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The Zimbabwean government has been forced to cut spending on certain budget items following a 43% devaluation of the ZiG currency against the US dollar in late September.
The country’s Treasury has instructed government departments to prioritise their spending commitments for the remainder of the year, as non-wage budget support will be severely limited.
A circular sent to Permanent Secretaries and the Clerk of Parliament on November 13 warned that non-wage budget allocations will be restricted.
Finance, Economic Development and Investment Promotion Permanent Secretary George Guvamatanga said:
<blockquote>
As you may be aware, the local currency unit (ZWG) recently depreciated by 43 per cent against the United States dollar, resulting in a substantial mismatch between revenue inflows, collected in some cases with a one-month lag and local currency expenditures that immediately adjusted to the new exchange rate, in the process severely constraining fiscal space for the last quarter of 2024.
The imbalance was further exacerbated by a backdated review award in October 2024 to the civil service.
Given the consequent limited fiscal space and the need to mobilise additional resources to fund critical inescapable expenditures that include the 2024 bonus award, food deficit mitigation support, 2024/25 agriculture input support, and utilities among other critical requirements, Treasury wishes to advise that non-wage budget support for the months of November and December 2024 will be severely constrained. MDAs are, therefore, requested to prioritise their expenditure commitments during this period.
To support the prioritisation programme, Treasury shall be implementing the following complementary expenditure containment measures for the remainder of the 2024 fiscal year:
<ul>
<li>Prioritise payment of outstanding unfunded payment runs;</li>
<li>Treasury concurrence for foreign travels shall only be granted where funding is provided by Agencies other than Government, Local Authorities and State-Owned Enterprises;</li>
<li>Deferment of all local workshops with the exception of those granted prior approval by Treasury;</li>
<li>Rationalisation of fuel for operational requirements by 50%…</li>
</ul>
</blockquote>
Zimbabwe is set to present its 2025 budget at the end of this month. However, Finance Minister Mthuli Ncube said that funding bids have already exceeded ZiG700 billion, far surpassing the budget ceiling of ZiG140 billion.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Pindula News

The Zimbabwean government had to cut spending because their currency lost value against the US dollar. They told government departments to spend carefully for the rest of the year. The Finance Secretary said the currency lost value by 43%, which made it hard to pay for things. They need more money for important things like bonuses and food. They will limit spending on things like travel and workshops. Zimbabwe is making plans for next year's budget, but they already need more money than they have.

Government Cuts Spending As ZiG Drop Hits Budget

The Reserve Bank of Zimbabwe (RBZ) has forecast that inflation will fall below 5% by December, despite challenges such as a rising import bill and fluctuations in commodity prices.
In October, consumer prices surged by 37.2%, driven largely by a sharp depreciation of the Zimbabwe Gold (ZWG) currency.
However, in an interview with the <a href="https://www.theindependent.co.zw/business-digest/article/200034711/panic-not-inflation-is-under-control-rbz">Zimbabwe Independent</a>, RBZ Deputy Governor Innocent Matshe expressed confidence that inflation will soon stabilise and return to acceptable levels. Said Matshe:
<blockquote>
So really, as an economy, we should not panic because there is this huge jump in inflation.
But what we should do is take lessons from it. Because really, in terms of the aggregate inflation, it has risen to about 7,3% and we projected that by December the inflation rate should be below 5%.
We have a huge import bill of grain because of the El Niño-induced drought. We have had a huge knock given the fall in commodity prices.
We are a commodity exporter. So, we had a huge fall in commodity prices.
</blockquote>
Matshe explained that because the Zimbabwe Gold (ZWG) currency is backed by gold, an increase in gold prices will ultimately help stabilise the currency. He said:
<blockquote>
We are not so far off. We know that there has been an uptick this month (in terms of inflation). There will be moderation next month, but there will be a fall going forward to within the 5% that we projected. So, everything is under control.
Obviously, that will have an impact, but we think that impact (will be) moderate because one of the key commodities in our reserves basket, which is gold, its price is going up.
It is actually approaching record highs if it’s not at record highs already. So, there will be a moderation.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The Reserve Bank of Zimbabwe says inflation will go below 5% by December. The rise in prices in October was mainly because of their currency losing value. The Deputy Governor believes things will improve soon. They have a big bill for importing food because of bad weather. Also, the prices of goods they sell have fallen. But, because their currency is connected to gold, if gold prices go up, their currency will be stable. They predict inflation will drop to 5% soon.

RBZ Projects Inflation To Drop Below 5% By December

Finance, Economic Development, and Investment Promotion Minister Mthuli Ncube has said Zimbabwe has benefited from a weaker local currency, which has promoted economic growth over the past three years.
The Reserve Bank of Zimbabwe (RBZ) recently devalued the domestic currency, the Zimbabwe Gold (ZiG), by 43 per cent after the gap between the official foreign exchange rate and the parallel market rate widened.
The ZiG is the country’s sixth attempt to introduce a stable currency in 15 years and has been depreciating against the United States dollar since its debut in April 2024.
During a signing ceremony of four financing agreements between Zimbabwe and the European Union (EU) in Harare on Wednesday, Ncube attributed the country’s stagnating economic growth for this year to climate change, not the ZiG. He said (via <a href="https://www.newsday.co.zw/local-news/article/200034319/weak-currency-key-to-economic-growth-mthuli">NewsDay</a>):
<blockquote>
If your sole reference currency is foreign currency, you need a domestic currency to grow. And that’s what we have in the form of ZiG. And it is supporting economic growth.
Do you think it is surprising that in all the currency volatility we have experienced in the last five years, the Zimbabwean economy has grown at an average rate of 6,8% in the last three years?
How did this happen if currency was such a big deal? And I think it shows and proves to you that having a weaker domestic currency has actually produced more advantages than disadvantages.
And it shows economic growth. And the reason why we have slower growth this year is not because of the currency. It’s actually because of climate change.
What I’m also saying is that, you know, a currency that weakens presents opportunities and advantages to one group of people, but disadvantages to others.
So it is not advantage all the way, but disadvantage all the way. So, for example, if you’re an exporter, after the depreciation of ZiG, suddenly your inflows in ZiG terms have doubled.
So that’s why currency depreciation really supports what we call export competitiveness.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Minister Mthuli Ncube said Zimbabwe's weak currency helped the economy grow. The local currency, Zimbabwe Gold, was devalued by 43% by the Reserve Bank of Zimbabwe. The currency has been falling against the US dollar since 2024. Ncube said the currency helped economic growth even though it weakened. He also said that the country's slower growth this year was due to climate change, not the weak currency. A weaker currency can help exporters because they make more money when they sell things overseas.

Weaker Local Currency Drives Economic Growth, Says Mthuli Ncube

Fadzayi Mahere, a Constitutional Lawyer, Law Lecturer, and Former Member of Parliament, criticised the Reserve Bank of Zimbabwe (RBZ) for insisting that the Zimbabwe Gold (ZiG) currency remains legal tender.
Advocate Thabani Mpofu stated on Monday that the ZiG lost its legal tender status on October 4, when the law that established it expired.
In response, the RBZ’s Corporate Affairs Department explained that the ZiG was established through Presidential Powers (Temporary Measures) under S.I. 60 of 2024, representing a one-time act of currency reform.
The Central Bank maintained that currency reform measures do not expire simply because the legal instrument that initiated them has lapsed. Said the RBZ:
<blockquote>
The Reserve Bank of Zimbabwe wishes to advise the public and all stakeholders that there is no gap at law regarding the Zimbabwe Gold currency.
The Zimbabwe Gold currency, (ZiG) was established through Presidential Powers (Temporary Measures) proclaimed under S.I 60 of 2024, which constitutes a one-time act of currency reform.
Currency reform measures by their nature do not lapse simply because the instrument that introduced the reforms has lapsed.
The lapsing of the Presidential Temporary Powers that established the currency does not, therefore, create a gap in the law. Legally, currency reform measures are only revoked by another legal instrument.
Meanwhile, it should be noted that The Finance Act which has since been gazetted into law, simply declares the provisions of S.I 60 of 2024 and is not meant to validate them.
Thus, ZiG remains the country’s legal tender, and the Reserve Bank will continue to consolidate its use and stability.
</blockquote>
Commenting on the RBZ’s statement, Mahere said the central bank should have remained silent instead of providing an incoherent and legally unsound response. She posted on X:
<blockquote>
Dai mangonyarara henyu. If you have a legal department, I’m sure they were not involved in the crafting of this notice. You concede that the legal basis for your zigzag has lapsed yet you suggest that the currency remains legal tender? How? What do you mean when you say the Finance Act declared the provisions of SI 60/24 but doesn’t validate them? So what does it do? What law is that?
This is embarrassing. We need new leaders.
</blockquote>
In another post, Mahere said the law establishing the ZIG had a 6-month lifespan, and since that period has elapsed, there is no longer any legal basis for the ZIG. She wrote:
<blockquote>
The law that created the ZIG had a 6 month lifespan. 6 months have since passed and there’s no longer any legal basis for the ZIG. It is invalid. It is not *legal* tender.
You don’t enact monetary laws by way of a press release or public notice from the Central Bank.
Legislation must be duly promulgated in line with the constitutionally-mandated law-making process.
Until this is done, the whole country is just playing one big game of Monopoly.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Fadzayi Mahere said RBZ is wrong to say ZiG is still legal tender. ZiG legal status expired on Oct 4. RBZ says ZiG was made legal currency by a law that has ended, but currency reforms don't end with the law. Mahere says there is no legal basis for ZiG now. The Finance Act does not validate ZiG. Mahere wants new leaders. She says laws need to be properly made. RBZ should stay quiet if they are not sure. Until ZiG is made legal properly, it's like playing Monopoly.

