Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu has dismissed claims that most citizens have rejected the Zimbabwe Gold (ZiG) currency.
He boldly claimed that the use of the local currency has increased from 20 per cent to 30 per cent of total transactions since he took office.
Speaking on a special edition of ZTN’s “Beyond the Dollar” podcast on Friday, Mushayavanhu acknowledged that Zimbabwe is still using multiple currencies but stressed that the long-term goal is to phase out foreign currencies and transition to 100 per cent ZiG usage by 2030. He said:
<blockquote>
It is not true that the ZiG has not been widely embraced. Remember, we are in a multi-currency regime, which means you can use US dollars or any other currency or the local currency — ZiG.
What we have seen is that currently, 30 percent of the transactions that are being done in this country are being done in ZiG and 70 percent are being done in US dollars.
When I came in, the ratio was 80:20 — 20 percent of the transactions were in local currency and 80 percent of the transactions were in foreign currency.
By 2030, we want the ratio to be 100 percent ZiG and zero percent foreign currency. So, as far as adoption of ZiG is concerned, I can tell you that the figures are showing that it’s increasing.
</blockquote>
Meanwhile, petroleum products in Zimbabwe are sold exclusively in foreign currency, while certain government departments, such as the passport office, also offers service to the public solely in foreign currency.
Civil servants receive part of their salaries in ZiG, thereby leading to a forced adoption of the local currency.
Similarly, small traders who frequently deal with low-value transactions are compelled to use ZiG for small change.

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The Governor of the Reserve Bank of Zimbabwe, John Mushayavanhu, says more people are using the local currency, ZiG. He wants all transactions in Zimbabwe to use only ZiG by 2030. Before he became governor, 80% of transactions used foreign currency, but now 30% use ZiG. Some things, like gas and passports, can still only be bought with foreign currency. Some people, like civil servants and small traders, are being forced to use ZiG for their transactions. Mushayavanhu thinks more people will start using ZiG in the future.

Mushayavanhu: All Local Transactions To Be In ZiG By 2030

The Reserve Bank of Zimbabwe (RBZ) is considering the introduction of higher denomination ZiG notes to facilitate smoother cash transactions.
RBZ Governor John Mushayavanhu told <a href="https://www.sundaymail.co.zw/zig-firms-as-rbz-reserves-shoot-to-us533m">The Sunday Mail</a> that the volume of new notes set will be drip-fed into the market to align with projected economic activity, ensuring market stability. Said Mushayavanhu:
<blockquote>
Plans to introduce higher denominations are underway and the amount to be introduced will be optimal and consistent with the envisaged economic activity.
Going forward, the Reserve Bank expects to progressively increase the proportion of cash to total deposits to 5 percent, which is close to countries with similar economic structures in the region.
Given the current money market position, the Reserve Bank is committed to maintaining the value of the ZiG and implementing measures that will preserve its transactional and store-of-value functions and support the de-dollarisation journey.
The RBZ will progressively increase the amount of ZiG in circulation to optimal levels, consistent with anticipated broad money growth supportive of economic activity.
The RBZ will ensure that the increase in local currency is fully covered by foreign reserves (gold, other precious metals and nostro balances), at all times, and in line with the foreign reserves accumulation strategy.
</blockquote>
While the RBZ asserts that the ZiG has stabilized, trading at just over ZiG26 per US$1 on Monday, January 13, the street rate remains around ZiG40 per US$1.
Additionally, formal retail outlets have moved away from using the fixed official rate. When they do, they tend to inflate prices in USD to protect themselves from potential losses.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The Reserve Bank of Zimbabwe wants to make it easier to use money by introducing higher denomination notes. The amount of new money introduced will depend on the economy, to keep things stable. They plan to increase the amount of cash in circulation gradually. The value of the local currency (ZiG) needs to be protected, and the RBZ will make sure there's enough foreign reserves to back it up. The ZiG is doing better but the street rate is still different. Stores are moving away from using official rates and some are raising prices in USD.

