RBZ Mandates ZiG Payments for Public Sector Suppliers

The Reserve Bank of Zimbabwe (RBZ) announced that all public sector suppliers and contractors will now be paid exclusively in the new local currency, ZiG. This policy aims to strengthen domestic currency demand and improve fiscal discipline, seeking to stabilize the ZiG. RBZ governor John Mushayavanhu welcomed the initiative as promoting ZiG usage. However, businesses and contractors express concerns, fearing restricted foreign currency access will complicate operations for inputs requiring hard currency, potentially disrupting supply chains. The policy directly impacts public procurement systems, forcing a transition for all government contracts. Its implementation faces resistance from suppliers concerned about forex availability. Bottom Line: This mandate represents an RBZ attempt to control currency stability and reconfigure economic leverage within public procurement.