The “wrecking ball” policy threatening Zimbabwe’s infrastructure sector

MICHELLE MUNYANDUKI
In this discussion, let us anchor ourselves in fact, reason, and logic.
Having taken time to analyse the Reserve Bank of Zimbabwe’s (RBZ) statement of 16 March 2026, mandating the exclusive payment of public sector contractors and suppliers in 100% ZiG, it becomes clear that the policy strays into complex legal terrain.
It raises a fundamental question: where does policy end, and where does contract law begin?
At a time when Zimbabwe’s National Development Strategy 2 (2026–2030) prioritises infrastructure financing through Public-Private Partnerships (PPPs), this policy demands deeper scrutiny. PPPs rely
on private capital, funds that is inherently sensitive to legal certainty, predictability, and the enforceability of agreements. One must therefore ask, who will invest in projects if contractual terms can be altered unilaterally at policy level, without consultation?
Contracts are not mere administrative tools, they are binding legal instruments reflecting a meeting of minds between parties.
Their sanctity is the foundation upon which investment decisions are made. If that sanctity is eroded, and if we forget the principle of pacta sunt servanda—that agreements must be honoured—we risk descending into a precarious environment where executive policy overrides negotiated obligations.
Zimbabwe’s own jurisprudence underscores this principle. In Chombo v Minister of Lands & Others, the courts, citing Roffey v Catherall, affirmed that the highest form of public policy lies in protecting the “liberty of contracting.” It is difficult to reconcile this judicial position with a policy that retrospectively alters agreed payment terms.
While the RBZ points to the National Standard Price List (NSPL) as a stabilising mechanism, its practical implications for the construction sector must be interrogated. Policy tools must ultimately be judged not by intention, but by outcome.
In essence, the NSPL functions as a price control mechanism. And basic economic principles are clear: where prices are controlled, competition is often suppressed.
The likely consequence is a procurement environment driven less by quality and innovation, and more by compliance with centrally determined pricing. This undermines efficiency and risks lowering industry standards over time.
More critically, the directive to settle contracts entirely in ZiG effectively introduces retrospective variation to existing agreements—many of which were structured with United States dollar components and financial models calibrated accordingly.
This is not a minor administrative adjustment; it is a material alteration of risk allocation.
Such actions send a troubling signal: that contractual terms, no matter how carefully negotiated, remain vulnerable to unilateral revision. This uncertainty is particularly damaging in infrastructure development, where projects are capital-intensive, long-term, and dependent on stable legal frameworks.
The issue, therefore, is not merely about currency. It is about principle.
The Supreme Court’s reasoning in Chombo v Minister of Lands and Others (SC 08/26) is instructive. The court emphasised that the State cannot deploy broad policy instruments to circumvent “carefully negotiated provisions” of contracts. To do so, it warned, “subverts the certainty” required for sustainable development. It further highlighted the need for government to fully appreciate the “serious economic and contractual consequences” of such interference, noting that midstream alterations expose investors to “major commercial loss.”
Against this backdrop, the RBZ’s assurance that contractors can access foreign currency through the willing-buyer willing-seller (WBWS) interbank market appears insufficient. Access to foreign currency in a volatile market is not equivalent to the certainty of contractually agreed payment terms. For contractors, this represents a significant and potentially unmanageable risk.
This raises a practical question: if foreign currency is available within the system, why not channel it directly to settle obligations, rather than introducing an additional administrative layer that transfers risk to contractors?
There may well be policy considerations not fully articulated in the RBZ’s statement. However, a more pragmatic and investor-conscious approach would be to respect the sanctity of existing contracts.
In volatile environments, certainty is the currency that sustains investment. It is the assurance that keeps projects moving, cranes operating, and capital flowing.
Zimbabwe must strive to cultivate a legal and economic environment where contracts are upheld with the same rigour emphasised by its courts.
One of the foundational principles taught in law is that legislation and policy should not apply retrospectively. This is not merely academic doctrine, it is a safeguard against arbitrariness and a pillar of investor confidence.
Blanket policies that disregard existing contractual frameworks risk undermining the very development agenda they seek to advance.
A balanced path forward is both possible and necessary. If invited to the policy table, one would advance a position that protects investment while accommodating reform: that the ZiG-only payment requirement be applied prospectively—to new contracts and future tenders—while exempting existing infrastructure agreements.
This approach achieves policy alignment without destabilising ongoing projects. It allows the State to pursue de-dollarisation objectives without triggering the “major commercial losses” cautioned against in Chombo v Minister of Lands.
Policy, after all, should function as a steering wheel guiding the future—not a wrecking ball dismantling agreements entered into in good faith.
Zimbabwe’s transition to ZiG must therefore be anchored in engagement, consultation, and respect for legal certainty.
Only then can it build, rather than break, the contractual foundations upon which infrastructure development depends.
Michelle Munyanduki is a specialist Construction Law Consultant at Tiefenthaler Consultants. She advises both public and private sector clients on complex infrastructure projects (including FIDIC, NEC, and JBCC contracts) and dispute resolution across the energy, mining, and construction sectors.