RBZ Plans To Introduce Higher Denomination ZiG Notes

Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu said that reserves backing the Zimbabwe Gold (ZiG), including foreign currency and gold, have risen to US$533 million.
In an interview with <a href="https://www.sundaymail.co.zw/zig-firms-as-rbz-reserves-shoot-to-us533m">The Sunday Mail</a>, Mushayavanhu said the reserves, which include 2.67 tonnes of gold valued at US$228 million held in the central bank’s vaults, are more than three times the amount of local currency in circulation.
When the ZiG was launched on April 5 2024, the central bank held around 1.5 tonnes of gold.
Currently, the total ZiG in circulation stands at ZiG183 million, representing approximately 5 per cent of the reserve money.
Mushayavanhu said the growth in reserves has been fueled by a notable increase in gold production, which reached a record 36.48 tonnes in 2024, reflecting a 21 per cent rise compared to 30.10 tonnes in 2023. Said Mushayavanhu:
<blockquote>
Indeed, the country’s gold production reached a record level of 36,48 tonnes in 2024, reflecting a 21 percent increase from the previous year’s output of 30,10 tonnes.
The rise in gold production has been vital for the Reserve Bank to build foreign reserves through royalties and foreign currency earnings from exports, which is critical for backing ZiG.
The boost in gold output has led to higher gold holdings needed to support and cover the ZiG. 
Consequently, as of January 9, 2025, the available foreign reserves (reserve cover) held by the Reserve Bank in the form of gold and foreign currency cash were about US$533 million, representing more than three times the actual reserve money.
</blockquote>
Since its introduction in April 2024, the ZiG currency has lost significant value and members of the public do not want to keep it but use the notes as small change due to the unavailability of USD denominations less than US$1.
Overall, Zimbabweans have zero trust in the currency and no one want to use it as a store of value, a major function of money.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The Reserve Bank of Zimbabwe has $533 million backing the Zimbabwe Gold currency called ZiG. This includes gold and foreign currency. The amount of gold held in the central bank's vault has increased to 2.67 tonnes valued at $228 million. The ZiG currency was launched on April 5, 2024, with 1.5 tonnes of gold. Now there are 183 million ZiG in circulation, representing 5% of the reserve money. The increase in reserves is due to a rise in gold production, reaching 36.48 tonnes in 2024. However, people do not trust the ZiG currency and use it for small change because USD notes smaller than $1 are not available.

Reserves Backing ZiG Hit US$533 Million, Says RBZ

The government has vowed to intensify its crackdown on suppliers and manufacturers across Zimbabwe who either refuse to transact in Zimbabwe Gold (ZiG) or charge parallel market exchange rates.
Presenting the 2025 National Budget, Finance, Economic Development, and Investment Promotion Minister Mthuli Ncube said that the Financial Intelligence Unit (FIU) will take action against businesses that refuse to accept ZiG or use parallel market rates. Said Ncube:
<blockquote>
The Financial Intelligence Unit (FIU), which has primarily concentrated on enforcement within the retail sector, is now broadening its scope to target non-compliant manufacturers and suppliers.
FIU offices will soon be established in areas beyond Harare to enhance monitoring and enforcement.
The FIU will take decisive action against businesses that refuse to accept ZiG or use parallel market rates.
</blockquote>
FIU Director General Oliver Chiperesa told <a href="https://businesstimes.co.zw/govt-intensifies-clampdown-on-non-compliant-businesses/">Business Times</a> that bank accounts of manufacturers and suppliers found violating regulations have been frozen. Said Chiperesa:
<blockquote>
Some manufacturers and suppliers continue to restrict the volume of ZiG they accept from downstream traders, which remains a challenge.
We are employing a dual approach of engagement and enforcement. Several accounts have already been frozen, and penalties imposed.
</blockquote>
He added that enhanced compliance within the manufacturing sector would generate positive ripple effects across the entire supply chain, ultimately benefiting consumers.
A manufacturer, who requested to remain anonymous, defended the pricing strategies, saying:
<blockquote>
We set prices that allow us to sustain production. Pricing policies that make operations unsustainable would lead to shutdowns. There is a need for engagement to foster mutual understanding.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The government is getting tough on businesses in Zimbabwe that don't want to accept ZiG or use the right exchange rates. The Financial Intelligence Unit is going after these businesses and freezing their bank accounts. They want everyone to follow the rules to help the whole supply chain and consumers. Some businesses say they need to charge certain prices to stay in business, but the government wants everyone to work together to understand each other. The goal is for everyone to play fair and help the economy grow.

