The Reserve Bank of Zimbabwe (RBZ) Governor, Dr Mangudya, recently presented his latest Monetary Policy Statement (MPS). The previous MPS was presented in August 2021. A key highlight from this latest MPS is that annual inflation declined from 348% in December 2020 to 60.7% in December 2021. Several areas were covered in his statement and this article, I highlight some of the noteworthy ones.

Projections For 2022

Evidence from high-frequency data on industry performance points to an improved outlook in 2022. Economic growth is projected at 5.5% in 2022 while annual inflation is expected to decline to between 25% and 35% by end of 2022, from 60.7% in December 2021. The ongoing progress in vaccinations against Covid-19 and a return to normal business will revive and boost economic activity and set the economy on a sustained growth trajectory in 2022 and beyond.”

An Overview Of Foreign Currency Allotments – 2021

The table below shows how foreign currency was allotted to the different productive sectors:

Raw Materials43%
Machinery And Equipment19%
Retail And Distribution8%
Medicals And Chemicals7%
Fuel, Electricity And Gas6%

An Overview Of Foreign Currency Receipts – 2021 Versus 2020

You will notice that the category with the highest percentage change was foreign investment. This seems to show that there is increasing foreign investor confidence in Zimbabwe.

Category20212020% Change






International RemittancesDiaspora1430.141002.1042.7


Income Proceeds 118.9356.85109.2
Foreign Investment 91.1440.06127.5
TOTAL 9686.136310.7653.5

The Weekly US$50 Bureau De Change Facility

By the end of 2021, a total of US$23.1 million had been disbursed to 461908 individuals. As I highlighted in a recent article, the facility has since been revised to only cater for PENSIONERS, SENIOR CITIZENS, PEOPLE LIVING WITH DISABILITY, and those requiring FOREX FOR MEDICAL PURPOSE.

2022 A Promising Mining Year In Zimbabwe

The RBZ Governor expressed confidence in the projected performance of the mining sector in 2022.

…the Chamber of Mines of Zimbabwe and Confederation of Zimbabwe Industries (CZI) are bullish about the economic prospects in 2022. For instance, the state of the Mining Industry Report suggests that the mining business confidence index recorded an increase from 9.8% in 2021 to 17% in 2022. The report also noted that about 42% of the respondents in the mining sector expect to ramp up production by over 40% in 2022.

A Look At Inflation

…annual inflation declined from a peak of 837.5% in July 2020 to 50.3% in August 2021. The decline in inflation resulted from the implementation of appropriate disinflationary monetary policies and fiscal consolidation. The resurgence of inflationary pressures at the end of 2021, which saw annual inflation closing the year at 60.7%, is a result of the parallel exchange rates pass-through effects in inflation.

There of course is always debate around these inflation rates. Some feel they are not accurate. Overall, there is an apparent disconnect between the figures and what is obtaining on the ground. There is also the concern cited by the public that it is actually the RBZ that fuels the parallel market that they point fingers at.

The Number Of Registered And Operating Financial Institutions – As At End Of 2021

Commercial Bank13
Building Societies5
Savings Bank1
Microfinance (Credit-Only)168
Microfinance (Deposit-Taking)8
Development Finance3

Banking Institutions Compliance With New Minimum Capital Requirements

By end of 2021, out of the 18 operating banking institutions (excluding POSB with no statutory minimum capital requirement), 13 banking institutions complied with the new minimum capital requirements.

I found it interesting that the bank with the highest declared core capital as of 31 December 2021 was Metbank with roughly US$133.4 million. It was followed by CBZ Bank with US$129.1 million and Stanbic Bank at number three with US$103.2 million. I personally found it interesting because I rarely hear anyone mentioning Metbank, at least in my circle that is.

The Governor also indicated that “AFC Commercial Bank, Nedbank and NBS were granted extensions ranging from 3 to 12 months to allow consummation of capital raising initiatives which are currently underway. In addition, merger proposals will also address the minimum capital requirements for some building societies. The Bank is confident that the remaining institutions will meet the minimum capital requirements by 31 December 2022.”

On Deposit Rates

I felt to add this highlight because some people might not be aware. Effective 28 October in 2021, interest rates were reviewed upwards from 5% and 10% per annum to 7.5% and 20% per annum (this is for ZWL$ savings and time deposits, respectively).

Protection Of Foreign Currency Accounts (FCAs)

The Deposit Protection Corporation (DPC) implemented an explicit deposit protection scheme for the Foreign Currency Denominated Accounts (FCAs) with effect from 31 December 2021… The FCA maximum cover level is US$1,000.00 (one thousand United States dollars) per deposit class per each banking institution and US$500.00 (five hundred United States dollars) per deposit class per deposit-taking microfinance institution with effect from 1 January 2022.”

A Note On Sustainability

I have mentioned environmental social governance (ESG) a lot of late. This is an area that every enterprise must pay close attention to. It is encouraging to note that the RBZ is keen on ESG. This was evidenced by what the Governor said in his MPS as follows:

…the Bank continues to work closely with a number of financial institutions in the implementation of the Sustainability Standards & Certification Initiative (SSCI) being driven by the European Organization for Sustainable Development (EOSD). As of 31 December 2021, nine (9) banking institutions were participating under the central bank-led Sustainability Standards and Certification Initiative, while three (3) microfinance institutions were accepted into SSCI.

Financial Inclusion

He said that the number of active mobile money subscribers increased from 4.05 million to 4.13 million active subscribers during the review period. While this is commendable, this number still falls way short when you consider the population of Zimbabwe. More work still needs to be done. The National Financial Inclusion Strategy Number 1 (NFIS I) ended on 31 December 2021. Drafting of NFIS II is currently underway; a consultant, FinMark Trust, has been engaged for that. Digital payment systems transactions’ value increased by 218% (i.e. from ZW$2.5 trillion in 2020 to ZW$7.8 trillion in 2021). However, transaction volumes went down by 24% to 1.4 billion.

These are some of the key highlights from the latest MPS that was delivered by the RBZ Governor, Dr John Panonetsa Mangudya.