Mahere Critiques RBZ's Stance On ZiG Legal Tender Status

The Reserve Bank of Zimbabwe (RBZ) has affirmed that the Zimbabwe Gold (ZiG) currency remains legal tender and will continue to strengthen its use and stability.
This statement follows comments from prominent lawyer Advocate Thabani Mpofu, who said on Monday that the ZiG lost its legal tender status on October 4, when the law that established it expired. He said:
<blockquote>
As of October 4, 2024, the statutory instrument that introduced the ZIG currency expired without extension. Consequently, from October 5, 2024, the ZIG ceased to be a valid currency in Zimbabwe, leaving the US dollar as the sole currency.
In a belated but incompetent attempt, authorities tried to revive the ZIG through the Finance Act on Sunday, October 27, 2024 (This had been hinted on in the Friday Gazette but the Act had not been published). However, this effort was futile since the ZIG had already lost its validity.
Moreover, Section 21 of the Finance Act’s attempt to retroactively validate the ZIG is unlawful, as it contradicts Section 6 of the Presidential Powers (Temporary Measures) Act.
The explicit reference to the expired statutory instrument in Section 21 only reinforces this illegality in that it establishes the connection between the S.I. and the Act (A clever person would have avoided that connection).
</blockquote>
However, in a statement issued on Monday evening, the RBZ said the ZiG was established through Presidential Powers (Temporary Measures) under S.I. 60 of 2024, representing a one-time act of currency reform.
The Central Bank insisted that currency reform measures do not expire simply because the legal instrument that initiated them has lapsed. Reads the statement:
<blockquote>
The Reserve Bank of Zimbabwe wishes to advise the public and all stakeholders that there is no gap at law regarding the Zimbabwe Gold currency.
The Zimbabwe Gold currency, (ZiG) was established through Presidential Powers (Temporary Measures) proclaimed under S.I 60 of 2024, which constitutes a one-time act of currency reform.
Currency reform measures by their nature do not lapse simply because the instrument that introduced the reforms has lapsed.
The lapsing of the Presidential Temporary Powers that established the currency does not, therefore, create a gap in the law. Legally, currency reform measures are only revoked by another legal instrument.
Meanwhile, it should be noted that The Finance Act which has since been gazetted into law, simply declares the provisions of S.I 60 of 2024 and is not meant to validate them.
Thus, ZiG remains the country’s legal tender, and the Reserve Bank will continue to consolidate its use and stability.
</blockquote>
Meanwhile, Corban Madzivanyika, the Member of Parliament for Mbizo and a member of the CCC, has called on the RBZ to clarify the basis for its assertion that currency reform measures can only be revoked by another legal instrument. He said:
<blockquote>
Kindly specify the law that allows currency reform measures to remain in force even after the expiry of the Presidential powers (Temporary measure) SI 60 of 2024. Which law says currency reform measures can only be revoked by another legal instrument? Explain well to us.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The RBZ says ZiG currency is still legal tender, despite a lawyer saying it lost its status. The Central Bank says the ZiG currency was established through a one-time currency reform act, so it remains valid. The RBZ explains that currency reform measures do not expire just because the law that started them ended. The RBZ will continue to make ZiG stronger and more stable. Some people are questioning the RBZ's explanation and asking for clarification on the laws that support this decision. So, for now, ZiG remains Zimbabwe's legal tender.

ZiG Currency Remains Legal Tender - RBZ

Top lawyer Advocate Thabani Mpofu said the Zimbabwe Gold (ZiG) ceased to be a valid currency as of October 5, 2024.
He criticised the government’s recent attempt to revive the currency through the Finance Act on Sunday, October 27, calling it futile since the ZiG had already lost its validity.
In a post on his X (formerly Twitter) account, Mpofu urged the government to acknowledge its mismanagement of the currency issue and take corrective action. Said Mpofu:
<blockquote>
As of October 4, 2024, the statutory instrument that introduced the ZIG currency expired without extension. Consequently, from October 5, 2024, the ZIG ceased to be a valid currency in Zimbabwe, leaving the US dollar as the sole currency.
In a belated but incompetent attempt, authorities tried to revive the ZIG through the Finance Act on Sunday October 27, 2024 (This had been hinted on in the Friday Gazette but the Act had not been published). However, this effort was futile since the ZIG had already lost its validity.
Moreover, Section 21 of the Finance Act’s attempt to retroactively validate the ZIG is unlawful, as it contradicts Section 6 of the Presidential Powers (Temporary Measures) Act.
The explicit reference to the expired statutory instrument in Section 21 only reinforces this illegality in that it establishes the connection between the S.I and the Act (A clever person would have avoided that connection).
This is a festival of illegalities and absurdities. Government should take responsibility, apologize and implement a lawful solution – one that fortunately exists.
</blockquote>
An economist who spoke to <a href="https://www.newsday.co.zw/local-news/article/200034212/zim-runs-with-expired-currency">NewsDay</a> on Sunday night suggested that the government’s “inertia” indicates a deliberate effort to sabotage the ZiG. Said the expert:
<blockquote>
The inertia shows that government is sabotaging the ZiG. A country that wants to promote the use of a local currency under the de-dollarisation roadmap should not be making these schoolboy blunders.
What will government do if shops refuse accepting the ZiG? We are skating on thin ice and the sooner we act, the better.
</blockquote>
The local currency has undergone six name changes but has yet to achieve stability, confidence, trust, or sustainability.
Its previous iterations include the original currency post-independence, that is, the Zimbabwe dollar, then later bearers’ cheques, traveller’s cheques, bond notes, RTGS dollars, and now ZiG.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The government must admit that the currency ZiG is no longer valid and take action to fix the problem according to lawyer Thabani Mpofu. The Finance Act's attempt to revive ZiG is pointless because the currency lost validity on October 5, 2024. An economist believes the government's inaction is deliberate sabotage of ZiG. Zimbabwe has had many currency changes but none have been stable, trusted, or sustainable. It is important for the government to acknowledge their mistakes and implement a lawful solution to the currency issues.

"Government Must Admit ZiG Lost Validity And Take Corrective Action"

The Zimbabwe Gold (ZiG) currency is no longer considered legal tender, as the law governing it lapsed on October 4, according to top lawyer Advocate Thabani Mpofu.
Introduced on April 5, 2024, the gold-backed currency was the country’s sixth attempt to establish a stable monetary system in the past 15 years.
Mpofu said on Saturday that the ZiG has officially lost its status as legal tender, leaving questions about the implications for the economy and the future of currency in Zimbabwe. Mpofu posted on X:
<blockquote>
Unless I missed the law when it was promulgated, the ZIG is no longer currency.
The ZIG was operationalised by the promulgation of the Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act and Issue of Zimbabwe Gold Notes and Coins) Regulations, 2024.
By law, a statutory instrument promulgated in terms of the Presidential Powers Act lapses at the end of 6 months unless prior to its lapse, the instrument is validated by primary legislation.
In this case, the 6 months would have lapsed on the 4th of October 2024. This means that by the end of that day, the ZIG ceased to be currency.
It is not possible for the statutory instrument once it has lapsed to be validated by legislation. Further, the statutory instrument having lapsed no further regulations identical to the lapsed ones can be promulgated within 6 months of such lapse.
This means that no Statutory Instrument extending the life of ZIG can be issued in terms of the Presidential Powers Act.
For these reasons, the ZIG is no longer legal tender. The consequences are immense. I think we have a big problem on our hands. (I sincerely hope for the life of me that the authorities did the needful. If they didn’t, this needs to be fixed by the only lawful way available).
</blockquote>
Former Finance Minister Tendai Biti agreed with Advocate Mpofu that the ZiG is no longer legal tender. He said:
<blockquote>
Advocate Thabani Mpofu is 100% correct. ZiG is no longer a currency because the six months have lapsed.
So, Parliament must amend the the Reserve Bank of Zimbabwe Act for the ZiG to become a currency not the President.
</blockquote>
According to <a href="https://www.newsday.co.zw/local-news/article/200034212/zim-runs-with-expired-currency">NewsDay</a>, the government has been working on new legislation to support the introduction of the ZiG, anticipating the lapse of the statutory instrument after six months. The Finance Bill H.B. 8, 2024, amends existing laws to facilitate the introduction of the ZiG.
The Bill states that ZiG notes and coins will be recognized as official currency under section 44D (2) of the Principal Act.
It passed through the Senate about two weeks ago and now awaits President Emmerson Mnangagwa’s signature to become law.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The ZiG currency in Zimbabwe is no longer considered legal money because the law that allowed it to be currency expired on October 4th. This was the sixth attempt in 15 years to create a stable currency system. A top lawyer named Advocate Thabani Mpofu confirmed this. Unless Parliament makes new laws, the ZiG can't be used anymore. The government is working on new laws to make ZiG legal again. Once these new laws are approved, ZiG notes and coins will be accepted as money again. President Emmerson Mnangagwa needs to sign these new laws first.