Crackdown On Businesses Rejecting ZiG And Charging Parallel Rates Set To Intensify

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>

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

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

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 Confederation of Zimbabwe Retailers (CZR) has warned the government against banning the existing multi-currency system and designating the Zimbabwe Gold (ZiG) as the exclusive legal tender to stabilise the rapidly depreciating local currency, reported <a href="https://www.newsday.co.zw/local-news/article/200033068/no-to-forced-de-dollarisation-retailers">NewsDay</a>.
On September 27, the Reserve Bank of Zimbabwe (RBZ) devalued the ZiG from 14.1 to 24.3 per United States dollar. 
In the wake of this devaluation, some economic analysts have urged the government to ban the use of the United States dollar and adopt the ZiG as the exclusive currency for trade.
However, in a report addressed to RBZ governor John Mushayavanhu on September 30, CZR president Denford Mutashu warned that enforced de-dollarisation could have “catastrophic consequences” for the economy. Said Mutashu:
<blockquote>
As the CZR, we strongly believe that any attempts to fully de-dollarise at this stage could have catastrophic consequences for both businesses and the broader economy.
A hasty transition will amplify current economic challenges rather than alleviate them.
</blockquote>
Mutashu warned that banning the US dollar for domestic transactions could lead to fuel shortages and severely impact the retail sector, along with other industries. He said:
<blockquote>
Any move to switch the currency of transaction, without adequate reserves and systems in place, will inevitably lead to scarcity, causing significant disruptions across all sectors.
The transportation industry, a critical player in the retail supply chain, would also be affected, driving up logistical costs and causing inflationary pressures.
With the current foreign currency exchange allocation system, there are already challenges in meeting the demands of industries for US dollars.
Full de-dollarisation would exacerbate these shortages as businesses will struggle to secure foreign currency to import essential goods and raw materials.
</blockquote>
Mutashu suggested that, for now, the government should permit the coexistence of both the US dollar and the ZiG to provide businesses and consumers with the flexibility necessary to adapt. He added:
<blockquote>
Gradually, as confidence in the local currency builds, the reliance on the US dollar can be reduced.
</blockquote>
In an interview with NewsDay, Economist Prosper Chitambara said de-dollarisation should be market-driven. He said:
<blockquote>
Well, my thinking is that the issue of de-dollarisation is a very sensitive matter and it is a matter that must be dealt with very circumspectly and also very cautiously.
It must not necessarily be a rushed exercise or a government-decreed exercise, but it must be an inclusive process that is based on a market-determined process that is tied to the attainment of certain key benchmarks around issues of production, issues of reserves, inflation and issues of informality.
</blockquote>
Economist Vince Musewe warned that forcing a local currency will collapse the economy. He said:
<blockquote>
Zimbabweans prefer the US dollar and that is not about to change. Unless there is a drastic change in policymaking, the same problems will continue to be faced by us beyond 2030. Forcing a local currency will collapse the economy.
</blockquote>
The ZiG, or Zimbabwe Gold, was launched in April 2024 and represents the country’s sixth attempt to establish a stable currency in the past 15 years.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Retailers in Zimbabwe are worried about the government changing the currency to only use the Zimbabwe Gold (ZiG) instead of the US dollar. They say this could have bad effects on the economy, like fuel shortages and higher prices. They want both currencies to be allowed for now, until people trust the ZiG more. Economists also think the change should be gradual and decided by the market, not rushed by the government. They are worried that forcing a new currency could make things worse for the country. The ZiG was started in 2024 as an attempt to make a stable currency.

