Zimbabwe's ZiG Payment Deal Puts Control in Question

On 27 September 2024, Zimbabwe devalued the ZiG by 43%, from 13.9 to 24.4 ZiG per U.S. dollar. The currency was required for some company taxes and most government services, and traders who refused it faced fines. That official pressure didn’t produce widespread voluntary use: people remained concerned the government could create more ZiG than the economy needed to fund spending.

Now the central bank is negotiating with NPCI International Payments, the overseas arm of the body that runs the instant-payment system behind most digital payments in India. The proposed real-time payment system could make the gold-backed ZiG easier and cheaper to use alongside the U.S. dollar. The agreement’s terms haven’t been made public.

Who controls the payment rails

Jonathan Munemo, Professor of Economics at Salisbury University, says the purpose should be to encourage wider use of the local currency, not use technology to force it. The system is intended to lower payment costs, speed transfers between bank and mobile-money accounts, and let people pay for small purchases directly from accounts instead of using cards. Cross-border payments and remittance links could follow.

The central question, Munemo wrote, is who controls the system once it starts operating. He says Zimbabwean institutions should retain control of operations and transaction data, people should have a meaningful choice between ZiG and dollars, and the central bank’s management of money and interest rates must remain credible. Payment systems, like supply chains, energy and minerals, can also be vulnerable to deliberate weaponization by other nations for geopolitical reasons.

Licensing payment technology from abroad isn’t unusual. Namibia, Peru and Trinidad and Tobago have partnered with NPCI International. In Namibia, Instant Payment Namibia operates under the Bank of Namibia, with NPCI International as its technology partner. Pilot testing finished in June 2026, and a phased rollout is underway, starting with government payments such as social grants. It isn’t yet a nationwide consumer service, so its longer-term effects remain to be seen.

A currency burdened by its record

Zimbabwe’s history includes repeated episodes in which local money rapidly lost value, prices rose sharply and savings were wiped out. Falling production, funding shortfalls and money creation to finance government spending contributed to rising prices and declining confidence. Inflation reached 231 million percent in 2008, and the Zimbabwe dollar was abandoned the following year.

Bond notes introduced in 2016 were presented as equivalent to U.S. dollars but failed to maintain that exchange rate. In 2019, foreign-currency bank balances were converted into a new local currency, which later lost value as inflation exceeded 500% in 2020. The ZiG, launched in April 2024, is the latest attempt to establish a stable national currency.

Munemo says the government repeatedly spent more than it collected in taxes and covered the gap by printing money, undermining confidence in both the currency and the central bank. Many people and businesses turned to U.S. dollars to protect savings and plan transactions. A payment app can make a currency more convenient; it can’t create trust on its own, he argues.

Numbers aren’t the same as confidence

Annual ZiG inflation fell to 2.9% in August 2026 before rising to 3.7% in September. Annual U.S.-dollar inflation rose from 3.1% to 3.46% over the same period. Munemo says several months of low inflation aren’t enough to establish lasting confidence. Foreign reserves stood at about US$2 billion at the end of September, roughly two months of import cover and below the Reserve Bank’s target of three to six months. Most deposits remained in U.S. dollars.

The Reserve Bank has abandoned its target of moving to a single currency by 2030 in favor of a conditions-based approach. In July 2026, the governor said the transition to exclusive ZiG use for domestic transactions “is not date-based but is dependent on the achievement of the conditions precedent.” The Bank also ruled out forcibly converting U.S.-dollar savings into ZiG. The 2026 budget lowered the tax on electronic ZiG transfers from 2% to 1.5%, while keeping the tax on foreign-currency transfers at 2%.

Cambodia offers another example: its Bakong payment system, launched in 2020 by the National Bank of Cambodia with a Japanese technology partner, supports transactions in both U.S. dollars and the Khmer riel. The central bank’s 2024 annual report recorded local-currency transfers and payments through Bakong at roughly 49%. Munemo calls for regular digital-payment data from Zimbabwe’s Reserve Bank to show whether the system makes the local currency more useful in everyday life. Whether the proposed rails earn confidence will depend not just on how quickly money moves, but on who holds the controls and whether people can choose what money they use.