ZIG Ceased To Be Legal Tender On 04 October - Top Lawyer

The International Monetary Fund (IMF) has said Zimbabwe cannot resolve its economic challenges with the gold-backed ZiG currency, which was launched in April and has already been devalued.
In an interview with <a href="https://www.bnnbloomberg.ca/investing/2024/10/25/imf-cautions-zimbabwes-gold-backed-zig-cant-fix-deeper-issues/">Bloomberg</a>, IMF Africa Department Director Abebe Selassie said:
<blockquote>
There’s a tendency to see the market rate, the exchange rate, as the cause of the problems countries face.
In reality, the exchange rate is often the symptom and the root cause of exchange-rate weakness tends to be inflation.
</blockquote>
ZiG, short for Zimbabwe Gold, represents Zimbabwe’s sixth attempt to establish a stable local currency since 2009, following previous failures due to rampant inflation.
The ZiG was designed to restore confidence through its backing by gold and hard currency reserves, along with a central bank pledge to avoid past mistakes.
However, last month, the Reserve Bank of Zimbabwe (RBZ) devalued the ZiG by 43%, further eroding the already fragile trust Zimbabweans had in the currency. Said Selassie:
<blockquote>
Sadly, Zimbabwe has gone through these various cycles and the root cause is really the lack of confidence, the lack of faith in monetary and fiscal policy.
It goes back to brass tacks and needing to address those root causes, and that’s the only source of closing the gap that we would be able to see.
</blockquote>
On Friday, the ZiG was quoted at 27.68 per dollar on the official market, according to the central bank’s website.
The unofficial rate, however, ranged between 40 and 50 to the dollar, as reported by ZimPriceCheck.com.
The Zimbabwe National Statistics Agency (ZIMSTAT) announced that monthly inflation surged to 37.2% in October, up from 5.8% in the previous month, driven by the devaluation of the ZiG.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The International Monetary Fund (IMF) says Zimbabwe's gold-backed ZiG currency won't solve economic problems. ZiG was devalued by 43% last month, causing more trust issues. Inflation is the real problem, not the exchange rate. This is Zimbabwe's sixth attempt at a stable currency since 2009. The ZiG was supposed to restore confidence but failed. IMF Director Selassie says Zimbabwe needs to address lack of confidence in monetary and fiscal policies to fix the gap. Inflation surged to 37.2% in October due to ZiG's devaluation. Unofficial exchange rates are worse at 40-50 per dollar.

ZiG Not The Answer To Zimbabwe's Economic Challenges, Says IMF

Business leaders have urged the government to ditch the local currency, the Zimbabwe Gold (ZiG), which is increasingly losing its value, reported <a href="https://businesstimes.co.zw/ditch-zig-ceos/">Business Times</a>.
They argue that this devaluation is hurting businesses and threatening the viability of local companies.
The call comes as the government continues its strict enforcement of exchange rate regulations, including threats to revoke licenses of non-compliant businesses.
On Wednesday, October 23, Oswell Binha, chairman of the CEO Africa Roundtable, called for the removal of the ZiG from Zimbabwe’s basket of currencies. Said Binha:
<blockquote>
(As CEOs) we are calling for the immediate removal of the ZiG from the basket of currencies, allowing other currencies to trade until such time we stop arbitrage.
We sit here as decision-makers superintending over a country that cannot manage its own currency. We have a lot of cycles of value erosion, and we continue doing this and expect a difference.
We gather here amid scepticism about the ZiG due to the government’s history of printing (money). All we yearn for is for a currency that is capable of preserving value. Now we have the ZiG which is collapsing like a deck of cards.
Our authorities have proven beyond any reasonable doubt that they are incapable of managing our own currency. Instead, the local currency has been a tool for arbitrage in the economy.
It is no longer benefiting us anymore to be formal, we are too small as organised businesses to support the huge informalisation sector burden that the government is placing on us.
</blockquote>
William Mandisodza, the CEO of the Institute of Chartered Accountants of Zimbabwe (ICAZ), said:
<blockquote>
I am going to speak on behalf of the accountants, any variation above 5% is material and talking of 40% currency depreciation is a crisis in accounting. We are in a crisis.
Our role is to provide financial information or report economic transactions in a currency of choice. If a person is measuring economic performance in ZiG his or her results up to August 1, 2024, are over 40%, that’s a crisis in our (accountancy) profession.
I also want economists and the public to honestly look at the operating landscape we have and remove words like speculation and saboteurs.
When I am doing the work, I am employed to do and someone says I am speculating and I am a finance director to preserve the value of the shareholders, I will not take it lightly.
We are not speculators but preservers of value. For us, we don’t use the inflation data for the past, but we use inflation expectation.
We do this to replace the stock that I would have sold. If we use the past inflation, we will not be able to stock.
</blockquote>
Economist and banker, Nigel Chanakira, who is also the past president of the Zimbabwe Economic Society, said:
<blockquote>
What triggered what we are calling a crisis? We call it a crisis because we have a new currency that has features that promise us stability.
We have a new governor who said bad policies will not be done under my watch. I gave him the benefit of the doubt.
Only five months since the introduction, we have experienced a more than 40% devaluation of the ZiG. I think it’s astronomical.
</blockquote>
The value of ZiG plummeted in September this year, from ZWG13:US$1 dropping to ZWG27.44 to the US dollar on Thursday, 24 October. On the parallel market, ZiG is currently trading between ZWG40 and ZWG50 to the US dollar.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Business leaders want the government to get rid of the Zimbabwe Gold (ZiG) currency because it's losing value. They say it's hurting businesses. The CEO Africa Roundtable chairman said the ZiG should be removed from Zimbabwe's currencies. The CEO of the Institute of Chartered Accountants of Zimbabwe said a 40% drop in currency value is a crisis. The value of ZiG dropped a lot recently. Some experts feel the government is not managing the currency well. The business community is worried and wants the government to make changes.

Business Community Urges Government To Abandon Failing ZiG Currency

The government plans to mandate that most taxes and fees be paid exclusively in Zimbabwe Gold (ZiG) currency to increase demand and stabilise its value.
This was said by Finance, Economic Development and Investment Promotion Minister Mthuli Ncube during a dialogue with development partners in Harare on Wednesday. Said Ncube:
<blockquote>
Already, customs duties are now payable in local currency. Going forward and in line with the de-dollarisation roadmap, other taxes will also be paid exclusively in local currency, including payment for government services.
</blockquote>
However, most Zimbabweans believe that confidence in the ZiG currency would increase if essential items like fuel and services such as passport fees were payable in the local currency.
According to Reserve Bank of Zimbabwe (RBZ) governor John Mushayavanhu, the ZiG is supported by US$450 million in foreign reserves as of October 10, 2024.
Since its introduction in April, the ZiG has depreciated from US$1: 13.5616 to US$1: 26.6718 as of October 16.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The government wants people to pay taxes and fees in Zimbabwe Gold (ZiG) to make the currency stronger and more valuable. Finance Minister Mthuli Ncube said this during a meeting. Right now, only customs duties can be paid in local currency, but soon all taxes may be paid that way. People want essential things like fuel and passport fees to also be paid in ZiG. The currency is supported by $450 million in reserves. Since it started, ZiG's value has gone down. The government hopes this change will help the economy.

Taxes And Fees To Be Paid Exclusively In ZiG - Mthuli

Zimbabwe’s currency woes persist as retailers continue to implement a three-tier pricing system for products, that is, three different prices for the same product based on the payment method.
The local currency, the ZiG, was introduced on April 5, 2024, and initially performed well, but its value declined significantly after four months due to widening parallel market rates.
In September, the Reserve Bank of Zimbabwe intervened by devaluing the currency by 43% and increasing interest rates to curb speculative borrowing.
However, a recent survey by <a href="https://www.newzimbabwe.com/zimbabwes-gold-backed-zwg-currency-still-in-the-woods-as-retailers-insist-on-three-tier-pricing/">NewZimbabwe.com</a> revealed that many retailers in Harare’s Central Business District are still facing challenges with the local currency.
Retailers demand exclusive US$ prices for certain products while maintaining the three-tier pricing strategy based on the payment method.
Some retail outlets continue to limit the number of products that can be paid for in ZWG currency, complicating local currency purchases.
The local currency has undergone six name changes but has yet to achieve stability, confidence, trust, or sustainability.
Its previous iterations include the original currency post-independence, that is, the Zimbabwe dollar, then later bearers’ cheques, traveller’s cheques, bond notes, RTGS dollars, and now ZiG.
Launched on April 5, ZiG is already experiencing a similar trajectory toward collapse and freefall just five months later.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Retailers in Zimbabwe are still using three-tier pricing for products, based on how they are paid for. The local currency, ZiG, started strong but lost value due to market rates. The Reserve Bank tried to help by devaluing the currency and increasing interest rates. Retailers in Harare still struggle with the local currency. Some only accept US$ for certain products. The currency has changed names six times but is still unstable. ZiG is already facing collapse, just five months after it started.

Retailers Persist With Three-Tier Pricing As ZiG Falters

The Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu has said the gold reserves backing the ZiG (Zimbabwean Gold) currency have increased to over US$450 million, up from US$375 million in June this year.
He said this increase in gold reserves means the exchange rate will remain stable.
On September 27th, the RBZ adjusted the official exchange rate from ZiG14 per US$1 to ZiG24 per US$1.
However, by October 11th, the exchange rate had slid to ZiG26.33 per US$1, indicating a continued devaluation of the local currency since the initial adjustment.
In an interview with <a href="https://www.zbcnews.co.zw/rbz-assures-zimbabweans-of-currency-stability/">ZBC News</a> on Thursday, 10 October, Mushayavanhu said that the recent exchange rate movements cannot be described as a devaluation, but rather a response to market forces within the willing buyer and seller foreign exchange market. He said:
<blockquote>
First and foremost, what happened can not be described as devaluation. It was just a manifestation of the event on the ground where the parallel market had just set its agenda, including the retail sector and all the other economic agents in the economy.
</blockquote>
Mushayavanhu said the RBZ remains committed to economic stability and anchoring growth and does not expect any further significant movements in the exchange rate. He said:
<blockquote>
I am not expecting any further movements in the exchange rate. Let me give you some figures. As of yesterday, total deposits in this whole market were ZiG10.7 billion reserves, and our foreign reserves were US$450 million.
</blockquote>
Mushayavanhu further clarified the distinction between a gold-linked and a gold-backed currency.
He said the ZiG is backed by gold and other precious metal reserves, as well as foreign currency balances held with the Federal Reserve. Said the RBZ Governor:
<blockquote>
Our currency is backed by gold and other precious metals, and the foreign currency balances that we have with the Federal Reserve, there is a difference between backing a currency with gold and linking a currency to the prices of gold.
</blockquote>
Meanwhile, economic commentator Professor Gift Mugano has expressed scepticism about the RBZ’s ability to stabilise the exchange rate.
According to Mugano, the central bank lacks control over the excessive liquidity being injected into the economy by the Treasury.
Mugano predicted that in the coming weeks, several factors will contribute to further exchange rate volatility. Firstly, the government will be funding the upcoming agricultural season, which requires significant financial resources.
Secondly, there will be bonus payments and increases in ZiG (Zimbabwean Gold) salaries. Thirdly, the government will be increasing payments to contractors ahead of the rainy season.
Finally, the Treasury will be making last-minute payments to ministries, departments, agencies, and suppliers before the end of the fiscal year, as is typically the case in December.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The Reserve Bank of Zimbabwe has a lot of gold to support the ZiG currency, worth over US$450 million. The exchange rate will stay stable because of this. The official exchange rate was adjusted recently, but it has been falling again. The RBZ Governor thinks that the exchange rate won't change much more. But some experts are not sure the RBZ can keep it stable because there is too much money in the economy. They think that the exchange rate might change a lot soon because the government needs to pay for many things.

