billion in potential revenue due to exchange rate distortions, highlighting the costs of an unstable currency. The introduction of the Zimbabwe Gold (ZiG) currency has not solved the country’s currency woes, with the value plummeting on the parallel foreign exchange market. World Bank research, in collaboration with the Confederation of Zimbabwe Industries, reveals that the government incurred significant losses due to mishandling of the exchange rate.
Eddie Cross, an economist and advisor to President Emmerson Mnangagwa, warns of impending company closures and food shortages if decisive action is not taken. The high inflation, multiple exchange rates, and unsustainable debt levels in Zimbabwe have hindered economic productivity and encouraged informality. The Zimbabwe National Chamber of Commerce CEO emphasizes the need for urgent government intervention to stabilize the currency.
Amidst other economic challenges, the de-dollarization process and infrastructure development play a crucial role in Zimbabwe’s economic stability. Economists caution that de-dollarization may be difficult for countries that have dollarized in the past. Despite the challenges, Zimbabwe aims to make the ZiG the sole currency by 2030.
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