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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>

Pindula News

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

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) 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

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

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

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.

Think Tank Expresses Alarm Over Push For ZiG As Zimbabwe's Sole Currency

The Reserve Bank of Zimbabwe (RBZ) under new governor John Mushayavanhu reportedly destroyed millions’ worth of Zimbabwe Gold (ZiG) banknotes.
According to <a href="https://thenewshawks.com/mushayavanhu-lays-to-waste-zig-banknotes-worth-millions/">The NewsHawks</a>, these banknotes, printed at considerable expense, bore the signature of Mushayavanhu’s predecessor John Mangudya.
When Mushayavanhu announced the introduction of the ZiG currency on April 05, there were already millions of banknotes of the new currency that had been printed under his predecessor, Mangudya.
These pre-printed notes had to be destroyed to remove the ones signed by Mangudya, which Mushayavanhu did not want to circulate alongside notes bearing his signature.
According to the report, that was the reason the new ZiG notes took almost a month to introduce as the RBZ had to print again from scratch. The NewsHawsks reported an RBZ official as saying:
<blockquote>
When Mushayavanhu came in, there were already ZiG banknotes that were printed in large quantities and signed by Mangudya.
Mushayavanhu was initially expected to replace Mangudya whose 10-year term at the RBZ was due to end on 30 April 2024.
However, in a notice, President Emmerson Mnangagwa brought forward his appointment in an official gazette: (It is hereby notified that His Excellency the President has, in terms of section 14 of the Reserve Bank of Zimbabwe Act (Chapter 22:15) appointed John Mushayavanhu as the Governor of the Reserve Bank of Zimbabwe for a period of five years beginning on March 28, 2024, and ending on March 27, 2029′).
</blockquote>
Mushayavanhu’s tenure at the helm of the Central Bank started more than a month earlier so that he could take charge of the ZiG process.
RBZ officials were cited as saying Mushayavanhu did not want the new currency to be associated with Mangudya in any way, hence the already printed and signed notes had to be destroyed. Said an official:
<blockquote>
The ZiG notes that were signed by Mangudya and bore his signature had to be destroyed as Mushayavanhu wanted a clean break from the past and not to be associated with bond notes or any other currency version issued in the past.
For better or worse, Mushayavanhu’s attitude is that he is different from Mangudya and all his predecessors, which is why he says he will never print money, ‘not under my watch’.
The amount of liquidity in the market at the time was RTGS16.5 trillion (US$500 million).
The proportion of cash in market liquidity varies depending on the market, asset class, and economic conditions…
Now, in this case, cash was about US$50 million in the market and 5% of that had been printed, probably US$5 million which means that the RBZ under Mushayavanhu destroyed or burnt banknotes worth that.
</blockquote>
An RBZ official revealed that the RBZ had started printing ZiG notes well before the new currency was launched. Said the official:
<blockquote>
There was a liaison platform behind the scenes bringing together Mangudya and Mushayavanhu for a smooth transition.
Mangudya started the process and hoped Mushayavanhu would continue from where he left, only to discover that his successor — coincidentally another John — was not interested in that.
He wanted to draw a line and start afresh even though some ZiG notes had been printed.
Mangudya had built some gold and cash reserves which he handed over to Mushayavanhu to ensure he started on stronger footing, but the issue of who signs the ZiG notes became a moot point.
Mangudya thought there was nothing wrong with him signing some of them and Mushayavanhu some, with the ones signed by the former subject to be phased out from circulation gradually, but the latter wanted them out of the market before they were even formally introduced.
That ensured Mushayavanhu launched ZiG without notes, forcing the country and market to wait for a month while they were being printed.
This also implied that millions of dollars worth of banknotes signed by Mangudya had to be burnt or destroyed at a huge cost.
</blockquote>
ZiG notes only hit the market on 30 April, more than three weeks after the currency was launched because the printed notes had been withheld, destroyed and were being reprinted.
Authorities say ZiG is backed by US$575 million worth of reserves: foreign currency, gold, and other precious metals.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