ZiG Currency Gold Reserves Reach US$450 Million - RBZ

The Reserve Bank of Zimbabwe (RBZ) has injected an additional $50 million into the market. This latest injection follows previous interventions by the central bank, which poured $64 million into the market in September and $50 million in August, reported <a href="https://www.businessweekly.co.zw/rbz-intervenes-again-with-forex-to-cool-the-market/">Business Weekly</a>.
This comes after the central bank recently devalued the Zimbabwe Gold (ZiG) currency by 43%.
RBZ Governor John  Mushayavanhu said the RBZ will persist with its market interventions to support the willing-buyer willing-seller foreign exchange system. Said Mushayavanhu:
<blockquote>
The RBZ will continue to intervene in the market to augment the willing-buyer willing-seller market so as to ensure that all bona fide forex requirements are met. Last week we intervened to the tune of US$50 million but only US$34 million was bought.
</blockquote>
However, captains of industry interviewed by Business Weekly said the central bank is not doing enough to facilitate the smooth operation of the foreign currency market.
Kurai Matsheza, the former president of the Confederation of Zimbabwe Industries (CZI), said that while there may be multiple reasons for the low uptake, industry has various demands that require access to foreign currency. Said Matsheza:
<blockquote>
The money was released and available to our members, but what we are sure of is that the pipeline demand for foreign currency is much more than the figure that is being said. So it might be an issue of other measures of control by the Bank that has reduced demand.
</blockquote>
He suggested that one reason for the reduced uptake of foreign currency is the policy stating that a company cannot bid for foreign currency if it has existing nostro balances.
Matsheza confirmed that any company with foreign currency in its accounts is automatically disqualified from submitting a bid. He said:
<blockquote>
Yes, the meeting was held, and recommendations were made that the measure should be removed as companies hold foreign currency for different reasons.
It might be for obligations that are to be settled in a week or 10 days’ time and for some, it can be for capital expenditure which is budgeted for.
</blockquote>
Matsheza said stakeholders told the RBZ that members do not go to the market without a genuine cause.
Tapiwa Karoro, the president of the Zimbabwe National Chamber of Commerce (ZNCC), said:
<blockquote>
The US$50 million injection means that the RBZ is willing to keep the market well-oiled and our members have not yet said anything about being prevented from accessing the money on the market.
So, we should not speculate why the market uptake was not equal to the injection, because we cannot know the exact demand in a week.
</blockquote>
Industrialist Sean Muzangwa stated that although the recent forex injections by the RBZ have been beneficial, additional support is necessary to rebuild industrial confidence. Said Muzangwa:
<blockquote>
The RBZ’s actions are commendable, but what we need now is policy consistency. If businesses are to plan, they must be confident that the rules of the game will not change unexpectedly. Only then can we expect sustained growth and a stable currency.
Industries are struggling with delays in accessing foreign currency, which affects production timelines.
The RBZ must streamline its processes and reduce bureaucratic hurdles to ensure that the economy runs smoothly.
A responsive, agile system is critical to restoring confidence and keeping industries productive.
</blockquote>
Economist Gladys Shumbambiri-Mutsopotsi contended that although the RBZ’s intervention has offered temporary relief, the overall effect on the economy will hinge on implementing structural reforms. She said:
<blockquote>
Stabilising the exchange rate without addressing underlying issues like inflationary pressures and market confidence, is a short-term solution.
To ensure long-term stability, we need deeper fiscal discipline and enhanced transparency in the forex market…
The key issue right now is communication. The RBZ must clearly outline its long-term plan for the currency market.
Without a clear roadmap, market participants will remain cautious, and this will continue to hinder the efficient allocation of foreign currency.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The Reserve Bank of Zimbabwe put $50 million into the market to help it be stable. They previously put in $64 million in September and $50 million in August. The bank recently made Zimbabwe's currency less strong, causing a 43% drop in value. The bank will continue to help the market so people who want to buy and sell foreign money can do so easily. Some business leaders think the bank needs to do more to help the market work well. They want clearer rules and less bureaucracy. Experts say more changes are needed to make sure the market is stable in the long run.

RBZ Injects Additional $50 Million To Stabilise Market

President Emmerson Mnangagwa has said the adoption of the Zimbabwe Gold (ZiG) in April 2024 was a significant move towards stabilising the domestic currency.
The Zimbabwe Gold currency was launched on April 8, replacing the Zimbabwean dollar, which had depreciated by 80% in the first three months of 2024.
During the opening of the Second Session of the 10th Parliament at the Parliament Building in Mt Hampden this Wednesday, Mnangagwa said that the Reserve Bank of Zimbabwe has introduced greater flexibility in the willing-buyer willing-seller arrangement to encourage foreign currency holders to engage in the forex market. He said:
<blockquote>
Currency stabilisation is at the core of macroeconomic stability. The adoption of the Zimbabwe Gold (ZiG) in April 2024, was an important step towards stabilising the domestic currency anchored by our gold and precious metal reserves. It remains the duty of all of us to respect and abide by measures and instruments intended to maintain economic stability and tame inflation.
In response to the increased foreign currency pressures, and in a bid to deepen the foreign exchange market, the Reserve Bank allowed for greater flexibility under the willing-buyer willing-seller arrangement.
The increased flexibility on the foreign exchange market is expected to further promote effective price discovery and encourage holders of foreign exchange to participate in the willing-buyer willing-seller market.
</blockquote>
Mnangagwa also said the government is committed to supporting the currency by allocating 50% of royalties to build reserves.
The President disclosed that foreign currency inflows from exports have risen from US$7 billion in 2023 to US$8 billion in 2024. He added:
<blockquote>
Our country’s banking sector is on sounding footing, with sufficient capital and liquidity buffers, while profitability, asset quality and liquidity matrix have also remained stable.
However, we note with concern the resurgence of parallel market activities driven by speculative tendencies.
Corrective measures are being instituted to protect all Zimbabweans from economic disruptions.
</blockquote>
Launched in April 2024 at an initial rate of ZiG13.50 to US$1, the ZiG was initially presented as a remedy for Zimbabwe’s ongoing economic crisis. However, it has experienced significant devaluation on the black market.
On September 27, the RBZ set the official exchange rate at ZiG24.3 per US$1, up from ZiG14.1 per US$1.
As of October 2, 2024, the official ZiG rate against the US dollar was ZiG25.2 per US$1, according to the central bank’s website.
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The President of Zimbabwe, Mnangagwa, says using ZiG gold as currency helps stabilize money. The new currency replaced the old Zimbabwean dollar that lost value. The Reserve Bank of Zimbabwe allows more flexibility in buying and selling foreign currency. The government supports the currency by saving royalties. More money is coming in from exports. Banks are strong, but the black market is a problem. The official exchange rate for ZiG to US$ went up. The official rate on Oct 2 was ZiG25.2824 per US$1.

ZiG Launch Key To A Stable Domestic Currency - Mnangagwa

The Zimbabwe Congress of Trade Unions (ZCTU) has criticized the Reserve Bank of Zimbabwe for unilaterally devaluing the Zimbabwean Gold (ZiG) currency without considering its impact on workers and ordinary citizens.
In a statement issued on Tuesday, October 1, ZCTU Acting Secretary General Kudakwashe Munengiwa said the ZiG has been devalued by over 44%.
He said this devaluation has reduced workers’ earnings, leaving them financially vulnerable, especially as many shops charge double prices for ZiG transactions.
Munengiwa condemned the government’s reluctance to engage with workers and businesses through the Tripartite Negotiating Forum (TNF), in violation of Section 13(2) of the Constitution, which mandates the government to involve citizens in development plans that affect them. He added:
<blockquote>
We would like to note that RBZ has been taking people for granted for quite some time now when introducing a new currency.
When it introduced the bond notes in 2016 RBZ claimed that the bond notes were adequately backed by lines of credit from Afreximbank and that the 1:1 exchange rate between the USD and RTGS$ were also backed by adequate lines of credit.
Lately, they also claimed that the ZiG was adequately backed by gold. These all have proved to be false guarantees as the local currency could not hold against the USD and other foreign currencies.
</blockquote>
Munengiwa said the government’s fiscal mismanagement and high inflation have significantly contributed to the devaluation of the ZiG, urging the government to take responsibility for the currency’s decline.
He asserted that workers are now earning in a rapidly depreciating currency that fails to fulfil basic economic functions, adversely affecting their earnings, pensions, and insurance.
Munengiwa urged employers to pay a substantial portion of wages in USD to support workers.
He also called on the government to establish a minimum wage in USD to protect vulnerable workers and ensure fair compensation to combat poverty and reduce inequality, including gender disparities.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The ZCTU is unhappy with the RBZ for reducing the value of the ZiG currency by 44%, making it harder for workers to earn enough money. The government didn't talk to workers first, which is not fair. The RBZ has made false promises about the currency in the past. The government needs to take responsibility for the currency losing value. Workers should be paid in USD to help them. The government should also set a minimum wage in USD to ensure fair pay and reduce poverty.

