While most countries worry about their currencies losing value, Zimbabwe is taking a bold gamble by stuffing its vaults with gold to save its newest money experiment. The southern African nation is extending its gold-buying spree through 2026, hoping to keep its ZiG currency from becoming another failed monetary attempt.
Zimbabwe’s central bank has been shopping for gold like it’s preparing for economic doomsday. Foreign reserves jumped from a measly $276 million in April 2024 to an impressive $1.1 billion by December 2025. That’s like going from having lunch money to affording a fancy dinner, though it still only covers 1.2 months of imports.
The ZiG currency, launched in April 2024, now handles 40% of daily transactions across the country. Mining companies must pay half their royalties in actual precious metals rather than cash, creating a steady stream of shiny assets for the government’s treasure chest. The central bank collected 33 tonnes of gold this year, falling short of their 40-tonne target but still building substantial reserves.
Gold prices are working in Zimbabwe’s favor, currently trading around $4,500 per ounce and potentially reaching $5,000 by 2026. This global rally helps strengthen the ZiG, which has only dropped 0.7% against the dollar in 2025.
Central banks worldwide are buying gold at four times their pre-2022 pace, creating competition but also validating Zimbabwe’s strategy. The government is deliberately waiting for gold prices to hit the $5,000 threshold before considering raising royalty rates from the current 5% to 10%.
The plan sounds ambitious: make ZiG the sole legal tender by 2030 with 100% backing from gold and foreign currency reserves. Currently, the currency is supported by 2.5 tonnes of gold and $100 million in foreign money. Governor John Mushayavanhu continues advocating for reserve growth, believing it will help achieve the economic stability needed for this transition.
Export earnings from gold alone reached $467.2 million in August 2025, accounting for over half of the country’s exports.
However, challenges remain significant. The International Monetary Fund warns that reserves are still limited and urges broader economic reforms. Unlike traditional cash dividends that companies pay to shareholders from profits, Zimbabwe’s gold-backed currency strategy represents a fundamental shift in how the nation approaches monetary policy.
Zimbabwe’s central bank expects 5% economic growth in 2026, but success depends on continued gold accumulation and maintaining public confidence. Whether this golden strategy can finally give Zimbabwe monetary stability remains the million-dollar question.
Related Posts