Retailers Warn Government On Potential Risks Of De-Dollarisation

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>
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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

The Reserve Bank of Zimbabwe (RBZ) has disbursed ZiG46 million in notes and coins to the banks, but only 30% of the cash has been released to the market, Finance, Economic Development and Investment Promotion deputy minister David Mnangagwa has said.
Responding to questions about the scarcity of ZiG at the inaugural Capital Markets Conference which ended yesterday in Nyanga, Mnangagwa said that most of the cash circulates in the informal sector, but the banks, which have the notes, only transact with the formal sector. Said Mnangagwa (via <a href="https://www.newsday.co.zw/local-news/article/200027834/only-30-zig-released-to-the-market">NewsDay</a>):
<blockquote>
I did raise concern with the governor about the issue around fear of money not circulating and, indeed, he showed us his dashboard of the amount of notes that have gone to the banks.
But, we went further and asked how much have the banks released to the markets and this is where the joke is.
They have only released 30% of the monies they have been given by the RBZ and what then happens after that is now outside of the RBZ’s control.
So, you find that most of the fiat money circulates in the informal sector, but the notes are with the banks who only transact with the formal sector. Maybe it’s going to be gradual.
</blockquote>
Last month, Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu said that the central bank released enough ZiG cash for use by the public in conducting low-value transactions and for change.
Mushayavanhu urged corporates and individuals to approach their banks and withdraw coins for transactional convenience.
Mnangagwa was unsure whether the country still had cashback facilities but urged retailers to go to the banks to get ZiG notes and coins. He said:
<blockquote>
I don’t know if our economy drivers have bank accounts that they need to go and withdraw coins. I think we have to assist each other to make sure that there’s circulation of these notes.
So, it is an issue that is, I think, dividing the whole market and we need to come up with innovative ways. I don’t know if the capital markets can help.
I’m not sure if they actually are concerned about the notes and the coins. Probably not so much, but this is a countrywide issue.
</blockquote>
The shortage of ZiG notes and coins in circulation is inconveniencing traders and transport operators, among others.
There are concerns that the shortage of notes and coins will work against the government’s efforts to promote the use of local currency and make de-dollarisation difficult.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

RBZ Released ZiG$46 Million In Cash, But Only 30% Circulates - Mnangagwa

The severe scarcity of ZiG banknotes and coins in circulation can be attributed to the Reserve Bank of Zimbabwe’s (RBZ) reluctance to distribute the new currency en masse over concerns that releasing the notes and coins all at once could inadvertently fuel the growth of the parallel market, it has emerged.
The government launched the ZiG on 05 April 2024, in an attempt to stabilise the economy, which has been unstable for the past 25 years.
The gold-backed currency replaced the Zimbabwean dollar, the RTGS, which had lost three-quarters of its value in the year it was replaced.
The new ZiG banknotes and coins that came into circulation on 30 April are in denominations of between 1 and 200.
However, the ZiG physical cash remains in short supply and this has significantly impacted millions who depend on cash for their daily needs, including people working in the informal economy.
The situation has led to many Zimbabweans having to budget more for basics just to make it through the day.
Speaking at a breakfast meeting hosted by the Zimbabwe Economics Society in Harare, RBZ deputy governor Innocent Matshe said the central bank deliberately limited the amount of cash injected into the economy to starve the parallel market. He said (via <a href="https://www.newsday.co.zw/business/article/200027220/zim-applies-for-iso-code-for-zig">NewsDay</a>):
<blockquote>
Due to the situation in our country, where a parallel market drove approximately 80% of economic activities, it was crucial to ensure that we did not supply all the new currency at once. Therefore, we limited the amount of cash injected into the economy.
Although challenges persist, they will evolve. Most financial institutions have received sufficient small denominations of the currency to address these issues.
You may wonder, why issues persist. These issues are systemic but will be resolved as the currency becomes more widely available.
The stability of the exchange rate will reflect the true value of the economy and the purchasing power of the currency, boosting domestic demand and supporting industrialisation in trade.
</blockquote>
The ZiG will co-circulate with other foreign currencies in the economy. However, the US dollar, which accounts for over 80 of transactions, will remain legal tender.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

