Zimbabwe banks ‘lending short’ as trust crisis grows
Zimbabwe must shift toward market-based policies and greater consultation with stakeholders or risk destroying confidence in its banking sector and sabotaging efforts to establish a stable national currency, according to banker and economist Nigel Chanakira. Speaking after the In Conversation with Trevor Ideas Festival, he criticized what he called heavy-handed central bank policies that discourage savings and investment while creating market instability. He cited regulations that lock foreign currency deposits at zero interest rates and the government’s declared intention to end multicurrency use by December 2030.
Chanakira said the 2030 cutoff date has prompted banks to issue only short-term loans that mature before the deadline, limiting financing for housing and industrial projects. He questioned the logic of holding depositor funds without interest for two years and warned that imposing a local currency without building trust would trigger capital flight. The Zimbabwe Gold currency continues struggling to gain acceptance among citizens who prefer using U.S. dollars.
He argued authorities should persuade rather than impose and earn public trust through disciplined fiscal management and transparent monetary policy. Confidence cannot be commanded but must be demonstrated through responsible government action, Chanakira said.