RBZ Governor John Mushayavanhu Destroyed ZiG Banknotes Worth Millions | Report

President Emmerson Mnangagwa has said the Government worked on the Zimbabwe Gold (ZiG) currency for at least two years before its introduction.
ZiG was launched by the Reserve Bank of Zimbabwe’s new Governor John Mushayavanhu during his inaugural Monetary Policy Statement on April 5, 2024.
Speaking to Russian media outlets in St Petersburg, Russia, Mnangagwa said Zimbabwe has enough gold in its reserves to back the ZiG. He said (via <a href="https://www.sundaymail.co.zw/zig-wont-fail-says-president-weve-enough-gold-to-back-it">The Sunday Mai</a>l):
<blockquote>
The focus is on our currency, gold-backed, and we have worked for two years to have it. We have more than enough reserves to back the currency.
All along, we have been using other countries’ currencies and now we introduced a currency backed by gold, but we still have other currencies in circulation, and we are happy we have solid gold and solid currency backed by gold.
Before I introduced ZiG, we had researched for two years, and we realised we wanted a solid, structured gold reserve-backed currency.
We have more gold; I toured the reserves and saw the gold myself. Our economy is now based on solid fundamentals of the economy.
</blockquote>
ZiG has been the official currency of Zimbabwe since April 8, 2024. It is backed by foreign currencies, gold, and other precious metals.
Mnangagwa was in Russia for the 27th St Petersburg International Economic Forum at the invitation of the country’s leader, President Vladimir Putin.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

We’ve Adequate Gold Reserves To Back ZiG - Mnangagwa

Zimbabwe is experiencing a serious cash shortage that was exacerbated by the introduction of a new currency, the Zimbabwe Gold (ZiG).
The shortage of cash is negatively affecting aggregate demand as the informal sector, which employs the majority of Zimbabweans, relies on cash.
The Reserve Bank of Zimbabwe (RBZ) started circulating ZiG notes and coins on 30 April, about three weeks after the ZiG replaced the Zimbabwe dollar, which had lost three-quarters of its value this year.
The cash crunch has hit various sectors including transport, supermarkets and the informal market, thereby disrupting business.
Speaking to <a href="https://www.newsday.co.zw/thestandard/business/article/200026796/cash-shortages-hit-zimbabwe">The Standard</a>, economist Gift Mugano, blamed the Central Bank’s “incompetence” for the cash shortage. He said:
<blockquote>
We do not have enough ZiG from the central bank. The size of the money supply is about ZiG90 million and the size of our economy is about ZiG20 billion.
So, the question is how does the government liquidate and expect to provide enough cash in the market when you have that small share of ZiG?
The central bank has not printed enough ZiG.
Last time I checked, they had printed small denominations and as a result, they have starved the market.
That’s a failure, so the bank must print enough ZiG currency and enough denominations for the market.
At this stage we should not be struggling to access ZiG just for change, it’s serious incompetence on behalf of the central bank.
</blockquote>
Mugano warned that the scarcity of the ZiG could lead to increased dollarisation. He said:
<blockquote>
Even the governor (John Mushayavanhu) is very clear in his monetary policy that he is pushing for banks to put certain liquidity into non-negotiable instruments so that they dry the market.
What he does not realise is that he is finalising dollarization, because if ZiG is not available, what is available is the US dollar.
So we are going to use foreign currency. He effectively brought small denominations and delayed the disbursement of large denominations.
</blockquote>
Another economist Prosper Chitambara, told The Standard that the shortage of cash could be a result of a deliberate approach by the RBZ to avoid introducing too much liquidity into the economy which could result in inflation. Said Chitambara:
<blockquote>
It could be a supply issue; the central bank did not print enough money.
Maybe they are trying to monitor the situation because you do not want to introduce too much liquidity in the economy; it can actually have a destabilising impact on the economy.
Of course, there is a strong demand for the ZiG, especially to facilitate change.
So obviously, we need to create that fine balance in terms of ensuring that there is enough supply of ZiG.
</blockquote>
Bankers Association of Zimbabwe chief executive officer Fanwell Mutogo said:
<blockquote>
Banks, typically order cash from the central bank based on the demand for cash they anticipate from their customers.
We are not sure which customers are affected.
Moreover, customers are encouraged to use digital means of transacting.
This is part of a broader push towards digitisation, which can help reduce the reliance on physical cash, improve efficiency, and potentially alleviate some of the issues related to cash availability.
</blockquote>
The ZiG is Zimbabwe’s sixth attempt to deliver a functioning local currency since 2008 when hyperinflation destroyed the Zimbabwe dollar (ZWD).
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Cash Shortages Hit Zimbabwe, Economists Blame Central Bank

