Zimbabwe Stock Exchange Seeks Clarity on ZiG Reporting Rules

AFRICAN STOCKS AND FINANCEFebruary 26, 2025 at 9:21 AM UTC

TLDR

Market regulator is consulting the central bank on new rules requiring companies to report financial statements in the nation’s gold-backed currency
Central bank Governor John Mushayavanhu ordered listed companies to adopt ZiG for financial reporting “with immediate effect,” including for 2024 audited statements
Listed firms have been allowed to report in dollars since 2023 due to its dominance and the collapse of the Zimbabwean dollar

Zimbabwe’s Securities and Exchange Commission is consulting the central bank on new rules requiring companies to report financial statements in the nation’s gold-backed currency, ZiG. The move could force businesses to adopt hyperinflationary accounting and increase costs.

Zimbabwe Stock Exchange CEO Justin Bgoni said Monday the regulator is in talks with authorities about the directive. Earlier this month, Central Bank Governor John Mushayavanhu ordered listed companies to adopt ZiG for financial reporting “with immediate effect,” including for 2024 audited statements. The currency accounts for 30% of transactions, with the rest in U.S. dollars.

Listed firms have been allowed to report in dollars since 2023 due to its dominance and the collapse of the Zimbabwean dollar. Many, including Delta Corp, have switched. FBC Holdings warned the policy could bring “accounting complexities, inflation risks, investor concerns, and regulatory challenges.”

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Key Takeaways

ZiG is Zimbabwe’s sixth currency since 2009. It has lost 95% of its value since launch, prompting authorities to devalue it in September. Economic conditions have led global accounting firms Deloitte and PwC to exit the country. Companies operating in Zimbabwe may face higher costs and compliance burdens if required to report in ZiG. Frequent currency instability has made long-term financial planning difficult. Businesses reliant on U.S. dollar transactions could struggle to reflect their actual performance in ZiG terms. Companies may also reconsider their Zimbabwe operations due to policy uncertainty. Investors have already responded cautiously to the ZiG, given its sharp depreciation since launch. The market awaits further clarity from regulators, but businesses are urging a hybrid model allowing them to choose their reporting currency to maintain financial stability and transparency.

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