Statutory Instrument 34 of 2025 Marks End of Official Exchange Rate Pricing Mandate
Zimbabwe has formally embraced market-based pricing, scrapping restrictive exchange rate controls that had forced businesses to price goods using the Reserve Bank’s official interbank rate. The landmark shift comes through Statutory Instrument 34 of 2025, gazetted by Finance Minister Professor Mthuli Ncube, allowing businesses to legally use their own exchange rates in response to market dynamics.
The now-repealed law, introduced in May 2024, penalised businesses that used parallel rates, contributing to pricing distortions and undermining formal retail competitiveness.
The change is being widely welcomed as a move that acknowledges economic realities on the ground.
“The restriction has now been removed,” said Prof Ashok Chakravarti, Monetary Policy Committee member. “With the local currency now stable, market forces can take over. This will encourage competition and fairer pricing.”
Before this formalisation, many businesses had already been pricing goods based on rates between 30 and 32 ZiG per US dollar—higher than the official 27—while authorities largely turned a blind eye. The new policy effectively legalises this widely adopted practice.
Economists are describing the repeal as a necessary step to restore confidence and reduce the gap between formal and informal sectors.
Dr Pedzisai Kaunda said, “This was long overdue. The Government has finally recognised that letting businesses operate based on market conditions is more effective than enforcing unrealistic controls.”
Mrs Gladys Shumbambiri-Mutsopotsi, a research economist, called it a “corrective shift” and a sign of maturity in policy-making. “This is about adapting governance to economic fundamentals, not working against them,” she said.
ZNCC chief executive Christopher Mugaga noted that while the move promotes flexibility and competitiveness, fiscal policies must now evolve in tandem to support formalisation and reduce the tax burden on compliant businesses.
“This is an opportunity to balance the scales between formal and informal sectors,” Mugaga said.
The Government is banking on enhanced transparency, improved investor confidence, and reduced inflationary pressures as outcomes of this liberalisation.
With Zimbabwe’s new currency, the ZiG, enjoying stability and the legal framework now aligned with real market behaviour, the spotlight shifts to how businesses and consumers respond in practice.
“Let competition be the regulator,” Prof Chakravarti concluded. “That is the future Zimbabwe is now embracing.”