Local businesses are struggling to obtain foreign currency from banks to fund the procurement of inputs they require for production, a development that may result in the total rejection of the country’s new currency, the Zimbabwe Gold (ZiG).
ZiG was launched on April 5, 2024, to replace the Zimbabwe dollar but the new currency has struggled to find willing takers with most market players preferring to deal in foreign currency, mostly US dollars.
Currently, ZiG cannot be used to buy fuel, an imported commodity that requires foreign currency to purchase.
As reported by <a href="https://www.businessweekly.co.zw/businesses-struggle-to-get-forex-for-inputs/">Business Weekly</a>, Confederation of Zimbabwe Retailers president Denford Mutashu this week said that during a meeting to share notes with manufacturers recently, the producers said they were struggling to get from the banks the forex they need to procure inputs. Said Mutashu:
<blockquote>
The manufacturers, also, if you listen to their plight, it is realistic. Some manufacturers indicated that they are sitting on more than ZiG130 million, which they do not know what to do with because suppliers of raw materials are also demanding USD.
Someone indicated to me this afternoon that they also communicated with their bankers wishing to purchase foreign currency to import raw materials, but there have not been any favourable responses from the banks.
So I think that this whole matter (ZiG acceptance) rests with the Reserve Bank and the financial services sector.
There has gotta be a way to capacitate banks, lubricate banks, and oil banks so that they have sufficient foreign currency for supporting productive sectors.
</blockquote>
According to Business Weekly, a source revealed that despite the government’s claims that those in need of foreign exchange (forex) could obtain it from the interbank market, the actual situation on the ground indicated otherwise. Said the source:
<blockquote>
Banks have told businesses in no uncertain terms that they have no forex. There are more buyers than sellers on the willing buyer-will-seller market.
</blockquote>
Banks say the market has largely been dependent on export surrenders, but most exporters are holding on to their foreign currency, which explains the prevailing tight US dollar liquidity situation.
Bankers Association of Zimbabwe president Lawrence Nyazema said “RBZ has started selling reasonable amounts to banks against submitted pipelines, (but) customers with ZiG loans are disqualified, according to the rules.”
He, however, noted that there have been some improvements in the supply of forex over the last couple of weeks.
Farai Mutambanengwe, an economist and the Small and Medium Enterprises Association of Zimbabwe chief executive said:
<blockquote>
I think there is a lot of confusion in the market. When it was initially pronounced, we were told it (ZiG) was backed, (including with US dollars), but now it turns out that you cannot get US dollars at the bank even if you have ZiG.
Also, those people who were in the foreign exchange queue, for their ZWL have been converted into Treasury Bills. When you then force people to accept ZiG it will not work. Some players are now stuck with the ZiG…
People will not accept ZiG because they do not understand what it is worth.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Industry Sitting On Millions Of ZiGs, Banks Don't Have Forex For Inputs

