Infrastructure Sector Alarmed as Zimbabwe Treasury Shifts to Exclusive ZiG Payments for Major State Contracts

Zimbabwe state contractors warn of operational risks as Treasury shifts to exclusive ZiG payments. Industry leaders call for exchange rate safeguards.

By: AXL Media

Published: Mar 28, 2026, 5:06 AM EDT

Source: The information in this article was sourced from Bulawayo24 NEWS

A Shift Toward Monetary Sovereignty

Zimbabwe's Treasury has initiated a significant policy pivot by mandating that all local suppliers and infrastructure contractors be paid exclusively in the gold-backed Zimbabwe Gold currency. This transition is designed to bolster domestic demand for the unit and reduce the economy's heavy reliance on the US dollar, which currently facilitates the vast majority of national transactions. By positioning the State as the primary anchor for the new currency, officials hope to solidify recent macroeconomic gains, including a drop in annual inflation to single digits for the first time in several decades.

Operational Risks in a Dollarized Environment

Despite the optimistic outlook from government quarters, industry players are sounding the alarm over a potential mismatch between project costs and payment structures. Tinashe Manzungu, president of the Zimbabwe Builders and Construction Association, noted that because a majority of construction inputs and raw materials are still priced in US dollars, contractors are facing a high-stakes balancing act. Without clear safeguards, there is a growing fear that firms will be forced into a survival mindset, prioritizing currency hedging over the actual completion of vital public works.

Defensive Pricing and Inflationary Pressures

One of the most immediate side effects of the new payment directive is the likely emergence of defensive pricing strategies among local firms. To protect themselves against potential exchange rate volatility between the time of a quote and the final payment, contractors may naturally inflate their bids. Economists warn that this behavior could inadvertently become inflationary, driving up the total cost of government infrastructure projects and potentially canceling out the stability that the National Standard Price List was intended to provide.