ZCTU Slams RBZ For Unilateral Devaluation ZiG Currency

Some supermarkets, vendors, commuter omnibus operators, and tuckshops are reportedly rejecting payments in the ZiG currency following a 43% devaluation effected by Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu on Friday.
As a result, traders are now only accepting payments in USD, leaving many Zimbabweans, who have previously lost savings due to currency changes, in a difficult position.
A tuckshop operator in Dzivarasekwa Extension, Harare, told <a href="https://www.newzimbabwe.com/market-rejects-zwg-as-central-bank-governor-defends-devaluation-of-new-currency/">NewZimbabwe.com</a>, “We don’t know what exchange rate to use, making it hard for us to continue accepting the ZiG. What if we accept it and it loses value while in my possession?”
Some transport routes that previously charged ZiG10 now cost US$1, as operators fear that the coins will be dumped on them.
Critics argue that the Zimbabwean government has effectively rejected its own currency from the start, as the ZiG cannot be used for essential transactions like passport applications, customs duties, rentals, or fuel purchases.
Introduced in April 2024 at a rate of ZiG13.50 to US$1, the ZiG was initially promoted as a solution to Zimbabwe’s ongoing economic crisis, but it has since seen heavy devaluation on the black market.
On September 27, the RBZ set the official exchange rate at ZiG24.3 per US$1, up significantly from ZiG14.1 per US$1.
In an interview with the state-controlled Sunday Mail newspaper, RBZ Governor John Mushayavanhu explained that the devaluation was in response to an artificial spike in demand for foreign currency and inflationary pressures.
Meanwhile, journalist and government critic Hopewell Chin’ono remarked, “The Zimbabwean local currency is now dead, as many local retailers are pricing exclusively in US dollars to avoid losses.” He added:
<blockquote>
When a local currency loses its value and citizens have no confidence in it, this outcome is inevitable.
The Zimbabwean government rejected its own currency from day one for transactions such as passport applications, customs duties, fuel, and more.
When a government rejects its own currency, it would be irrational for anyone else to have confidence in it.
This is precisely what is happening, compounded by excessive money printing to facilitate the looting of public funds.
When a government itself does not demonstrate faith in its own currency, it sends a clear signal to the public that the currency is neither reliable nor stable.
The lack of confidence in the local currency has led to the dollarisation of the economy, with Zimbabweans preferring a more stable currency, like the US dollar, for transactions and as a store of value.
You can’t blame them, Zimbabweans have been scammed four times by the corrupt ZANU PF regime, losing all their savings.
This time around, they have lost half of their savings that were in the local ZIG currency.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The Reserve Bank of Zimbabwe (RBZ) devalued the ZiG currency by 43%, causing many businesses to reject it. Instead, they only accept USD, leaving Zimbabweans in a tough spot. People fear the ZiG losing value and are choosing USD for transactions. The Zimbabwean government has not supported the ZiG for essential transactions. Many believe the local currency is now dead, with citizens preferring USD. This lack of confidence comes from past experiences where Zimbabweans lost savings due to currency changes. Government critics blame corruption and lack of faith in the ZiG for this situation.

RBZ's 43% Devaluation Leads To Widespread Rejection Of ZiG Currency

Zimbabwe’s gold-backed currency, the ZiG, which was devalued by 43% by the Reserve Bank of Zimbabwe (RBZ) on Friday, September 27, continued to decline against the United States dollar on Monday.
According to data on the central bank’s website, the ZiG was quoted at 24.88 per dollar, up from 24.39 on Friday.
On Friday, September 27, the RBZ set the official exchange rate at ZiG24.3 per US$1, a significant increase from ZiG14.1 per US$1.
Lyle Begbie, an economist at Oxford Economics, said that while recent adjustments are positive, they are unlikely to be sufficient.
He added that ongoing current account and fiscal deficits, coupled with limited access to external capital markets, will continue to exert significant pressure on the ZiG currency.
RBZ Governor, John Mushayavanhu, in an interview with the state-controlled Sunday Mail newspaper, said that the devaluation was necessitated by an artificial spike in demand for foreign currency, combined with inflationary pressures. He said:
<blockquote>
The underlying value of the structured currency (ZiG) is designed to mimic the movement in the prices of reserve assets backing it and the inflation differentials.
In this regard, as communicated in the April 2024 Monetary Policy Statement, the intervening exchange rate shall be determined by the inflation differential between ZiG and USD inflation rates and the movement in the price of the basket of precious minerals held as reserves.
In this regard, while the gold price has been firming, suggesting appreciation of the gold price-implied exchange rate, the country has witnessed increased inflationary pressures as evidenced by month-on-month inflation of 1,4 per cent in August 2024 and 5,8 per cent in September 2024, thus offsetting the firming gold price.
This has, therefore, underscored the need for a price discovery mechanism to align the exchange rate with the macroeconomic dynamics underpinning the structured currency.
The movement in the exchange rate is expected to play a critical shock-absorbing impact on the prevailing excess liquidity in the economy, which helps anchor inflation expectations and minimise the inflation differentials going forward.
</blockquote>
The ZiG, which is supported by Zimbabwe’s gold and hard-currency reserves, was introduced in early April to replace the Zimbabwean dollar, which had plummeted by approximately 80% in value since the beginning of the year.
According to Mushayavanhu, the current reserves for the ZiG amount to US$380 million.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe's ZiG money lost value after the bank changed its value. The change happened because the ZiG wasn't worth as much as before. The ZiG lost more value against the U.S. dollar after the change. The bank explained that the ZiG's value depends on gold and other precious things they have. The ZiG replaced the old Zimbabwean dollar because it was losing value too fast. The bank hopes the ZiG will balance out the economy and keep prices stable.

ZiG Continues To Decline After Major Devaluation

Economic commentator Gift Mugano has warned the Reserve Bank of Zimbabwe (RBZ) against floating the exchange rate without adequate foreign currency reserves.
Mugano said the move by Zimbabwe’s central bank on Friday, 27 September, to liberalise the ZiG currency is “suicidal” adding that the RBZ “just put nail on the ZiG coffin.” He said:
<blockquote>
In our instance, I think we are now at a deeper end. We are in the middle of the storm, that we have adopted a local currency, we do not have enough reserves and we are supposed to liberalise.
So, it’s like committing suicide and again if you don’t liberalise you are still committing suicide again. We need to go back to the drawing board and say how do we address this.
</blockquote>
Instead of liberalising the exchange rate, Mugano suggested that the RBZ should scrap the ZiG, return to USD mono-currency, and introduce the ZiG when the time is ripe – when the right fundamentals are in place.
A Harare-based economist, who declined to be named for professional reasons, told <a href="https://www.businessweekly.co.zw/gold-backed-currency-fails-to-stem-zims-economic-challenges/">Business Weekly</a> that liberalisation and maintaining controls present significant risks, and “there is no easy solution.” Said the economist:
<blockquote>
The Reserve Bank of Zimbabwe is facing a daunting task. Liberalising the foreign exchange market could lead to hyperinflation while maintaining controls could exacerbate shortages and inefficiencies.
The Government must carefully consider the potential consequences of both options.
A poorly executed liberalisation could have disastrous consequences for the economy.
The best solution for Zimbabwe may lie in a gradual and carefully managed approach to liberalisation, combined with targeted measures to address the underlying causes of economic instability.
</blockquote>
On Friday, September 27, the central bank devalued the ZiG by over 40% against the US dollar, changing the exchange rate from 14.1 ZiG per dollar to 24.3 ZiG per dollar.
However, the RBZ has not clarified whether the currency will float freely or if it will continue to control the exchange rate after the devaluation.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Economic expert Mugano warns that Zimbabwe should not float the exchange rate without enough foreign money. He thinks doing this is like killing the ZiG currency. Mugano suggests Zimbabwe should go back to using USD only and bring back the ZiG later when everything is ready. Another economist says liberalizing or controlling the exchange rate both have risks. Zimbabwe needs to be careful and make smart decisions to avoid making things worse. The central bank devalued the ZiG by 40% on September 27, but it's not clear if they will let it float freely or control it.