The Zimbabwe Government will penalise individuals and companies charging prices above the prevailing official foreign exchange rate.
The official exchange rate in the economy is set daily by the Reserve Bank of Zimbabwe (RBZ).
Offending firms and individuals will be fined ZiG200 000, but if the foreign currency taken in is higher in value, then the penalty equals that foreign currency.
Furthermore, the 10 per cent premium that retailers were allowed on the official exchange rates between foreign currency and the ZiG has now been abolished.
The changes were made through Statutory Instrument 81A of 2024, Exchange Control (Amendment of Schedule to Exchange Control Act) Notice, 2024, gazetted on Thursday, 09 May. Reads the Statutory Instrument:
<blockquote>
Exchange Control (Amendment of Schedule to Exchange Control Act) Notice, 2024
THE Minister of Finance, Economic Development and Investment Promotion, in consultation with His Excellency the President, in terms of section 11(2) of the Exchange Control Act [Chapter 22:05], hereby makes the following notice: —
Title
1. This notice may be cited as the Exchange Control (Amendment of Schedule to Exchange Control Act) Notice, 2024.
Substitution of Paragraph 2(12)
2. Paragraph 2 (“Power of Reserve Bank to issue civil penalty order”) of the Schedule (“Civil Penalty Orders”) to the Exchange Control Act [Chapter 9:23] is amended by the repeal of subparagraphs (12) and (13) and the substitution of the following subparagraphs —
“(12) A natural or legal person shall be guilty of a civil infringement if he or she, being a seller of goods or services, offers such goods or services at an exchange rate above the prevailing average interbank foreign currency selling rate published by the Reserve Bank of Zimbabwe.
(13) In the event of default in complying with subparagraph (12), the civil penalty shall provide for-
(a) a combination of-
(i) a fixed penalty of two hundred thousand ZiG or an amount equivalent to the value of the foreign currency charged for the goods or services in question (whichever is the greater amount); and
(ii) a cumulative penalty over a period not exceeding ninety days of five per centum of the outstanding amount of the fixed penalty for each day (beginning on the day after the service of a civil penalty order) that the fixed penalty or any outstanding amount thereof remains unpaid by the defaulter;
(b) the suspension of the operation of the civil penalty order for a period of 48 hours from the date of its issuance to enable the alleged defaulter to show cause to the designated officer why the order should not have been issued:
Provided that-
(i) if no such cause is shown within that period the order shall be deemed to have been issued with effect from the beginning of such period;
(ii) if within that period, good cause is shown why the order should not have been issued, the designated officer shall withdraw the order and make the appropriate notation of withdrawal in the civil penalty register.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe To Impose Fines On Companies Not Using Official ZiG Exchange Rate

<h2>Statement by the Minister of Finance, Economic Development and Investment Promotion Mthuli Ncube on the transition from ZWL to the new currency Zimbabwe Gold (ZiG) and measures to promote market adoption and acceptance:</h2>
<blockquote>
The Ministry of Finance, Economic Development and Investment Promotion is pleased to announce the transition from the Zimbabwean Dollar (ZWL) to the new currency, the Zimbabwe Gold (ZiG), following the recent announcement of the 2024 Monetary Policy Statement by the Governor of the Reserve Bank of Zimbabwe (RBZ) on the 5th of April, 2024.
Statutory Instrument 60 of 2024, Presidential Powers (Temporary Measures) legalised and operationalised the new currency, thus Government and banks immediately started transitioning to these new currency arrangements.
As Government continues to configure its Public Finance Management System (PFMS) to facilitate revenue collection and payment for goods and services in local currency, all Ministries, Departments, and Agencies (MDAs), and the private sector alike, are hereby advised to accept and recognise the ZiG as the official currency for all financial transactions, and payment for all goods and services, effective immediately.
The ZiG is a gold-backed currency that has been introduced as part of Government efforts to stabilise the economy, restore confidence in the financial system and provide a conducive business environment.
In order to stabilise the value of the ZiG, Government has introduced a liberalised foreign exchange market where the exchange rate is freely determined by the banking system based on demand and supply.
This is supported by a pool of gold and foreign exchange reserves at the RBZ which is more than adequate to back the local currency money supply in circulation.
The availability of such reserves will ensure that all bonafide and legitimate requests for foreign exchange made through the banking system will be fully satisfied.
It should be noted that since the exchange rate is market-determined, there is no basis for private and public organisations and economic agencies to use any other exchange rate in the pricing of their goods and services other than the prevailing average interbank foreign currency selling exchange rate as published by the Reserve Bank of Zimbabwe.
To ensure orderly pricing, Government will soon be introducing the necessary regulations to ensure that no exchange rate other than the official rate will be used for the pricing of all goods and services.
In light of this, the Ministry emphasises the urgency and importance of a swift transition and market adoption of the ZiG by all stakeholders.
We call upon all MDAs and the private sector including retailers, and service providers to accept the ZiG in all financial transactions, including payments of salaries as well as for procurement. This collective effort will contribute to the smooth transition towards a more stable economic environment.
Furthermore, unless there is specific legislation allowing charges or fees to be collected in USD only, all collections by Government and the private sector shall be made in ZiG or any of the currencies in the multi-currency basket without insisting on a specific type of currency or indexing invoices to the USD.
We urge the media fraternity to support the Government by widely publicising the new currency in order to promote acceptance and adoption by the market.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Mthuli Urges Govt Ministries, Departments, Private Sector To Accept ZiG

