ZiG Transactions Rise to 43% as RBZ Targets Long-Term Capital Formation

By Staff Reporter

HARARE — The use of Zimbabwe Gold (ZiG) across payment platforms has risen to about 43 percent, with the Reserve Bank of Zimbabwe (RBZ) saying the increased adoption could eventually help strengthen savings, investment and bank lending.

RBZ Deputy Governor Dr Innocent Matshe disclosed the latest figures while addressing delegates at the Zimbabwe Tripartite Negotiating Forum Global Summit in Victoria Falls.
Matshe said the growth in ZiG transactions was encouraging, but acknowledged that increased use of the currency had not yet translated into significant long-term capital formation.

He said the central bank's nationwide awareness campaign had helped increase the use of ZiG across payment platforms.

“We have seen that the use of ZiG transactions on all platforms has risen to about 43 percent. This is positive, but it’s yet to translate to being long-term capital.”

The ZiG was introduced in April 2024 as Zimbabwe's structured local currency, backed by foreign-currency reserves, precious metals including gold, and other valuable assets.

Matshe said banks were gradually shifting from traditional savings mobilisation towards capital formation, a process he said would take time.

“We accept that, but these things take time. This will not happen overnight,” he said.

The RBZ has also noted a decline of between **three and five percentage points in the loans-to-deposit ratio, while non-convertible debentures have increased as banks adjust to the changing monetary environment.

Matshe said the decline in the loans-to-deposit ratio was not currently a concern for the central bank, describing it as part of the transition taking place in the economy.

He said the expectation was that banks would eventually increase lending as the financial system adjusted and more funds became available for medium- and long-term financing.

The shift is significant for productive sectors such as agriculture, mining and manufacturing, which require longer-term financing for expansion, equipment purchases and other investments.

The RBZ's immediate challenge is therefore to ensure that increased ZiG usage moves beyond day-to-day payments and translates into savings, deposits, credit and investment.

The latest 43 percent figure refers to transactions across formal payment platforms and should not necessarily be interpreted as meaning that ZiG accounts for 43 percent of every transaction in Zimbabwe's wider economy. )

Matshe said the central bank remained confident that continued adoption of the local currency would eventually strengthen the country's financial system and improve the availability of capital for productive economic activity.
Source: Zimpapers