Exchange rate gap narrows, productivity set to soar

CLOUDINE MATOLA

The Zimbabwe Building Contractors Association (ZBCA) says it expects the gap between the official and unofficial exchange rates to continue narrowing, a development it believes will allow businesses to shift focus from currency instability to operational productivity, Business Times can report.

Speaking on the sidelines of the State of the Economy and 2026 Economic Outlook breakfast meeting held in Harare on Thursday last week, ZBCA president and Zim Build chief executive officer, Dr Tinashe Manzungu, said the convergence of the parallel market and official exchange rates could significantly boost productivity in the construction industry.

“Of course, yes, the power market, the unofficial market and also probably the official market. Yeah, they seem to be also drawing close to a direction that probably we hope and trust that probably by the end of this year we should see the gap becoming smaller and smaller. Meaning to say productivity will now not be enhanced because of the parallel market exchanges or probably issues to do with currency issues, but issues to do with probably how you can provide your own productivity in your own line of industry,” Manzungu said.

He added that most businesses, particularly in the construction sector, have increasingly embraced the local currency, the Zimbabwe Gold (ZiG), reducing reliance on the United States dollar.

“If you are going to ask a serious business person right now in Zimbabwe, people are being paid in ZiG currency and they are actually using it. I come from the construction industry where this is a capital-intensive business, you really need quite a lot of amount in trading. And definitely yes, we have tried using now the ZiG currency. It itself is working. So what it actually means is we are not now fussy about looking for the US dollar when it comes to trading, save for the interest of importing goods now,” he said.

Zimbabwe recently recorded a major macroeconomic milestone, with inflation falling to 4.1% in January 2026 — the first sustained single-digit inflation outcome in nearly three decades.

Looking ahead to the upcoming monetary policy statement, Manzungu said the construction sector expects continued policy discipline, similar to that seen in 2025, arguing that it will support gold reserve accumulation, boost local production and ultimately reduce the country’s import bill.

“I think continued discipline as seen in 2025 is what is going to be key and that will then point then to the issue of continued reserves in terms of probably our own gold that we are continuously looking forward to and continuously adding. And that being the case, probably talking of a reduced import bill backed by more production that is now coming up within the lines of industry in Zimbabwe,” he said.