"ZiG Shortage A Strategy To Starve Parallel Market"

The government has deployed more than a dozen teams across the country to carry out this year’s first quarter gold mobilisation exercise to boost the mining of the yellow metal which is backing the recently introduced Zimbabwe Gold (ZiG) currency.
This comes after the country recorded a 1,9% drop in gold output in the first quarter of 2024 due to leakages.
Speaking at the first Gold Mobilisation workshop, Minister of Mines and Mining Development, Winston Chitando said that the mobilisation teams were tasked with encouraging small-scale miners to formalise their operations and sell their gold through official channels such as Fidelity Gold Refinery (FGR). Said Chitando (via <a href="https://www.newsday.co.zw/local-news/article/200027203/zig-faces-new-threatas-gold-output-plunges">NewsDay</a>):
<blockquote>
For 2024 from January to April, the gold deliveries to FGR (Fidelity Gold Refineries) sit at 8,4 tonnes against a target of 40 tonnes by the end of the year. In 2023 for the months of January to April a total of 8,57 tonnes were delivered, this represents a 1,9% decrease.
Mineral leakages deprive the government of much-needed revenue from taxes and royalties. By working together, we can ensure that every ounce of gold extracted within our borders contributes to the national good.
</blockquote>
Chitando said increased gold production will boost the gold reserves and strengthen the ZiG’s value. He said (via <a href="https://www.newzimbabwe.com/zimbabwe-to-boost-gold-production-for-new-gold-backed-zig-currency/">NewZimbabwe.com</a>):
<blockquote>
Recently our currency was anchored on gold hence the need to ensure that all gold trade be done through the formal channels and eventually find its way to Fidelity Gold Refinery, our sole gold exporter.
This proactive approach by the ministry demonstrates its commitment to promoting the use of ZiG as a stable and reliable currency backed by tangible assets like gold.
Through these mobilization efforts, the ministry seeks to create a sustainable and robust financial ecosystem that benefits both the government and the citizens of Zimbabwe.
</blockquote>
The first gold mobilisation exercise will be conducted in all the country’s mining provinces which are Masvingo, Mashonaland East, Matabeleland South, Matabeleland North, Mashonaland Central, Midlands, Manicaland and Mashonaland West.
Chitando also revealed that in the first four months of 2024, large-scale miners delivered 4,3 tonnes of gold to FGR compared to 3,4 tonnes in the same period of 2023, representing a 26% increase.
However, gold delivery from small-scale miners, who are the main contributors to the country’s gold output, fell by 23% in the first quarter. Said Chitando:
<blockquote>
For small-scale miners, the gold deliveries to FGR have decreased from 5,2 tonnes in 2023 to four tonnes in 2024, a 23% decrease.
The small-scale miners have contributed 48% of the gold delivered to FGR for the year 2024 as compared to the 60% contribution for the previous year, 2023.
Over the years since 2020, small-scale miners have been the major contributors to gold deliveries to FGR contributing more than 60%.
However, for the year 2024, the contribution by small-scale miners ranges between 42% and 53% which calls for investigations into the decline in gold deliveries.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Govt In Gold Production Mobilisation Drive To Stabilise ZiG