Floating The ZiG A Dangerous Move, Warns Mugano

Local economist Gift Mugano has warned the government against hastily banning the current multi-currency regime and making the Zimbabwe Gold (ZiG) currency the sole legal tender.
Mugano made the comments in response to calls from some sectors to eliminate the use of the United States dollar, particularly as the local currency has experienced rapid devaluation on the parallel market just five months after its introduction. Wrote Mugano:
<blockquote>
I hear repeated calls for the introduction of mono-currency in favour of ZiG (banning USD).
My 2 cents advice is that if GoZ bans the USD it will be the biggest loser because the informal sector will not dump the USD – GoZ will lose tax in USD.
Policy only works in a formal economy. In circumstances where the informal sector is so huge, IT CANNOT WORK!
Where we are, GOZ must let USD work as a mono currency &amp; work on establishing the right fundamentals for the introduction of a local currency which inter alia include:
1. Building a productive &amp; competitive economy
2. Building foreign currency reserves averaging 6 months import cover (US$4.5 billion)
3. Fiscal consolidation – reducing public debt to levels averaging 30% of GDP
4. Stable exchange rates with distortions not exceeding 10%
5. Current account surplus
6. Single digit inflation
7. Establishment of strong institutions with enough teeth to rein corruption &amp; other social ills including fostering rule of law
8. National cohesion – credible elections, elimination of toxic politics, no crackdown of opposition &amp; weaponisation of judiciary
9. Provision of critical enablers such as affordable &amp; reliable electricity, fuel, transport (road, rail &amp; air), ICT, water &amp; sanitation, health and education.
10. Confidence – if we put in place the points I raised from 1 – 9, we will ensure that there is confidence.
This is not a walk in the park. This will not happen overnight. If we are not careful, it will take us decades to have our local currency.
Already, we have travelled 27 years with currency crisis since the Black Friday of 14 November 1997!
The challenge I give to the GoZ is to undertake a comprehensive research focused on the need to understand why our currencies are failing &amp; what needs to be done.
This is critical in view of the fact that we have lost many currencies in recent years!
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

In simple words, an economist named Gift Mugano is warning the government not to rush into banning the use of different currencies in Zimbabwe. He says if they only allow one currency, the government may lose out on tax money because people in the informal sector will keep using the US dollar. Mugano suggests the government should focus on fixing the economy before introducing a new local currency. He lists things that need to be done before a new currency can be successful. Mugano says it will take a long time and a lot of work to have a stable local currency in Zimbabwe.

Rushing To Ban Multi-Currency Regime Could Backfire, Warns Mugano

The government has been urged to abandon its “command” exchange rate and permit the Zimbabwe Gold (ZiG) currency to float freely, as the gap between the interbank foreign exchange market rate and the street rate continues to widen.
Reports indicate that the U.S. dollar is currently trading between ZiG26 and ZiG40 on the parallel market, depending on the source. As of Wednesday, September 25, it was trading at ZiG13.9912 on the interbank market.
Economist Gift Mugano argued that the command exchange rate is ineffective and called on the Reserve Bank of Zimbabwe (RBZ) to allow market forces to dictate the currency’s value against others. Said Mugano:
<blockquote>
The central bank must liberalise the exchange rate, but I understand where the central bank is coming from. So ideally, before the ZiG was launched, it was supposed to build enough reserves.
So it is like we are now in the midst of a problem, of a storm, where the right things must be done, but there is not enough place, sufficient ground created for the liberalisation of exchange rate to work.
</blockquote>
Economist Vince Museve said that the value of the ZiG is not directly related to the price of gold; instead, it is influenced by market perception and overall confidence in the currency. He said:
<blockquote>
It is clear that the value of the ZiG has nothing to do with the price of gold. It has more to do with market value perception and confidence in the ZiG.
That market is mainly informal and is not influenced by RBZ policies or pronouncements, but rather by sentiment and the general expectations whether things are getting better both economically and politically.
</blockquote>
Early this week, the Retailers Association of Zimbabwe (RAZ) warned that large-scale retailers risked shutting down as they are forced to use the official rate. It said:
<blockquote>
Suppliers of goods and services to the formal retail sector are now maintaining two-tier price lists for local currency and another for foreign currency, whose implied rates are way higher than the obtaining official exchange rate based on the banking system’s willing buyer-willing seller platform.
Our suppliers have expressed concern that they are faced with an acute foreign currency shortage and excessive volatility of ZiG exchange rates on the parallel/alternative market, which has now become the basis of their pricing framework.
</blockquote>
Economist Prosper Chitambara emphasized the importance of the government engaging with retailers to effectively address the concerns that have been raised.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Economists are saying the government should let the ZiG currency float freely to help close the gap between official and street rates. The U.S. dollar is trading at different prices in different places. Economists think market forces should decide the ZiG's value, not the government. They say the value of ZiG is more about people's confidence in it, not the price of gold. Big retailers are struggling because they have to use the official rate. Economists want the government to talk to retailers about these problems.

Economists Urge Government To Allow ZiG Currency To Float Freely

Vice President Constantino Chiwenga said that the government is monitoring financial market activities to identify ways to strengthen the Zimbabwe Gold (ZiG) currency, which has been losing value on the parallel market in recent months.
Currently, fuel service stations do not accept ZiG, and supermarkets and wholesalers are relying on street rates when selling goods in the local currency.
Speaking at the burial of national hero (Retired) Brigadier General Shadreck Ndabambi at the National Heroes Acre in Harare on Wednesday, September 4, Chiwenga, who is serving as Acting President, said the government is implementing measures to encourage the wider use of the ZiG. Said Chiwenga:
<blockquote>
No nation will develop without sovereign control, defence and growth of its own national currency. Our government introduced the Zimbabwe Gold as our new sovereign currency.
It is our responsibility as a nation to embrace and protect the new currency as a bedrock and anchor of our economic development.
Let me assure you that government is working to promote the wider use of our local currency and is putting in place measures that will eliminate gaps that are creating arbitrage opportunities in the exchange market.
Government will continue to monitor the operations of our financial markets and promote efforts to grow and stabilise our national currency.
</blockquote>
The Reserve Bank of Zimbabwe (RBZ) introduced the Zimbabwe Gold (ZiG) currency in April, following the collapse of the Zimbabwe dollar (RTGS and bond notes).
Just five months later, the new currency has experienced significant depreciation, now trading at US$1 to ZiG24 on the parallel market. At the time of its launch, the ZiG was valued at US$1 to ZiG13.50.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The Vice President said the government wants to make the ZiG currency stronger. Right now, some places don't accept it, so they use street rates to sell things. The government introduced the ZiG in April, but its value has gone down a lot since then. They want people to use the ZiG more and are working to stop prices from going up too fast. It's important for Zimbabwe to have its own strong currency to develop the country. Government will keep an eye on the financial market to help the ZiG grow.

Efforts Underway To Strengthen ZiG Currency - VP Chiwenga

Bulawayo Mayor Councillor David Coltart has called for Zimbabwe to either abandon the ZiG or exclusively adopt the US dollar and the Rand, citing significant losses incurred by local authorities and supermarkets due to exchange rate disparities.
In a post on his X page, Coltart highlighted the issues stemming from the use of an official exchange rate (US$1: ZiG13.80) compared to a street rate (US$1: ZiG24), which has led to financial losses for businesses forced to operate under the official rate.
The CCC councillor added that aside from abandoning the ZiG in favour of the USD and ZAR, the only viable alternative for Zimbabwe is to allow the ZiG to float freely without artificial rate manipulation.
Coltart’s remarks follow reports that TM Pick n Pay has permanently closed its Harare Street branch. He wrote:
<blockquote>
Last night I had dinner with a Bulawayo supermarket owner and he told me of his inability to compete with the informal sector – unlike the informal sector he has to pay taxes, rates and his staff – but most of all he is compelled to sell his goods at the official ZIG rate.
He is buying the same goods he has to sell at the official ZIG from manufacturers who sell to him with impunity at the ZIG parallel rate.
Informal traders can come to his supermarket and buy the same goods in ZIG having burned their US$ and who then sell the same for US$ at a lower price in US$ than the supermarket can sell it for, thus totally undercutting the supermarket, right outside its doors.
He doesn’t know whether he can continue – and at the root of this all is the government’s insistence that the ZIG be artificially kept at a value which bears no relation to its actual value. Tied to this is seemingly one law for retailers and another for manufacturers.
The City of Bulawayo isn’t exempt from this either. The City is forced to accept payment of rates at 13.80 at present when the real rate in the streets is 24. This is further undermining the balance sheet and general finances of Bulawayo.
Zimbabwe has been down this path created by insane policies far too often.
I have said repeatedly that a new Zimbabwean currency should only be introduced when trust in the RBZ and Ministry of Finance has been restored. It had not been when ZIG was introduced and trust has been further undermined since its introduction.
We have no choice but to abandon the ZIG again and revert to either the US$ or Rand. If we do not entire swathes of industry and the retail sector will be destroyed. The only other option is to allow the ZIG to float freely without artificial manipulation of its rate.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Supermarkets and councils in Zimbabwe are struggling because of the exchange rates. One mayor wants to stop using the local currency and switch to US dollars or South African rand. A supermarket owner said he can't compete because he has to sell goods at a low official rate, even though he buys them at a higher street rate. The City of Bulawayo is also losing money because they have to accept lower rates for payments. The mayor thinks Zimbabwe should switch to a different currency or let the local currency's value go up and down naturally. If they don't change, many businesses could fail.

Supermarkets, Councils, Chocking Under "Artificial" ZiG Rate

The Reserve Bank of Zimbabwe (RBZ) has scrapped charges for electronic cash transactions under US$10 or the equivalent in Zimbabwe Gold (ZiG) to promote digital transactions across the country.
In his 2024 Mid-Term Monetary Policy Statement on Friday, 30 August, RBZ Governor John Mushayavanhu announced that this measure will take effect on 01 September 2024. He said:
<blockquote>
To further promote the use of electronic means of payment, the Reserve Bank is, with effect from September 1, 2024, exempting electronic transactions of less than US$10 or the ZiG equivalent from bank charges.
This measure will remove the cost of using electronic means of payments by making such transactions a near-cash characteristic, consistent with the Reserve Bank’s drive towards digital cash.
</blockquote>
This decision comes amid a cash crisis in the country, stemming from a shortage of ZiG coins and notes since the new currency was introduced in April this year.
Mushayavanhu said the central bank intends to increase the circulation of lower ZiG denominations to alleviate the situation. He said:
<blockquote>
To ensure increased circulation of ZiG in the economy the following measures will be undertaken: to increase the injection of cash in line with demand while preserving the ongoing initiatives to entrench the country’s cash-lite economy; to continue to inject more small ZiG denominations into the economy to ease the problem of change and eliminate the rounding up of prices by businesses.
</blockquote>
Mushayavanhu also said the central bank is committed to enhancing the distribution and circulation of ZiG by expanding Homelink outlets in rural areas.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The Reserve Bank of Zimbabwe removed charges for small electronic transactions under US$10 to encourage digital payments. This change starts on September 1, 2024. The country is facing a shortage of cash, so the RBZ aims to boost the use of digital money. They plan to introduce more low-value coins to help with change shortages. Additionally, the central bank wants to expand the availability of electronic payment services in rural areas. These steps are meant to make it easier for people to use electronic money instead of physical cash.

