Z$ seen falling further in 2024

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THE Zimdollar (Z$) will experience double-digit depreciation next year and the local economy will remain highly dollarised, a leading researcher has said.
Confidence in the local currency has taken a knock, with the domestic unit losing more than 80 percent of its value versus the US dollar on the official market.
In its Africa Outlook 2024, the Economist Intelligence Unit (EIU) said inflationary pressures are expected to ease from the elevated levels recorded in 2023, for all but a small handful of African countries, but double-digit inflation will continue to afflict countries like Zimbabwe.

“We forecast currency depreciation against the US dollar across much of Africa in 2024, although adjustments are expected to be less severe than those recorded in 2023,” the research and analysis division of The Economist Group said.
“The Southern African economies of South Africa, Namibia and Botswana saw their currencies lose considerable value against the US dollar in 2023, but currency stabilisation appears the most likely outcome in 2024.
“Zimbabwe is the exception in Southern Africa, where substantial exchange-rate depreciation will be aggravated by diminishing confidence in the local currency — the weak economy will remain highly-dollarised and the planned adoption of digital gold coins as a medium of exchange, possibly by 2024, will further erode the value of the Zimbabwe dollar,” the EIU said.
Among key industries with a promising outlook next year, the EIU said the construction sector will continue to benefit from a large pipeline of ongoing and planned energy sector projects, the region’s expanding transport infrastructure and further investment in electrification projects to expand generation capacity and transmission networks.
The report noted that travel, tourism and hospitality performed well in 2023, as the sector remained in recovery mode following the adverse effects of the Covid‑19 pandemic in 2020 and 2021.
The EIU said investment in the tourism sector, improving international connectivity and strong demand for African destinations in established and emerging markets will support the sector in 2024.
Africa’s extractives sector—encompassing hydrocarbons and renewable energy, and metals and mineral mining and processing —has momentum from reasonably strong demand and high prices for export products and this will continue into 2024, according to the EIU.
In addition, the transport and logistics industries will receive a boost from relatively upbeat domestic demand in some key markets, the increasing role of regional supply chains facilitated by increasing levels of cross-border cooperation and resilient import-export trade between Africa and major overseas partners.