Zimbabweans, a long suffering people who have endured a debilitating economic climate for over 2 decades, leaving many impoverished, have once again been cast into the deep end, and yet still expected to swim their way to prosperity, this time under another new currency, called the ZiG.
ZiG, standing for Zimbabwe Gold, is the new currency for the Southern African nation that was unveiled yesterday (5/4/24) by the new Governor of the Reserve Bank, Dr John Mushayavanhu.
Mushayavanhu, a career banker who was the CEO of FBC Bank prior to his appointment as RBZ Governor, assumed the hot seat amid spiraling inflation and immediately set to presenting his monetary policy statement whilst concurrently also launching the new currency (ZiG).
As we speak, all of Zimbabwe’s financial institutions, service providers and other businesses are not transacting in the local currency as they are changing their systems to adopt the new currency.
“Dear Valued Client, Kindly note ALL ZWL transactions have been suspended to enable transition to ZiG as per the provisions of the Monetary policy of 05/04/2024,” read a message from Telone sent to its clients.
“Dear customer. Please note that ZWL transactions are currently unavailable due to the currency change over exercise. We apologize for the inconvenience caused,” read a message from Econet, the country’s largest Telecoms operator.
“Dear Valued Client, Please note that ALL ZWL subscriptions on the Deepleague platform have been suspended to enable a smooth transition to the new ZiG, as per the dictates of the Monetary policy statement of 5/04/2024.
Subscriptions in USD are not affected,” read yet another message from Real Estate Market Place operator Deepleague.
The Central Bank has mandated all financial institutions to change ZWL accounts to ZiG. It also instructed all businesses to re-price their goods and services to reflect the ZiG.
The ZiG starts circulating on Monday, the 8th of April, 2024.
It remains to be seen how the public will take to the new currency, in the inflation battered economy.
There are a number of questions that Zimbabweans have with regard to the ZiG, such as whether one can simply walk into a bank and exchange their ZiG for the USD or whether the new currency that is backed by gold will be accepted in other countries’ banks in exchange for their currencies.
I’m afraid, dear reader, judging by the words from Governor Mushayavanhu’s own mouth, it’s not looking to enticing.
Mushayavanhu, in an interview with Technomag Senior reporter Toneo Rutsito, shed light on some of these questions. We publish the interview below, in verbatim.
Toneo: Can Zimbabweans walk into a bank anytime if they want to, and exchange their ZiG for USD at any bank, are they able to do that?
Mushayavanhu: Well, If you go into your bank with a genuine need for foreign exchange, if let’s say you’re traveling yes you can do that. Let’s say you’re paying for a service rendered outside the country yes you can do that. But to just go and say he’s my ZiG I want the US dollar, obviously that will not happen.
Toneo: Who determines whether this need is genuine or not, is it the bank, is it me or someone else, who determines the need?
Mushayavanhu: There are exchange control guidelines that specify what you can do and what you can’t do. It determines what you can legitimately do and what you can’t legitimately do.
Toneo: If I move to South Africa, Zambia or Botswana will I be able to exchange it for their local currencies or its only for Zimbabwe, and if I can’t then what’s the difference between the ZiG and the rtgs?
Mushayavanhu: This is a currency for Zimbabwe and obviously its acceptability in other countries is for those countries to determine, but what I can tell you is that the ZiG is freely transferable.
Toneo: Are you going to be freely floating it as well on the international exchange?
Mushayavanhu: Yes, as I said earlier on, we are introducing a market determined exchange rate, which means it will be free floating.
Toneo: Internationally, regionally and with other countries?
Mushayavanhu: Well, when we say an exchange rate, a currency is free floating it means for a legitimate reason you can change it for any other currency.
The utterances by Mushayavanhu in this interview clearly demonstrates that the new currency is only meant for the Zimbabwean market, with the governor not very sure himself if it would be accepted in other countries.
His lackluster response to these basic and yet very important questions would seem to feed into the skepticism by some economists and the larger public on whether this new currency is any different from the rtgs dollar which preceded the ZiG.
It remains to be seen whether the ZiG will be accepted by filling station for fuel purchases or by the passport office, which is a government department that charges exclusively in USD for it’s service.