RBZ Scraps Charges For Electronic Transactions Under US$10

Former Chivi South MP Killer Zivhu (ZANU PF) has derided the country’s gold-backed currency, the ZiG, claiming it has caused significant problems for Zimbabweans due to its rapid devaluation.
In recent days, social media platforms have been flooded with price stickers from supermarkets, revealing sharp increases in the cost of basic grocery items since the currency’s launch in April 2024.
For example, a 2-litre bottle of cooking oil, initially priced at around ZiG42, now exceeds ZiG70 in some stores, despite the official exchange rate changing by less than ZiG1.
These price hikes suggest that retailers are relying on the street rate, which is reportedly above US$1: ZiG20.
In a post on X, Zivhu mocked the ZiG, comparing it to petrol mixed with ethanol, which some motorists claim is of poor quality and lacks durability. Said Zivhu:
<blockquote>
Pakuda 50kg ye headache tablets kuti ukwanise kushandisa ZIG, ukarega unofa ne BP, ukapinda mu Shop ne ZIG rinopera fast kunge ethanol yatinotengeserwa tichinzi petrol, zvinhu zvacho masaramusi chete. (You need 50kg of headache tablets to be able to use ZIG, if you stop, you’ll die from BP. If you enter the shop with ZIG, it disappears fast like the ethanol sold to motorists as petrol, the stuff is just rubbish)
</blockquote>
Zivhu’s sentiments were backed by an economist, Professor Gift Mugano, who tagged government apologist Mmatigari in his comment. Mmatigari responded:
<blockquote>
So Killer Zivhu is your think tank on currencies? You are disappointing.
</blockquote>
Mugano then said Zivhu’s comments should not be ignored as he is one of the most progressive Zimbabweans”, who lives with the people and is a consumer. Wrote Mugano:
<blockquote>
[Killer Zivhu] is one of the most progressive Zimbabwean I admire. He is real. He lives with the people. He is a consumer. In this particular case of the ZiG, he gave his own experience as a consumer. If you don’t respect him/like him, that is your problem.
Zvenyu zvekungohumana izvo and carry venomous mouth everywhere hazvivaki nyika.
I submitted grounded solutions on what must be done to make ZiG succeed (check my previous posts which I posted in April). What did you do, you led a battalion of vasvasvangi on me. After I noticed that you rejected my well thought advice, I told you that ZiG will not survive.
Here we are. How is the ZiG performing? It’s a dismal performance. Companies are closing and consumers are suffering.
We have gone through 27 years of currency crisis, that is, from 14 November 1997 (the black Friday when the Zimbabwe dollar crashed). Over these years, you haven’t learnt anything as far as the drivers of the currency crisis are concerned?
If not please learn to engage in a constructive and meaningful conversation so that you can learn from experts in the field tichivaka nyika. Zimbabwe is for us all.
There are no designated shops/hospitals for the ruling party supporters nor opposition supporters. We go into the same shops/hospitals tichisvasvangwa ne economy tese.
Learn or perish
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Killer Zivhu, a former MP, criticized the new ZiG currency in Zimbabwe, saying it is causing prices to go up too quickly. He compared it to bad petrol that disappears fast. An economist named Professor Gift Mugano agreed with Zivhu and said his experience as a consumer should be taken seriously. He also urged people to learn from experts and have constructive conversations about the currency. Many people are unhappy with the ZiG currency and how it is affecting the economy and people's lives.

50kg Of Pills Needed To Cure Headache Caused By ZiG - Killer Zivhu

The use of Zimbabwe Gold (ZiG) for domestic transactions has increased to 39 per cent since its introduction in April 2024, according to a senior government official.
Speaking at the Zimbabwe Economic Society and Friedrich-Ebert Stiftung (ZES/FES) mid-term budget breakfast meeting in Harare on August 21, Finance, Economic Development, and Investment Promotion Permanent Secretary George Guvamatanga said that ZiG now represents 39 per cent of domestic transactions, up from 30 per cent in April.
He added that the remaining 61 per cent of transactions continue to be conducted in foreign currency, primarily US dollars.
Guvamatanga also highlighted that most of the local currency is being used for electronic transactions rather than physical notes and coins. He said (via <a href="https://www.herald.co.zw/zig-registers-gradual-growth-in-transactions/">The Herald</a>):
<blockquote>
To say that the ZiG is not circulating is not correct, the ZiG has been accepted in the market but it is only circulating in electronic form.
When we introduced the ZiG, the portion of transactions was 80-20 per cent and now we are at 61-39 per cent so there has been a very marked increase in the use and acceptance of ZiG, we are seeing more transactions in ZiG.
From a Government revenue perspective, it is the same. There is also movement from this 80-20 percent and now we are at 61-39 percent.
The ZiG is stable, but we just need to make sure that the smaller physical notes and coins circulate to where it is required.
</blockquote>
At the beginning of the year and throughout much of last year, the USD accounted for approximately 80 per cent of local transactions due to the rapid depreciation of the Zimbabwe Dollar.
The introduction of the ZiG has provided some stability; however, the persistent shortage of foreign currency continues to be a significant challenge for Zimbabwe’s economy.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe Gold (ZiG) is being used more for local transactions, making up 39% of all transactions. This is up from 30% in April. Most transactions are still in US dollars. ZiG is mainly used electronically rather than in physical money. The introduction of ZiG has helped stabilize the economy, but there is still a lack of foreign currency in Zimbabwe. The government is working on making sure smaller ZiG notes and coins are available. Overall, ZiG is being accepted more in the market, showing a positive trend in the country's financial situation.

ZiG Usage Now Accounts For 39% Of Domestic Transactions - Guvamatanga

Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu has said the newly introduced ZiG currency now accounts for approximately 30% of all transactions in the economy, up from 20% at the time of its introduction in April 2024.
When the ZiG was first introduced on April 5, 2024, the central bank estimated that between 80 and 85% of all transactions in the economy were settled using US dollars, with the remaining balance in the former Zimbabwean dollar, which was replaced by the ZiG.
Last week, the central bank announced it was injecting US$50 million into the interbank market to stabilise the exchange rates.
In an interview with <a href="https://www.sundaymail.co.zw/zig-now-accounts-for-30pc-of-transactions-rbz">The Sunday Mail</a>, Mushayavanhu explained that the release of foreign currency into the market was prompted by a rise in liquidity, rather than an increased demand for US dollars. Said Mushayavanhu:
<blockquote>
There was no upsurge in demand for foreign currency. Rather, there was a shift in the product pricing ratio, with the ZiG now accounting for 30 per cent of all transactions, up from the initial ratio of 80:20 in favour of the US dollar.
</blockquote>
Economist and member of the RBZ Monetary Policy Committee Persistence Gwanyanya said:
<blockquote>
There has been an increase of ZiG circulation in the economy and this has resulted in some pressures in the market.
However, this is not a negative issue; it is a good problem to have.
It shows that there is an increasing circulation of the structured currency in the economy.
We were worried when 80 per cent plus of transactions were being done in US dollars. Although it gives some form of stability, it is against what we want, which is effectively de-dollarisation.
So, when the economy is de-dollarised, the challenge related to the convertibility of ZiG is transferred to those that use US dollars for importation.
Naturally, there will be pressure on the US dollar and if it is not managed, there will be escalated volatility.
We cannot avoid this pressure because it is indicative of the trajectory we are taking of de-dollarisation, but we should not spin the market, which is exactly what we did by injecting US$50 million.
</blockquote>
Early this month, President Emmerson Mnangagwa hinted that ZiG would become the sole legal tender before the previously announced 2030 deadline to phase out the current multicurrency system.
Speaking in Mutare during the commissioning of a new fruit juice and water processing plant on 04 July, Mnangagwa said ZiG may become the sole currency as early as 2026.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The ZiG currency in Zimbabwe now accounts for 30% of transactions, up from 20% in April when it was introduced. The central bank injected US$50 million to stabilize exchange rates. The release of foreign currency was due to a rise in liquidity, not increased demand for US dollars. Economists see the increase in ZiG circulation as a positive sign, showing progress towards de-dollarization. President Mnangagwa hinted that ZiG might become the only legal currency earlier than the 2030 deadline. This change is meant to improve the economy and move away from relying heavily on US dollars.

