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Business Reporters
ZIMBABWEAN businesses now have greater pricing flexibility, thanks to a more stable local currency and the scrapping of exchange rate controls.
Through Statutory Instrument 34 of 2025, Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, has repealed the previous law that restricted businesses to the official exchange rate when pricing goods and services.
Professor Mthuli Ncube
The repealed law, enacted in May 2024, prohibited businesses from pricing their products using exchange rates higher than the Reserve Bank of Zimbabwe’s average interbank foreign currency selling rate.
This new flexibility is anticipated to encourage more ethical business practices, as market competition will likely compel businesses that might otherwise overcharge to align their prices with prevailing market levels.
While the central bank had previously announced that businesses could utilise their own exchange rates, this pronouncement lacked legal authority without a formal Statutory Instrument.
Prof Ncube has now formalised this, in a bid to promote transparency and competitiveness in Zimbabwe’s pricing structures.
“The restriction has now been removed,” said Prof Ashok Chakravarti, a member of the Reserve Bank of Zimbabwe’s Monetary Policy Committee (MPC).
“Because of the stability of the local currency and the economy, the government is confident that pricing in the market can be freed. It will stabilise based on competition amongst businesses.”
Prof Chakravarti added that while retailers such as Pick n Pay had already been informally using rates around 30–32 Zimbabwe dollars per U.S. dollar, higher than the official 27, authorities had turned a blind eye.
“All we have done is legalise that particular type of pricing and behaviour in the market,” he said.
This legislative change comes on the back of a more stable local currency, helped by tighter monetary discipline and improved foreign currency inflows. It also reflects a policy recalibration by Government, which has struggled to contain pricing distortions and a thriving informal sector that operates outside formal exchange frameworks.
Statutory Instrument 34 of 2025, formally titled, “The Exchange Control (Amendment of Schedule to the Exchange Control Act) (Repeal) Notice”, symbolises the Government’s broader attempt to adapt regulation to prevailing market dynamics.
It eliminates the schedule governing civil penalties for currency violations, essentially legalising what had become common practice across formal retail and informal trading platforms.
“This is Government trying its best to close the gap between the formal and informal players,” said Zimbabwe National Chamber of Commerce (ZNCC) chief executive Christopher Mugaga. “The move gives businesses the leeway to deal with prices as they see fit and adjust according to the environment.”
While the business community has broadly welcomed the repeal, concerns remain, over whether monetary reform will be matched with fiscal discipline.
Mr Mugaga cautioned that tax policy must evolve alongside exchange rate liberalisation to ensure the formal sector remains competitive.
“The fiscal side should complement the monetary side in order to level the ground, and this can be done by reducing taxes to the formalised and formalising the informal,” he said.
Indeed, despite the progressive tone of the latest reforms, long-term success will hinge on how well the fiscal environment supports business sustainability.
Economists are applauding the policy as a pragmatic move aligned with market realities.
“This was long overdue,” said Dr Pedzisai Kaunda, an economist. “Businesses were already pricing goods at a rate they felt was viable. The Government’s recognition of this, and more importantly, the decision to give it legal backing sends the right signal to investors and retailers alike.”
Dr Kaunda believes the change could help restore confidence in the formal retail sector, which has struggled to compete with informal traders, who price goods based on parallel market rates.
Echoing this sentiment, Mrs Gladys Shumbambiri-Mutsopotsi, a research economist, described the move as a “corrective policy shift.”
“Through liberalising the pricing mechanism, the Government is acknowledging market behaviour and responding with policy that is more facilitative than punitive,” she said. “It shows a learning curve in governance and a greater willingness to let economic fundamentals drive outcomes.”
Both economists, however, stressed that consistency would be key. “Sustaining this momentum and supporting it with a credible fiscal framework is what will anchor business sentiment going forward,” said Mrs Shumbambiri-Mutsopotsi.
The Government’s hope is that liberalising the exchange rate used in pricing will encourage fairer business practices. In theory, market forces should now help regulate prices more effectively than statutory impositions.
As Prof Chakravarti said, “Let it be determined by competition amongst the players. That is the right way to go.”
This, analysts say, could also reduce the need for heavy-handed regulatory interventions.
“If businesses price too high, consumers will simply buy elsewhere. The market becomes the enforcer,” said Dr Kaunda.
The move may also improve the country’s perception among international investors, who have long been wary of opaque currency policies.
With the ZWG enjoying a period of relative calm and the exchange rate now truly liberalised, all eyes will be on whether this pricing freedom translates into lower inflation and a more level playing field for businesses across the board.
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Exchange rate controls scrapped in major shift to market pricing – The Chronicle – Breaking news
