Nedbank urges wider ZiG access to rebuild confidence

SAMANTHA MADE

Nedbank Zimbabwe has urged the government to prioritise greater accessibility and usability of the Zimbabwe Gold (ZiG) currency, warning that persistent liquidity shortages are undermining confidence and slowing efforts to deepen economic stability.

Speaking at the 6th edition of the Zimbabwe Economic Update, Nedbank’s Executive Head of Treasury Marketing and Corporate Affairs, Latifah Kassim, acknowledged the currency’s relative stability—citing an exchange rate of 26.578 and falling inflation, but raised alarm over a growing scarcity of ZiG in the market.

“When I also look at the economy, I do see ZiG liquidity shortages. From the banking sector, I do see an inability to lend in ZiG,” Kassim said, calling for decisive steps to ease the constraints.

She stressed that boosting the currency’s availability would support businesses seeking to borrow in ZiG, adding: “If there was a way to improve on accessibility to ZiG, so that businesses that want to borrow in ZiG are able to access it easily.”

Kassim also highlighted concerns over limited tax payments in the local currency, arguing that this further erodes confidence and slows the shift towards broader ZiG adoption.

“If there was a way to allow all taxes to be paid at least in ZiG, then maybe we would see the economic agents preferring this capacity and improving that confidence,” she said.

Her remarks come as government considers policy measures compelling most taxes to be settled in ZiG, a shift Finance Minister Mthuli Ncube has justified as necessary to increase demand for the currency, reinforce its value, and anchor the de-dollarisation roadmap.

Although the Reserve Bank of Zimbabwe has moved to address scarcity concerns—reporting that ZiG usage rose to 40% in June 2025, market access and trust remain the currency’s biggest hurdles.

Kassim warned that the push to strengthen revenue collection should not come at the expense of private sector resilience, saying some tax measures risk driving companies into informality.

“When you look at the fiscal deficit, the first thing you think about is how do we improve revenue collection? The budget presented did talk about increasing certain taxes… but we do encourage policymakers to look at the balance. What does it do to industry?” she said.

To build a more sustainable tax system, she stressed the need to widen the base through formalisation, not punitive measures.

“How do we broaden that tax base? How do we formalise the informal sector to the extent possible? A lot needs to be done in making it easier to formalise, reducing the cost of doing business.”

Kassim singled out the tax on cash withdrawals as counterproductive, arguing it discourages people from banking their money at a time when authorities want to attract more deposits into the formal system.

“Your ID is now taxed on cash withdrawals, which is already above the bank fee. What does that do? Do you want to keep your money in the bank or do you want to keep it out?”

Turning to expenditure management, she urged government to strengthen procurement processes, plug leakages, and benchmark payments to avoid inflated contract values.

“Why are we paying more than we should be paying? How can we improve the tender process so that when you award a tender, it is at the right price and government is not punished by paying too much?” she said, also warning about the fiscal risks posed by delayed contractor payments.

Kassim further cautioned against abrupt cuts to the civil service wage bill without considering the social impact.

“When you look at the civil servants… should I be talking about reducing that expenditure line? What does it mean from a social perspective?” she said.

Her call reinforces growing sentiment within the financial sector that for ZiG to anchor long-term stability, government must complement monetary reforms with practical steps that build trust, widen access, and strengthen formal market activity, without choking the very businesses expected to drive growth.