Zimbabwe’s new currency, Zimbabwe Gold (ZiG), on Monday, 06 May, weakened to its lowest level against the US dollar since it was launched last month, further raising concerns about the long-term viability of the gold-backed currency.
Data by the Reserve Bank of Zimbabwe (RBZ) yesterday shows the currency was trading at 13.67 to the US dollar, a decline of 0.8% from its first day of trading at 13.56 per dollar on April 8.
Crispus Nyaga, writing for <a href="https://invezz.com/news/2024/05/07/usd-to-zig-heres-why-the-zimbabwe-currency-is-crashing/">invezz</a>, outlines several factors that contributed to ZiG’s decline. He wrote:
<blockquote>
First, many Zimbabweans are afraid of getting involved in this experiment since they have been burned before. People and businesses that bought and held the previous currencies have seen their purchasing power fall over the years.
Second, this is an experiment that has not been tried in other countries before. The most recent dollar-backed currency was the US dollar. President Richard Nixon ended the dollar peg to curb inflation and the conversion became difficult.
In ZiG’s case, it is unclear what will happen if there is a strong demand for the currency. At the current price, the 2.5 tons of gold are worth over $186 million, bringing the total holdings to $286 million. These funds are barely enough to back the currency.
Third, the ZiG token is different from other backed assets, including stablecoins. In the case of a stablecoin like Tether, users redeem their USDT tokens with fiat currency instantly. It is not possible to redeem any amount of ZiG tokens for gold or US dollar equivalent.
It is also unclear whether Zimbabwe’s neighbouring countries like South Africa, Zambia, and Mozambique will accept the ZiG currency.
Finally, Zimbabwe is mostly a dollar-based economy. Data shows that the greenback is used in over 80% of all transactions in the country. 
</blockquote>
Last month, the Central Bank said ZiG was not yet recognised internationally and could not be used to make international payments as it has not yet achieved convertibility. It said:
<blockquote>
ZiG is a local currency that has just been launched and has not yet achieved convertibility. The Bank will work to strengthen the currency to attain full convertibility, consistent with the regional agenda for macroeconomic convergence under the SADC Protocol on Finance and Investment.
</blockquote>
ZiG replaced the Real Time Gross Settlement Dollar (RTGS) and subsequently the Zimbabwe dollar, which lost about 80% of its value this year alone and had been trading at 28,720 to US$1 before the change.
It is Zimbabwe’s sixth attempt to have a stable currency. The previous Zimbabwe dollar was launched in 2019 and collapsed this year.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Here’s Why The ZiG Currency Is Weakening