Business leaders and economists have criticised the government’s move to manipulate exchange rates thereby reintroducing price controls for all goods to slow down inflation.
The annual inflation rate increased to 57.5% in April, up from the previous month’s 55.3%.
In a move aimed at regulating the pricing of goods, the government recently imposed the Statutory Instrument 81A of 2024 which removed the 10% premium on forex sales.
As a result, all sellers of goods are now compelled to use the interbank selling rate or risk being fined at least ZiG200 000 penalty.
The president of the Confederation of Zimbabwe Retailers (CZR), Denford Mutashu has since written to the Minister of Industry and Commerce, Mangaliso Ndlovu, expressing concern over the contents of Statutory Instrument 81A of 2024. The letter, seen by <a href="https://businesstimes.co.zw/disquiet-over-price-controls/">Business Times</a>, reads in part:
<blockquote>
We are writing to express our strong concerns regarding Statutory Instrument 81A of 2024. While we understand the intention behind this instrument we believe that the current framework is not workable and requires significant adjustments to ensure its feasibility.
Our concerns are centred around the maximum exchange rate, which does not reflect a cost recovery exchange rate given the current circumstances.
Specifically, banks are currently charging clients a rate around 5% above the selling rate. This week, the banks have been selling at a rate of around ZiG14.70:US$1.
The new intermediate money transfer tax (IMTT) statutory instrument announced by the minister has increased the IMTT for forex (FX) purchases on the Willing Buyer, Willing Seller (WBWS) from 1% to 2%.
This is in addition to the 1% charged by the Reserve Bank of Zimbabwe (RBZ), taking the total cost for WBWS purchases to 3%. These costs add up to an average of 8% above the RBZ selling rate.
Furthermore, FX is not available on demand, and any time lag between receiving ZIG and purchasing FX on WBWS can result in losses for traders due to ZIG rate devaluation.
To make this SI workable and possible for players to comply, we recommend that the bank selling rates must not exceed the RBZ selling rate and that FX purchases from the WBWS must be exempted from IMTT.
</blockquote>
Mutashu also urged authorities to remove the RBZ’s 1% admin fee for WBWS purchases and to allow an additional 2% above the WBWS selling rate to account for ZIG rate volatility if these measures are not implemented. He added:
<blockquote>
SI 81A of 2024 will not be workable, and it will lead to a cat-and-mouse game between the regulator and businesses. We urge you to consider our concerns and recommendations to ensure a feasible and effective framework.
</blockquote>
Kurai Matsheza, the president of the Confederation of Zimbabwe Industries (CZI), said:
<blockquote>
In economics, there’s a law of demand and supply hence the government should follow that for the exchange rate to stabilise. Anything outside that will affect the economy.
</blockquote>
Economist Vince Musewe pointed out that the government is repeating mistakes by reintroducing price controls, which could lead to shortages and smuggling. He said:
<blockquote>
You cannot police market sentiment. The market is a beast that can only be tamed by building trust and confidence.
Price controls always create alternative market shortages and increased smuggling. We are not learning from history.
</blockquote>
Another economist, Tony Hawkins, said the threats of arrests and fines “confirm that nothing has changed”. He said:
<blockquote>
Next comes the shifting of goalposts with new SIs and additional ways of calculating inflation.
In this case, we have a new twist — the conversion of an already out-of-date national budget into zigs which will give Treasury lots of opportunities to switch spending and raise stealth tax revenues.
The next stage, as is happening now is threats, arrests and fines all of which confirm that nothing has changed.
How can it be a free market if anyone who trades on a willing buyer-willing seller basis is breaking the law unless he trades at the manipulated RBZ rate?
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Price Control Reintroduction Draws Criticism from Business Leaders and Economists

