According to recent research by the Economic Freedom Country Audit Zimbabwe (EFCAZ), talking about monetary instability in the country, escalation is inevitable unless urgent political changes are implemented. Given that there is little evidence of political will to resolve this situation, the country is struggling with instability. The currency of Zimbabwe, which was introduced in April 2024, did not contribute to the stability and improvement of the economic situation in the country. Bad economic policy led by the top government is slowly causing unrest in the country. Despite the fact that this currency crisis has been going on for more than 20 years, political officials have failed to stabilize the economy and help the nation.

Zimbabwe is a country rich in mineral resources. Dominant minerals are platinum, chrome, gold, coal, lithium and diamonds. Zimbabwe is the world’s second largest producer of high-grade platinum and chromium, with approximately 2.8 billion tons of platinum and 10 million tons of chrome ore accounting for around 12% (GDP). Zimbabwe can boast of being the second country in the world with over 4,000-recorded gold deposits, and one of the six in the world for lithium deposits.

In the early 2000s, Zimbabwe faced serious economic challenges trying to stabilize its economy until 2009 when it abandoned its currency after inflation of 500 billion percent. The country turned to foreign currencies (US dollar and South African rand) to reintroduce the local currency after a few years in 2014 until 2019 when it replaced that currency with the RTGS dollar. That same year 2019, Zimbabwe abandons its currency in favor of a multi-currency system due to the Covid-19 pandemic.

In April of this year, the government introduced the Zimbabwe Gold (ZiG) currency, and many wondered whether the monetary system would ever stabilize. The high rate of inflation and economic instability in this case leads to a lack of confidence investing in the economy. Therefore, this kind of policy has discouraged domestic and foreign investments, which further slows down the country’s economic development. In terms of economic growth, Zimbabwe will take a long time to recover.

Recommendations for policy change also came from Fred McMahon, Economic Freedom, Fraser Institute, who stated that Zimbabwe should follow the example of Ecuador, which solved the inflationary crisis by adopting the US dollar as its official currency. McMahon’s recommendation is that if the government wants to maintain control over the currency, it must empower the central bank to act independently of political influence in order to control inflation. In this case, the independence of the Central Bank aimed at controlling inflation and not at the political priorities of the government.

Zimbabwe is struggling with a currency crisis, and the government is facing increasing pressure from the IMF and the World Bank to implement reforms that will revive the country’s economy in the long term.