Harare – Zimbabwe’s economy has experienced notable growth in recent years despite ongoing currency fluctuations, according to Finance, Economic Development, and Investment Promotion Minister, Professor Mthuli Ncube.
Speaking at a media briefing in Harare on Tuesday, following the signing of a €75 million financing agreement with the European Union, Prof. Ncube highlighted that the country’s economic resilience has resulted in an average growth rate of 6.8% over the last three years.
Addressing concerns over the volatility of the Zimbabwe Gold (ZiG) currency introduced earlier this year, Prof. Ncube argued that the depreciation of the domestic currency has provided unexpected benefits. “The currency volatility hasn’t hindered economic growth. In fact, a weaker domestic currency has, in some cases, offered advantages by boosting export competitiveness,” he noted. The minister attributed this year’s slower growth rate of 2% primarily to climate change impacts rather than currency issues, adding that the economy is projected to grow by 6% in 2025, positioning Zimbabwe among the fastest-growing economies in Southern Africa.
The Reserve Bank of Zimbabwe (RBZ) recently devalued the ZiG currency from 13.99 ZiG to 24.5 ZiG per US dollar, a move that has sparked public debate on currency stability and purchasing power. Prof. Ncube acknowledged the mixed effects of a weaker currency, recognising that while it enhances the competitiveness of Zimbabwean goods in global markets, it also leads to price increases and potential wage erosion.
“There are disadvantages, such as rising prices and the erosion of wages due to the depreciation. This is why it’s essential to manage these effects carefully,” he said, adding that the government is working to mitigate wage erosion by adjusting civil servant salaries to support livelihoods in a fluctuating economy.
Prof. Ncube also reaffirmed the government’s stance against dollarisation, emphasising the importance of maintaining control over monetary policy. “Reverting to dollarisation would strip us of the ability to implement independent monetary policies,” he said, urging Zimbabweans to remain optimistic about the ZiG currency and the broader economic outlook.
With the EU’s recent funding support, Zimbabwe aims to channel resources into sustainable development projects and continue efforts to stabilise its currency. The funding will contribute to infrastructure projects and other areas critical to economic stability, according to the Finance Ministry.
As Zimbabwe navigates its economic trajectory amid external pressures and currency fluctuations, the government’s commitment to domestic currency stability and growth-focused policies remains a cornerstone of its fiscal strategy.
Source: Herald
