Zimbabwe Directs All Payments To local suppliers Solely Via local Currency,

By Ross Moyo

Zimbabwe’s government has mandated that all local suppliers be paid exclusively in the domestic currency, the Zimbabwe Gold (ZiG). The move aims to entrench the use of the local currency and tighten control over public spending.

The government has introduced a National Standard Price List (NSPL) to set reference prices for commonly procured goods and services. The NSPL will apply to all government ministries, departments, and agencies.

“The Government of Zimbabwe will lead in the use of the local currency, and as a result, payments to local suppliers will be made solely in the local currency,” Minister of Finance Mthuli Ncube said.

The move is part of broader public financial management reforms, including the rollout of an electronic Government Procurement (e-GP) system. The government has also signalled that preference would now be given to domestically produced goods and services.

The introduction of the NSPL and the e-GP system is expected to enhance transparency and achieve cost savings in public procurement. However, some have expressed concerns about the impact on businesses.

The government’s mandate is expected to boost confidence in the ZiG, but it remains to be seen how it will affect the economy. The Reserve Bank of Zimbabwe is preparing to introduce new ZiG banknotes into circulation.

The move is seen as a critical test of the government’s commitment to reducing dollarisation. The bulk of transactions in the economy, particularly in the informal sector, are still conducted in US dollars.

The government’s decision has sparked debate, with some arguing that it will promote local currency use, while others say it will lead to economic instability.

The government is pushing ahead with its plans to promote the use of the local currency, despite challenges in the economy.