©Dr. Admire M. Dube, CFA®@admire_dube
🧵1️⃣ REFINE THE WILLING BUYER WILLING SELLER (WBWS) SYSTEM
The WBWS mechanism, which allows market-driven determination of exchange rates through interbank trading, has significantly reduced parallel market premiums from 40% in January 2024 to under 10% by August 2025. Currently the premium is single digits.
Because I’m wont to believe the Gov. is currently not amenable to a true floating “unmanaged” system of Forex distribution (partly because it becomes an easier one-failure-point for “economic saboteurs” to target distribution of forex), then I look forward to this current WBWS system being “augmented” rather than abandonment.
While indications are that market-based systems like WBWS promote efficiency by aligning rates with supply and demand, as per the Mundell-Fleming model where flexible exchange rates insulate domestic policy from external shocks, suboptimal implementation can lead to volatility if liquidity is insufficient.
In Zimbabwe's context, the windfall from sky high gold prices (very welcome by the way) is masking the grave inefficiencies of the WBWS system.
With foreign exchange reserves at US$1.2 billion in Dec 2025, equivalent to 1.5 months of import cover, the system indeed should be augmented with reserve-building measures such as auction enhancements to ensure depth - supporting the fiscal side already racking in reserves “in kind.”
To this end, I expect the following precise, Zimbabwe-specific enhancements to the WBWS system with the goal being to boost market depth, transparency, and resilience without necessarily shifting to a fully unmanaged float, which could invite speculative attacks (given Zimbabwe's history of external shocks and sanctions).
A. Deploy a Centralized Electronic Trading Platform:
Roll out the RBZ's proposed Foreign Exchange Interbank Market Electronic Trading System (FEXIMETS) by mid-2026, mandating all authorised dealers to conduct WBWS trades via this platform.
This would enable real-time price discovery, automated matching of bids/offers, and blockchain-secured transaction logging to reduce opacity and counterparty risks.
In Zimbabwe's context, integrate it with the Central Securities Depository for seamless linkage to gold royalties (e.g., 12.5% in-kind from miners), allowing exporters like gold producers to directly auction portions of their FX earnings, increasing daily liquidity by my estimates 15-20% higher based on 2025 gold export volumes (40 tonnes projected). This ultimately makes for an efficient, robust, and very much self reliant system that will still stand its own even when gold prices fall.
B. Phased Reduction of Export Surrender Requirements with Market Redirection:
This is a standalone point for my expectations in the impending MPS announcement tomorrow, so will be discussed at length in thread 🧵2️⃣ below.
C. Increase Auction Frequency and Participant Inclusivity with Volume Caps:
Efficiency will be greatly enhanced if auction frequency is shift from weekly to bi-weekly FX auctions under WBWS or even 3 times, initially with cap on max bids per entity per day to prevent dominance by large miners or importers.
No harm in including diaspora remittance providers (e.g., via Onafriq partnerships) as secondary participants, allowing them bureau de change licences so they can provide ZiG to recipients who want a potion, or all, of their money in local currency, since formal and parallel rates have all but converged anyway.
By allocating only 10% of auction volumes to them this captures US$250 million from the anticipated US$2.5 billion annual inflows this year.
Overall, let’s see what the Gov. says about Bureau de Changes in general as they have a potential to narrow premiums further by integrating informal flows, without fully liberalising exchange rates and Forex distribution.
Continued below…
