IMF's Bangladesh economists must stay out of Zimbabwe

Published: 3 hours ago

The International Monetary Fund's (IMF) latest report on Zimbabwe's economy follows a familiar script - polite praise for modest progress, followed by subtle warnings and prescriptive reforms that often do more harm than good. At the heart of its 2025 Article IV Consultation Report is an insinuation that the Zimbabwe Gold (ZiG) currency faces "weak confidence" and potential overvaluation. This claim is both inaccurate and misleading. The ZiG is not overvalued; it is in fact undervalued. The IMF, and particularly its economists with limited contextual understanding of Zimbabwe, must stay out of the country's monetary affairs.

IMF and its Bangladesh economists must stay out of Zimbabwe.

Let's be clear: the ZiG is not overvalued. If anything, it is undervalued - a reflection of persistent negative sentiment rather than economic fundamentals. Zimbabwe's economy is on a firm recovery path, with the IMF itself projecting 6 percent growth in 2025, driven by improved agricultural output, strong remittances, and record-high gold prices. These are tangible indicators of an economy that is regaining stability and self-sufficiency. The ZiG, which is backed by gold and other reserves, has helped restore some confidence in the local monetary system following years of instability. To suggest that this currency is overvalued ignores the underlying fundamentals and the structural reforms the Reserve Bank of Zimbabwe has undertaken to tighten liquidity and curb inflation.

The problem is not the currency itself; it is the perception - and international interference - that continues to distort its value. When IMF economists, many of them detached from Zimbabwe's socio-economic realities, prescribe austerity, "market-based exchange rates," and reduced government spending, they do so through a framework designed for Western economies, not emerging markets rebuilding after two decades of sanctions and financial isolation. Their repeated calls for fiscal consolidation, while theoretically sound, ignore the fact that Zimbabwe needs strategic state-led investment, not contractionary policies that suffocate domestic demand.

By continuously framing Zimbabwe's fiscal and monetary policies through an IMF lens, local policymaking becomes constrained by external expectations. The IMF's advice to "shift toward a transparent, market-based exchange rate" ignores that Zimbabwe's markets remain thin and often manipulated by speculative actors who thrive on volatility. Full liberalisation of the exchange rate under current conditions would not reflect market efficiency - it would reflect market sabotage.

Moreover, the IMF's subtle pressure for the government to further open its books to foreign scrutiny under the guise of "transparency" in managing the Mutapa Investment Fund risks undermining Zimbabwe's sovereign control over key national assets. These state-owned entities, if strategically managed, could become engines of domestic reinvestment and industrialisation. But that vision requires autonomy - not external micro-management.

The ZiG's current strength, underpinned by gold reserves and tighter monetary policy, represents a rare opportunity for Zimbabwe to reassert monetary independence. The IMF's fixation on "confidence" conveniently overlooks the fact that such confidence is often shaped by Western media narratives and credit-rating biases - not by the lived economic realities of ordinary Zimbabweans. What Zimbabwe needs now is not another round of IMF conditionalities, but a developmental monetary policy anchored on resource-backed stability, controlled money supply, and regional integration.

The ZiG can and should become a respected regional currency - but only if the country shields its monetary policy from foreign "advisors" who historically contributed to its instability. The IMF and its economists in Washington - and their counterparts seconded to African offices - must stay out of Zimbabwe's currency affairs. Their role should be limited to technical observation, not prescriptive intervention. Zimbabwe's policymakers, guided by local expertise and grounded in national priorities, are better positioned to determine the true value of the ZiG and to restore its rightful place alongside Africa's strongest currencies.

The problem with the IMF's assessment is that it views Zimbabwe through a one-size-fits-all framework designed to protect Western financial interests rather than promote true economic sovereignty. Historically, the IMF has acted less as a neutral financial adviser and more as a political instrument serving Western nations. Its policy prescriptions - typically centred on austerity, privatisation, and currency liberalisation - have left lasting scars across Africa and the developing world. Countries that once adopted IMF reforms, from Ghana to Zambia, have found themselves in deeper debt, suffering from weakened currencies, rising poverty, and the loss of control over national economic policy.

Zimbabwe cannot afford to fall into that trap again. The ZiG is anchored in real assets, with gold reserves providing intrinsic value that should logically place it within the same range as the Botswana Pula, Ghanaian Cedi, and South African Rand. The IMF's insistence on a "market-based exchange rate" is effectively a call to subject the currency to speculative manipulation and external pressure. Such moves would only weaken the ZiG artificially, reigniting inflationary cycles and undermining public confidence - exactly the conditions that once crippled Zimbabwe's economy.

What Zimbabwe needs is not IMF approval, but national confidence and regional solidarity. The Southern African region has shown that strong, resource-backed currencies can thrive when supported by disciplined fiscal policy and prudent monetary management. Zimbabwe's decision to back its currency with gold is a strategic masterstroke that should be protected from foreign interference. Rather than constantly looking to Washington or the IMF for validation, Zimbabwe should deepen regional trade and settlement in the ZiG, while engaging partners who respect its sovereignty.

The IMF's argument that Zimbabwe's fiscal pressures and domestic arrears pose risks to stability is not unfounded, but its proposed solutions - austerity and further liberalisation - have historically worsened such conditions. True recovery will come from productive investment, export growth, and a strong local currency that reflects the nation's real economic potential. Zimbabwe's challenge is to remain steadfast in its pursuit of self-reliance and to avoid being swayed by foreign institutions whose interests are rarely aligned with its own.

For decades, IMF policies have left African nations weaker, poorer, and more dependent on external approval. Zimbabwe must not let that cycle repeat. The ZiG is not a liability; it is a symbol of renewed sovereignty and resilience. It deserves to be strengthened, not sabotaged. The IMF and its economists should refrain from imposing outdated economic dogma on a nation charting its own path toward recovery and independence. In truth, the ZiG's greatest threat does not come from within Zimbabwe - it comes from the external forces that cannot stand to see an African country succeed on its own terms.
- Changamire Dombo

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