The Zimbabwean government’s introduction of a new currency, Zimbabwe Gold (ZiG), has been met with skepticism by many citizens who are concerned about the country’s economic stability.
The currency, which is backed by gold and other precious minerals, was introduced in April this year but has already faced significant challenges.
One of the major concerns is the lack of trust in the new currency, with many citizens preferring to use foreign currencies, such as the US dollar.
Speaking in Parliament on Thursday, Noah Mangondo questioned: “If I do not have trust in my own local currency, what about those people who are coming from other countries?”
The government has implemented measures to try and boost the value of ZiG, such as allowing market forces to determine the exchange rate. However, these measures have been met with resistance, and many citizens are still using foreign currencies.
“The problem that I foresee is when people start to discuss on the issue to do with US dollars… if we still maintain the American currency, those US dollars working in this country together with our local currency, we will see those people running around trying to fluctuate the value of our local currency,” said Mangondo argued.
Another challenge facing the new currency is the lack of access to it, particularly in rural areas.
“People should be sensitised on the importance of using ZiG so that people must not be cheated or they must not be crooked on their hard-earned cash,” said Mangondo.
The Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu addressed these concerns in a press statement on Thursday.
He stated that ZiG coins and notes were issued in sufficient quantities to meet demand for small transactions and change.
Mushayavanhu there has been a breakdown in the cash transmission mechanism, with low levels of ZiG coin withdrawals from commercial banks. He encouraged corporates and individuals to withdraw coins from banks for transactional convenience.
The government has also been criticised for its handling of the economy, with many citizens feeling that it is not doing enough to address the country’s economic challenges.
Norton legislator Richard Tsvangirai: “The informal sector is growing, with much of the transactions happening in cash, further driving the confidence deficit in the country.”
Others, however, remain optimistic about the future of ZiG. Mberengwa East MP Tasara Hungwe urged citizens to support the new currency.
“Let us unite and support our industry, our banks and our currency. If we support our currency, we will get far,” Hungwe said.
“I foresee our future being good because if we look at it from the 5th of April to date, most people who thought it would have devalued can see it is still stable and it is the opposite of what they thought.”
Mangondo added: “The economy within the nation, if it is not that strong, even if people do not have trust in their local currency, it will lead them into such devaluation of the local currency on the market.”
They can’t run the country’s economy by trial and error. People need a stable, workable economy. Garwe ngaridzokere mumvura rakonewa