Zimbabwe National Chamber of Commerce (ZNCC) chief executive officer, Chris Mugaga, said the reason businesses put a premium on the official exchange rate when setting prices was that there was no foreign currency readily available in the formal market.
In an interview with <a href="https://www.businessweekly.co.zw/no-mercy-for-violating-exchange-rate-treasury/">Business Weekly</a>, Mugaga said businesses are forced to source foreign currency from the black market because it is not available in the banks. He said:
<blockquote>
The reason why our constituency put premiums is that they have acknowledged that we cannot get (adequate) forex from the banks. If you go to the bank looking for forex you will not get it.
So, if you cannot get the forex from the banks, where else can you get it other than the black market?
Like it or not, the black market remains a major source of forex for most businesses.
</blockquote>
On Wednesday, Finance, Economic Development and Investment Promotion Minister, Mthuli Ncube, warned that businesses caught pricing their products or services using an exchange rate higher than the official rate risk severe penalties.
Responding to questions from legislators during a National Assembly sitting, Ncube said there is no longer any “basis” for shops to use any rate above the official rate after the government recently removed the legal provision allowing traders to put a 10 per cent margin above the ruling interbank exchange rate.
However, Mugaga argued that the stability of the ZiG currency counted for little as long as businesses struggled to secure foreign currency to import raw materials. He said:
<blockquote>
What the minister is saying does not define what is happening on the ground. What is happening is that if you go to the banks looking for foreign currency you are not able to get it.
If the minister wants a comprehensive approach, he must look at the whole supply and demand of forex.
If he considers only the stability of ZiG, he will be starting from the front end of the demand and supply chain.
</blockquote>
Some business executives say they are now allowed to price products at the exchange rate at which they would have purchased forex from their banks.
When contacted for comment by Business Weekly on the new position, Central Bank Governor John Mushayavanhu could only say “We will issue a statement to clarify.”
Zimbabwe’s economy is nearly 80 per cent dollarised and several businesses have also learnt to survive largely on their domestic foreign currency sales receipts, which they say remain inadequate to cover their needs.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Currency Scarcity Drives Premium Pricing, Says ZNCC CEO Chris Mugaga

The Government plans to extend a crackdown that’s targeting street currency traders to retailers (shops) to ensure goods and services are priced using only the official exchange rate of the new ZiG currency.
Responding to questions from legislators during a National Assembly sitting on Wednesday, Finance, Economic Development and Investment Promotion Minister, Mthuli Ncube, warned that businesses caught pricing their products or services using an exchange rate higher than the official rate risk severe penalties.
Ncube said there is no longer any “basis” for shops to use any rate above the official rate after the government recently removed the legal provision allowing traders to put a 10 per cent margin above the ruling interbank exchange rate. He said:
<blockquote>
We must protect our currency and keep it stable and discourage unnecessary speculation. The speculation is unjustified.
It is clear what the fundamentals are that drive value, that underpins the value of this currency and therefore it should be clear to everybody that this currency should be stable and an appropriate official exchange rate should be used for transaction purposes.
In our desire to protect that, Mr Speaker Sir, we are putting certain measures, certain sanctions on those who deviate from that objective.
First of all, for those who are managing retail or own retail organisations and sell goods to the public, we are insisting as a Government that they ought to use the willing buyer-willing seller price for foreign currency as the basis for pricing.
We have removed any basis to deviate officially from the official exchange rate, that 10 per cent exchange limit was causing deviation as an excuse for overpricing purposes.
So, from now on, we will make use of the willing buyer-willing seller pricing mechanism and any deviation will be sanctioned through a fine of no less than ZiG200 000 per offence.
So, those are really the measures we have put in place to deal with the pricing by retailers.
</blockquote>
The government gazetted Statutory Instrument 81A of 2024, Exchange Control (Amendment of Schedule to Exchange Control Act) Notice, 2024, last week.
S.I. 81A of 2024 scrapped the provision for a 10 per cent margin above the ruling exchange rate and also laid down the new requirement and the civil penalties that can be levied against defaulters.
Violation of the law now attracts a penalty of a minimum of ZiG200 000 per offence, and if the foreign currency taken in is higher in value, then the penalty equals that foreign currency.
According to <a href="https://www.businessweekly.co.zw/no-mercy-for-violating-exchange-rate-treasury/">Business Weekly</a>, traders and open market foreign currency dealers are pricing the local currency between ZiG17,5/US$1 and ZiG20/US$1.
According to the Reserve Bank of Zimbabwe (RBZ) website, the average interbank rate on 17 May 2024, was ZiG13.39/US$1.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Government To Extend ZiG Currency Crackdown To Shops