The World Bank has refuted claims that it played a key role in the conception and launch of Zimbabwe’s new currency, the Zimbabwe Gold (ZiG).
Reserve Bank of Zimbabwe (RBZ) governor John Mushayavanhu recently revealed that Zimbabwean authorities did not know much about structured currency and engaged a World Bank consultant before introducing ZiG.
But speaking to The NewsHawks, the World Bank stated that it only offers policy advice to member states, which then make the final decisions on policy implementation. The bank said:
<blockquote>
We are committed to supporting the government of Zimbabwe in its efforts towards the country’s economic recovery.
This aligns with our goal to create a world free of poverty on a livable planet. This support includes technical expertise and in-depth research and analysis on sectors, such as the latest Zimbabwe Economic Update.
It also includes perspectives on policy and development challenges at the request of clients. Governments tailor this advice to their contexts and ultimately make the final decisions on policy implementation in their countries.
</blockquote>
During an address to business executives soon after the launch of ZiG, Mushayavanhu said the World Bank was instrumental in the introduction of ZiG.
He said he was not to blame for ZiG’s perceived shortcomings, adding “So, if you’re going to blame me, you’re actually blaming the World Bank.” He said:
<blockquote>
We didn’t know much about structured currency. We got a consultant from the World Bank. A lot of the things you’re seeing about the structured currency actually came from the World Bank. So, if you’re going to blame me, you’re actually blaming the World Bank.
Maybe they didn’t advise us properly. And if they did not advise us properly, it’s fine. Let’s refine it.
</blockquote>
Mushayavanhu, has, however, since backtracked from his claims, saying ZiG was a well-thought-out and purely Zimbabwean idea.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

World Bank Distances Itself From Zimbabwe’s New Currency, ZiG

Reserve Bank of Zimbabwe (RBZ) governor John Mushayavanhu on Thursday made a U-turn on the phasing out of Zimbabwe dollar notes saying they remain legal tender until further notice.
When he launched the new currency, Zimbabwe Gold (ZiG) on 5 April 2024, Mushayavanhu said the “bond notes” would be phased out by the end of that month and he gave citizens 21 days to convert them to ZiG.
However, in an interview with StarFM, Mushayavanhu said the bond notes will remain in use, co-circulating with ZiG notes indefinitely. He said:
<blockquote>
We are currently allowing them (bond notes) to co-circulate. And we will let the market know when the volumes of bond notes coming through have thinned out.
We will then advise a date to say, “After such and such a date, we will no longer be accepting bond notes”.
But for now, let them come through. We don’t want a situation where someone is sitting on bond notes and they are deep in the rural areas.
</blockquote>
The Central Bank chief added that the RBZ wants to collect as many ZWL notes before giving “a final deadline.”
The bond notes, which are in ZWL$100 denominations, will co-exist with ZiG, whose notes came into circulation on Tuesday, 30 April.
Coins and the ZiG10 were released first and have since been accessed by the public but are yet to fully address the problem of change.
Citizens have criticized authorities for not thoroughly considering their policies before implementation. When Mushayavanhu announced that the Zimbabwe dollar would no longer be legal tender after 21 days, traders promptly began rejecting bond notes.
Consequently, consumers faced challenges purchasing items priced below US$1 and obtaining change, as bond notes were mainly used for smaller transactions.
Furthermore, the RBZ announced the introduction of a new currency but did not avail coins and notes, and citizens endured nearly a month of waiting before receiving the new currency in physical form.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

