Tinotenda Hove – The Government of Zimbabwe has taken a decisive step toward reducing reliance on the United States dollar in public transactions, with Finance Minister Mthuli Ncube announcing that all local suppliers and contractors working with the State will now be paid exclusively in the country’s local currency, the Zimbabwe Gold (ZiG).

The move forms part of broader government efforts to strengthen the local currency and stabilise the economy by limiting the dominance of foreign currencies in domestic financial activities.

Speaking on the policy shift, Ncube said the new directive means government procurement payments to local companies will no longer be made in foreign currency.

“This measure is aimed at promoting the use of ZiG in the economy and supporting the de-dollarisation agenda,” the minister said.

Under the new arrangement, businesses that supply goods and services to government ministries, departments, and agencies will receive payments strictly in ZiG.

Authorities believe the policy will increase demand for the local currency and help restore confidence in it.

The government has for years struggled with widespread dollarisation, where many transactions in the country are conducted in US dollars due to past episodes of hyperinflation and currency instability.

Economic analysts say the success of the policy will depend largely on whether the ZiG maintains stability and purchasing power. If the currency remains stable, the policy could gradually reduce dependence on foreign currencies in public procurement and other sectors of the economy.

However, some suppliers have previously raised concerns about payment arrangements in local currency, citing exchange rate fluctuations and rising operational costs.

Despite these concerns, Treasury officials insist the shift is necessary to strengthen the monetary system and ensure the local currency plays a central role in Zimbabwe’s economy.