Takavafira Zhou, the president of the Progressive Teachers Union of Zimbabwe (PTUZ), says civil servants are demanding payment of their salaries in US dollars, rather than the newly-introduced Zimbabwe Gold (ZiG) currency.
He is of the view that the ZiG is destined to fail due to its lack of convertibility across the Southern African Development Community (SADC) region.
Zhou told <a href="https://tellzim.com/zig-another-currency-crisis/">TellZim News</a> that Zimbabwe is not yet ready to have a local currency due to low productivity in key sectors of the economy. Said Zhou:
<blockquote>
We are not comfortable with salary payable in local currency unless it is acceptable in the region and at border posts as well as payable across other sectors in the government. If that is the case then it could be permissible to pay civil servants’ salaries in local currency.
Our perception and conviction is that Zimbabwe is not ready for a local currency and trying to pay civil servants in local currency would be tragic because very soon the local currency would show beyond any reasonable doubt that it is not applicable and is of limited longevity and applicability.
The long-term aspect is that we must continue to pay salaries in USD. The whole basis of paying in local currency is based on industrial recovery and balance between exports and imports, all other political rhetoric claims of a viable local currency have limited longevity and applicability and very soon indicators will show that the local currency is not viable.
</blockquote>
Zhou said the Government should have confidence in its currency by regularising the payment of taxes and other government services in the ZiG currency. He said:
<blockquote>
If the new ZiG currency is of value we must see the government regularizing payment of taxes and other government services in new currency but sadly the government has continued to demand the payment of lots of these services in USD. It is also doubtful the new currency will be used in the SADC region.
Our economy has become an enlarged supermarket for products from China, Botswana and South Africa. As long as the new currency cannot be used by traders to buy commodities from these other countries it will be of limited validity and applicability.
Government is not consistent in terms of policy formulation and application. This is an indicator of an oxymoron, if the government has confidence as they articulating that the new currency is stronger, they should then be systematizing and ensuring that taxes and other government services are done using the local currency.
Unless and until we produce, re-kit our industry and balance exports and imports it is doubtful that the new currency will stabilize or would be applicable because currency can only be backed by these factors.
</blockquote>
Development economist Prosper Chitambara said the government should set a time frame on when citizens can be able to pay for other government services including fuel payments in ZiG. Said Chitambara:
<blockquote>
Fifty per cent of the taxes are going to be paid using ZiG but with time there is a need to put a clear benchmark on when we will expect to pay for other government services in local currency and also including the payment of fuel but is something that must be done in a planned and systematic way but also in a gradual way within the framework of the country’s de-dollarization wherein we are expecting that by 2030 we should have reverted to the local currency.
It is important as it helps in terms of increasing the demand for the Zimbabwe Gold which will help the ZiG to stabilize and increase the value as demand increases.
There are arbitrage opportunities that have been caused by the differences in the exchange rate between the official and the black market rate.
If we can address that as I am hoping that we have liberalized that will help. The fact that demand for USD remains very high and the formal market may not probably be able to satisfy that demand and the black market will remain.
The challenge that we have is that even individuals who are renting out properties would not accept ZiG so there is a double standard; when they are paying for services whether it is local council rates they would want to pay in local currency because of the arbitrage opportunities as a result of the black market premium.
</blockquote>
The Reserve Bank of Zimbabwe (RBZ) recently conceded that ZiG will not be recognized internationally, saying it will work to strengthen the currency to attain full convertibility.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

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