ZiG Now Accounts For 30% Of Transactions - Mushayavanhu

The surge in black-market exchange rates, which peaked at around US$1:ZiG25 last week, has forced some businesses in Bulawayo to reject payments in the local currency.
While the official exchange rate remains at about ZiG14 to the US dollar, the soaring parallel market rate has further diminished consumer purchasing power.
According to the <a href="https://www.chronicle.co.zw/shops-continue-to-reject-zig/">Chronicle</a>, some businesses in Bulawayo have resorted to feigning network issues with their point-of-sale (POS) machines as a pretext to exclusively demand foreign currency transactions.
Specific examples include Greens Supermarket and Oceans, two retail outlets in Bulawayo that have allegedly been turning away shoppers attempting to pay electronically in the local currency, claiming their POS systems were not functional.
Mthokozisi Nkosi, the chairperson of the Consumer Protection Commission (CPC), has stated that the Commission will take action against these shops that are unlawfully rejecting the ZiG as a means of payment. Said Nkosi:
<blockquote>
We understand technology fails at times. We equally understand that it is serviceable, hence no reason to continuously claim the system is out of order.
Let these businesses be warned that we cannot be bystanders when they flagrantly violate consumer laws.
The law is clear that we are in a multi-currency regime and consumers have a choice on which currency to use as they transact.
We are coming after these unscrupulous businesses. Our Bulawayo office is going to be descending on these rogue elements.
We strongly warn them to stop this practice forthwith.
</blockquote>
Confederation of Zimbabwe Retailers president Denford Mutashu said retailers and wholesalers should accept the ZiG. He said:
<blockquote>
As CZR, we continue to urge retailers and wholesalers to accept ZiG and not inconvenience customers as we continue to work with the Government in addressing the supply chain challenges impacting sector players negatively.
</blockquote>
According to economist Prosper Chitambara, the surge in parallel market exchange rates is a clear indication that businesses are struggling to access adequate foreign currency through official channels. Said Chitambara:
<blockquote>
From conversations with people in business they are saying that it is difficult to access foreign currency at the interbank market, so there is a strong demand for US dollars by businesses that are not satisfied by the interbank market.
This creates a lot of pressure on the exchange rate. If one fails to access forex for legitimate business on the interbank market, one is forced to seek recourse to the black market.
</blockquote>
Last week, the Ministry of Finance, Economic Development, and Investment Promotion blacklisted 51 contractors, after investigations revealed they were supplying the black market after receiving payment for their services or goods.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The article talks about how the value of the Zimbabwe dollar, called ZiG, is going down in the black market. This is causing some shops in Bulawayo to not accept payments in the local currency. Some businesses are pretending their machines are not working so they can only take foreign currency. The Consumer Protection Commission is going to take action against these shops. The Confederation of Zimbabwe Retailers wants shops to accept ZiG. Businesses are struggling to get foreign currency from official channels, so they are turning to the black market. The government is investigating some contractors for selling on the black market.

Shops Continue To Reject ZiG As Street Rates Soar

Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu has said the Central Bank over US$50 million into the interbank foreign exchange market to complement the supply of foreign currency by Authorised Dealers to meet demand by economic agents.
In a statement issued on Thursday, 25 July, Mushayavanhu said in recent weeks, the Reserve Bank has witnessed a build-up in pipeline demand for foreign currency at banks, thus putting undue pressure on the foreign exchange market which necessitated the injection of the US$50 million. Reads the statement:
<blockquote>
RESERVE BANK PARTICIPATION IN THE FOREIGN EXCHANGE MARKET TO CONSOLIDATE ZiG STABILITY
Since 5 April 2024, the Reserve Bank has been participating in the interbank foreign exchange market to supplement liquidity under the Willing-Buyer Willing-Seller (WBWS) trading arrangement.
The participation of the Reserve Bank in the interbank market has helped to complement the supply of foreign currency by Authorised Dealers to meet demand by economic agents.
In recent weeks, the Reserve Bank has witnessed a build-up in pipeline demand for foreign currency at banks, thus putting undue pressure on the foreign exchange market.
In light of the above, the Reserve Bank is immediately injecting over US$50 million into the interbank foreign exchange market guided by the obtaining pipeline demand at banks as of 25 July 2024.
Consistent with the April 2024 Monetary Policy measures that introduced the ZiG currency, the Reserve Bank has been building foreign reserves which now stand at about 4 times cover of the reserve money.
The country continues to generate significant foreign currency to meet import requirements as evidenced by an almost 10% increase in foreign currency receipts during the first half of 2024 compared to the same period in 2023.
Reflecting the significant foreign currency receipts, the bulk of foreign payments are currently being met by balances in foreign currency accounts (FCA).
Going forward, the Reserve Bank remains an active participant in the interbank foreign exchange market to complement foreign currency supply under the WBWS trading platform to meet all genuine and bonafide foreign payments.
The Reserve Bank is satisfied with the general acceptance and uptake of ZiG by the market and will continue to ensure currency and exchange rate stability in the macro-economy.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The Reserve Bank of Zimbabwe (RBZ) has put over US$50 million into the interbank foreign exchange market to help meet the demand for foreign currency. This is to stop banks being under too much pressure. The RBZ has been injecting money into the market since April 2024 to help keep the currency stable. The country is generating a lot of foreign currency, which is helping to meet the demand for imports. The RBZ will keep participating in the market to make sure there is enough foreign currency for genuine payments. They are happy with how well the new currency, ZiG, is being used.

RBZ Injects US$50 Million Into Interbank Forex Market

The recent comments by President Emmerson Mnangagwa regarding plans to make the Zimbabwe Gold (ZiG) the sole legal tender in the country before 2030 have prompted banks to adopt a more cautious approach to long-term lending.
In October 2023, the government gazetted Statutory Instrument (SI) 218 of 2023, which extended the use of the multiple-currency system in Zimbabwe until December 2030. 
But in his address at the commissioning of the Mutare Teachers College’s fruit juice and water processing plant on July 4, 2024, President Mnangagwa hinted that if ZiG maintains stability, dollarisation may end in two years. He said:
<blockquote>
In two years, in fact two years is too far off, but there will come a time when our ZiG currency has fully penetrated the market, then I will give a directive that the country will be using the ZiG only.
</blockquote>
A top industrialist, who asked not to be named, told <a href="https://newsday.co.zw/theindependent/local-news/article/200029828/new-currency-plan-unsettles-banking-sector">The Independen</a>t that Mnangagwa’s comments have made banks adopt a cautious approach, trying to determine whether the President’s comments were a policy statement or merely political rhetoric. Said the industrialist:
<blockquote>
There are political statements and there are policy statements; what I was hearing is that it was a political statement.
I think what the President was saying is the goals for 2030 might happen earlier, not necessarily saying this is what was going to happen.
What banks have been trying to do is establish certainty in what is going to happen next.
So, they have not gone to anyone to say we are not lending but they are not doing anything. They are waiting for clarity; they are trying to understand whether this is a policy or a political statement and establish a level of comfort before they continue with long-term lending.
It will be harmless to continue until 2030 with a stable local currency in a multi-currency environment.
What authorities should be uncomfortable with is when the US dollar begins to affect the stability of the ZiG.
</blockquote>
A top business leader said many companies had been struggling to access loans for a long time. Said the business leader:
<blockquote>
Regarding the President’s remarks about de-dollarising by 2028, this, in my view, has to be taken in the context of the well-articulated and publicised plan by the government to end the country’s reliance on the USD and establish the ZiG as the sole local transacting currency.
Accordingly, we still stand guided by Statutory Instrument 218 of 2023, being aware that the government’s aim is to achieve the mono-currency position before December 31, 2030.
The challenges of accessing long-term funding cannot be solely attributed to the President’s remarks. Access to finance, more so, long-term funding has been a perennial problem.
What would help resolve this challenge would include policy consistency and predictability, among other factors.
As such, pronouncements that are in line with policy would not be expected to cause market shocks of grave significance.
</blockquote>
In November 2023, Finance, Economic Development and Investment Promotion Minister Mthuli Ncube stated that the government’s decision to enact SI 218 of 2023 was prompted by the banks’ refusal to lend money in both the Zimbabwe dollar and the United States dollar. Ncube said at the time:
<blockquote>
We are headed for mono currency, let’s be clear about that, but we want order. So the extension to 2030 was to create order and calm in the market.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

President Mnangagwa wants to make ZiG the only money by 2030. Banks are worried about lending money for the future. They don't know if the President's plan is real or just talk. They are waiting for clarity before lending long-term. Many businesses struggle to get loans. The government aims for ZiG to be the only money by 2030. The problems with getting loans are not just because of the President's plan. Banks didn't want to lend in both Zimbabwe dollar and US dollar, so the government made a plan to make things calm until 2030.

Plans To Make ZiG Sole Legal Tender Unsettles Banks

Zimbabwe’s largest independent brokerage, Imara Asset Management, says the government should restore the trust of citizens rather than suggest they be forced to abandon the US dollar, reported <a href="https://www.bnnbloomberg.ca/investing/2024/07/19/zimbabwes-imara-says-push-to-zig-sole-currency-is-startling-and-concerning/">Bloomberg</a>.
Imara Asset Management chief executive officer John Legat and chief investment officer Shelton Sibanda said:
<blockquote>
Rapid local currency depreciation episodes and the attendant hyperinflation years are still fresh in the minds of most Zimbabweans.
</blockquote>
Imara said those experiences eroded confidence in Zimbabwe’s economic and monetary authorities and the “focus for the government should be on building that lost trust.”
Zimbabwe launched a new gold-backed currency called the ZiG ((Zimbabwe Gold) in April 2024, its sixth attempt in 15 years to have a local currency.
Previous efforts collapsed amid sky-rocketing inflation and 80% of payments are now made in United States dollars.
President Emmerson Mnangagwa recently suggested the ZiG could become the sole legal tender as early as 2026.
Zimbabwe briefly banned the use of foreign currencies in June 2019 following the reintroduction of the Zimbabwe dollar, which it had abandoned a decade earlier.
The currency ban was, however, reversed at the onset of the coronavirus in March 2020.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe's government wants to make a new gold-backed currency called ZiG the only money people can use. But Imara Asset Management thinks this is a bad idea. They say the government should make people trust them first. Many people remember when Zimbabwe's money lost its value and prices went up a lot. People lost faith in the government then. The government has tried to make a new currency 6 times in the last 15 years, but it didn't work. Most people use US dollars for payment now. The President wants ZiG to be the only money by 2026.

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