RBZ Backtracks On Phasing Out Bond Notes

A private school in Harare, Westminster International School, has allegedly pegged the rate of one US dollar at ZiG23, way above the official US$1: ZiG 13.44 as of Monday, 29 April.
According to <a href="https://www.hmetro.co.zw/city-school-pegs-one-usd-at-23-zig/">H-Metro</a>, the private college was exchanging one US dollar at ZiG23 last week and made it clear it could change. Last week the official rate was US$1: 13.56 ZiG.
Parents, who are paying their fees for the second term, have been asked to pay the fees either in US dollars or the local currency.
However, the local currency fees, when converted, show that the school is using a rate which is not the official one.
Those who are paying in USD will have to fork out US$1 818, and those who choose to pay in ZiG will have to fork out ZiG 41 814. This should have been 24 652 ZiG if the school was using the official rate.
One parent who spoke to H-Metro appealed to the Government to intervene and ensure that the school uses the official rate. Said the parent:
<blockquote>
We are being robbed. The school is not being considerate, their charges are already high and they are now adding salt to the wound by using black market rates.
We are appealing to relevant authorities for protection for us not to be fleeced.
</blockquote>
When H-Metro reporters visited the school, security guards reportedly denied the newspaper entry into the premises, but some parents, who were making payments, were allowed to enter.
Reserve Bank of Zimbabwe Governor John Mushayavanhu launched ZiG on 05 April 2024, but the new structured currency has faced resistance from some quarters who fear it is the bond note by another name.
The Consumer Council of Zimbabwe (CCZ) recently said the government should take the lead in accepting payment in ZiG. It stated that government departments, including passport offices, fuel stations, and tax authorities, should demand payment in ZiGs.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Private School Pegs US$1 At 23 ZiG | Report

The Reserve Bank of Zimbabwe (RBZ) has set the weekly cash withdrawal limits at ZiG3 000 for individuals and ZiG30 000 for corporates.
Central Bank Governor John Mushayavanhu said the bank will begin distributing the ZiG banknotes and coins to commercial banks tomorrow (Monday).
Members of the public will start withdrawing cash from their accounts on Tuesday, 30 April 2024.
In an interview with <a href="https://www.sundaymail.co.zw/weekly-zig-withdrawal-limit-set">The Sunday Mail</a> on Saturday, Mushayavanhu said the RBZ has already communicated with banks on the cash withdrawal limits. He said:
<blockquote>
All banks will start collecting cash from the Reserve Bank of Zimbabwe on Monday (tomorrow).
We have since communicated with them, including giving them a communiqué on the cash withdrawal limits.
Banks have already been advised on the maximum limits for withdrawal by individuals, corporates, schools and Government.
</blockquote>
The RBZ’s Financial Intelligence Unit (FIU) issued a directive to local banks dated April 10, advising them about the cash withdrawal limits. It reads in part:
<blockquote>
In view of the introduction of the new structured currency, ZiG, through the Reserve Bank Governor’s Monetary Policy Statement on April 5, 2024, the following ZiG cash withdrawal limits shall apply.
Individuals: ZiG3 000; corporates: ZiG30 000; schools, hospitals, clinics and local authorities: ZiG250 000 (monthly); Government ministries and departments ZiG300 000 (monthly).
</blockquote>
The directive did not limit cash withdrawals by Parliament, courts and international organisations.
It says withdrawal limits for United States dollar accounts remain unchanged. Reads the directive:
Banks are required to undertake due diligence when processing cash requests for customers to ensure the facility is not used for criminal activities.
Where a customer has a valid need to withdraw cash above the stipulated limit, the bank shall continue to submit such an application to the FIU, clearly setting out the special grounds for the request.
The FIU will not grant any such requests unless satisfied that no other forms of payment are reasonably available to the customer.
The RBZ previously stated that the ZiG notes and coins will be drip-fed into the market in denominations ranging from ZiG1 to ZiG200.
The ZiG coins will be issued in denominations of one ZiG, two ZiG and five ZiG. ZiG banknotes are denominated in 10ZiG, 20ZiG, 50ZiG, 100 ZiG and 200 ZiG.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

