Zimbabwe’s local currency, the ZiG, was supposed to bring stability to the economy. Backed by gold and foreign currency reserves, ZiG was seen as the answer to many of the country’s economic problems. However, instead of creating stability, it has become a major issue. The value of ZiG has been falling rapidly, and businesses, especially retailers, are now facing possible closure. The currency has caused increased economic instability, and the future of the Zimbabwean economy looks uncertain.

Retailers are worried about their future. They are now dealing with the effects of the declining ZiG in a market that is already struggling with inflation, high interest rates, and economic instability. With the economy already weak, the instability brought by ZiG is making things worse. Retailers fear they may not survive this crisis.

One of the biggest problems is the difference between the official exchange rate and the parallel market rate. Officially, 1 US dollar is worth 13.8 ZiG, but on the black market, 1 US dollar can get you 30 ZiG. This creates confusion and allows some people to take advantage of the situation. This difference in rates has led to even more inflation, as businesses struggle to set prices.

ZiG was introduced in April, but it has already lost 49% of its value. Official inflation is said to be 3.7%, but independent economists believe it is closer to 800%, making it the highest in the world. The amount of money in circulation has increased by 283% annually, but people are still not spending. This shows that people don’t trust the currency and are holding on to their money instead of spending it.

The authorities tried to limit the amount of money in circulation to protect the value of ZiG, but this has only made things worse. The ZiG notes are hard to find, meaning the US dollar is still the most used currency in Zimbabwe. President Emmerson Mnangagwa has said he wants to stop using the US dollar, but it is clear that the ZiG is not stable enough to stand on its own.

Mnangagwa has allowed foreign currencies to be used until 2030, but the ZiG still causes problems. The Reserve Bank of Zimbabwe (RBZ), led by John Mushayavanhu, has tried to manage the economy and currency, but this has only led to more issues. Micromanaging the currency and money supply has caused confusion and led to even more problems, such as inefficiency in the economy and resource mismanagement.

Because of this micromanagement, inflation has become unpredictable, and businesses are unsure about the future. Retailers, in particular, are feeling the pressure, and many are sounding the alarm. If things don’t change, many may be forced to close their doors.

The RBZ should stop trying to micromanage the economy. Instead, it should adopt policies that are predictable and based on clear rules. This would help businesses plan better and reduce the current chaos in the market. Retailers have already asked the government to step in and fix the situation before it’s too late.

While the authorities claim ZiG has stabilized the currency, businesses see it differently. Retailers argue that ZiG has made things worse, not better. The formal retail sector is being hit the hardest, as they are forced to use the official exchange rate. This makes their goods more expensive than those sold on the black market, causing them to lose customers. Large companies like OK Zimbabwe, PicknPay, and SPAR are all at risk of collapse.

The only solution, according to analysts, is structural reform. Without fixing the real problems—poor leadership and bad governance—there is no hope for the economy. Corruption continues to be a major issue, and without dealing with this, the economy will continue to suffer. Structural reforms are necessary to improve the business environment, strengthen economic governance, and reduce corruption.

Finally, Zimbabwe must re-engage with the international community. The country is heavily in debt and needs external financing to survive. But with the US pulling out of talks, Zimbabwe remains isolated. Without resolving its debt and accessing new funding, the future of Zimbabwe’s economy remains bleak.