Zimbabwe’s biggest industrial lobby said this week manufacturing firms had intensified their hunt for United States dollars on the black market as foreign currency shortages deepen.
The Confederation of Zimbabwe Industries (CZI)’s latest report confirmed a recent surge in demand for US dollars on the parallel market, even as authorities insist adequate forex is available through official channels.
CZI said the Zimbabwe Gold (ZiG) appreciated by about 0,9% on the official market between March and April, but lost roughly 4,2% on the parallel market, pushing the exchange rate premium from below 20% in March to just under 25% in April.
“The widening premium can be attributed to heightened demand for foreign currency, as businesses increasingly turn to the parallel market to meet immediate payment obligations,” CZI said.
“This is particularly evident in the context of rising operational costs, especially fuel, where official foreign exchange channels may be insufficient to accommodate sudden spikes in demand.”
The findings come as Zimbabwe continues battling to stabilise ZiG, launched in April 2024 to replace the Zimbabwe dollar after years of currency volatility and runaway inflation.
Authorities have maintained tight monetary and fiscal policies to support exchange rate stability. However, businesses say access to foreign currency through official channels remains constrained, forcing many firms onto the black market to pay for imports and settle urgent obligations.
The manufacturing sector — one of the country’s largest users of foreign currency — has repeatedly warned that exchange rate distortions are driving up production costs and complicating pricing models.
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CZI said inflationary pressures intensified in April, driven by rising fuel and transport costs linked to the ongoing Israel-US-Iran war.
Month-on-month ZiG inflation accelerated to 1,1% in April from 0,5% in March. It signals renewed short-term price pressures.
“This acceleration, a direct result of the Israel-US-Iran war, has direct implications for businesses,” the report said.
“Rising month-on-month inflation increases operating costs, particularly through fuel, transport, and input prices, while also creating uncertainty in pricing strategies and profit margins.”
CZI warned that firms operating in price-sensitive markets were coming under growing pressure, as weak consumer demand limited their ability to pass on higher costs.
“For firms operating in price-sensitive markets, the ability to pass on these costs remains constrained, leading to margin compression,” the report said.
“Additionally, increased inflation volatility may continue to weaken consumer purchasing power, dampening demand.”
Zimbabwe remains heavily exposed to global fuel price shocks because it relies almost entirely on imported petroleum products. Fuel is a major cost driver across transport, mining, agriculture and manufacturing.
The report showed that several items in the consumer basket recorded sharp price increases in April compared with March.
Gas prices surged 12,4%, fuels and lubricants for personal transport rose 9,5%, while transport services climbed 7,5%.
“These trends underscore the strong sensitivity of certain sectors to fuel price movements, and its contribution to short-term inflationary pressures,” CZI said.
Year-on-year ZiG inflation rose to 4,8% in April from 4,4% in March, suggesting annual inflationary pressures are beginning to creep upward again after a prolonged slowdown.
“The rise in ZiG year-on-year inflation is largely driven by price increases in selected products and services,” the report said.
Fuels and lubricants for personal transport increased 21,2%, sewage collection costs rose 20,7%, operating personal transport equipment climbed 20,2%, while transport costs advanced 17,8%.
“These specific pressures suggest that while general annual inflation remains under 5%, essential service and energy costs are rising at a concerning rate,” CZI said.
Despite the increases, the industry body said inflation had remained relatively contained in the face of external shocks, reflecting stronger monetary policy discipline.
“The April 2026 inflation data is expected to have captured the full effect of the war-induced price increases,” the report said.