RBZ Sets ZiG Withdrawal Limits

Air Zimbabwe has become the latest airline to accept ZiG payments for ticket purchases, days after low-cost airline Fastjet Zimbabwe, began accepting payments in the gold-backed currency.
The national airliner announced the development via its social media pages, saying the move “reflects our commitment to adapt to the evolving financial landscape”. Reads the statement:
<blockquote>
We are pleased to advise that Air Zimbabwe accepts ZiG payments for ticket purchases through our sales offices.
This move reflects our commitment to adapt to the evolving financial landscape and offer our stakeholders convenient payment options.
As we integrate Zimbabwe Gold currency into our payment systems, we are finalizing the process for its acceptance on our online payment platform.
We understand the importance of providing seamless and secure online transactions, and we are working diligently to ensure that this option is available to our valued customers.
Air Zimbabwe remains dedicated to providing excellent service to our passengers while embracing innovative solutions that benefit both our customers and the economy.
We appreciate the continued support of our stakeholders as we navigate these changes together.
</blockquote>
The Reserve Bank of Zimbabwe (RBZ) introduced the ZiG currency on April 5 with businesses, especially supermarkets, recording a huge jump in daily sales.
The currency is backed by gold, which means its value is tied to the precious metal.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Air Zimbabwe Embraces ZiG Currency

The Reserve Bank of Zimbabwe (RBZ) has launched the second phase of awareness campaigns for the new structured currency, the Zimbabwe Gold (ZiG).
The central bank is working with the Ministry of Information, Publicity and Broadcasting Services and the Parliament of Zimbabwe to reach every corner of the country.
RBZ Governor John Mushayavanhu on Thursday, 25 April, said they decided to work with the Ministry of Information because it has got the reach of the whole country through the media, and Parliament because legislators represent the people. He said:
<blockquote>
And if you go through the Members of Parliament, you will be able to reach all corners of the country and also these are the people who the people elected and they can guide us and help us to spread this message. So we are embarking on this campaign starting immediately.
</blockquote>
Mushayavanhu said the second phase of awareness campaigns of the ZiG is targeted to reach all parts of the country after realising that some communities had been left out. He said:
<blockquote>
As we were doing the rounds, the message that kept coming to us was ‘we were not going far enough’; we were not reaching all the corners of the country and the people out there were asking what is ZiG? What is a structured currency? What difference is it going to make? How different is it from the RTGS?
Are we not doing the same things over and over again and expecting different results, but without changing anything?
And arising from that, we felt it necessary that we embark on an extensive and intensive campaign to try and educate the public on this new structured currency.
</blockquote>
The teams going out to the districts and villages have been charged with educating the public on the new currency, ZiG, which replaced the Zimbabwe dollar as legal tender.
ZiG will co-circulate with other foreign currencies as the multi-currency regime will remain in place until 2030.
Meanwhile, Mushayavanhu announced that the ZiG 1 to 5 denominations, initially planned as notes, will now be issued as coins. The ZiG 10, 20, 50, 100, and 200 denominations will be introduced as banknotes.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

ZiG: RBZ Launches Second Phase Of Awareness Campaigns

Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu has conceded that Zimbabwean authorities did not know much about structured currency and engaged a World Bank consultant before the launch of ZiG.
During a recent address to business executives, Mushayavanhu said he was not to blame for ZiG’s shortcomings as most of the input came from the World Bank official. He said:
<blockquote>
 We didn’t know much about a structured currency. We got a consultant from the World Bank. A lot of the things you’re seeing about the structured currency actually came from the World Bank.
So, if you’re going to blame me, you’re actually blaming the World Bank. Maybe they didn’t advise us properly. And if they did not advise us properly, it’s fine. Let’s refine it.
</blockquote>
On 17 April 2024, while addressing business leaders at a Zimbabwe National Chamber of Commerce (ZNCC) organised meeting in Gweru to unpack the new Monetary Policy Statement (MPS), Mushayavanhu said ZiG was invented by the Confederation of Zimbabwe Industries (CZI), and not by the Central Bank. He said:
<blockquote>
Consultations before the MPS were made, yes. My appointment was announced on December 8, but His Excellency told me on September 11 that I was going to be the Governor of RBZ.
So, I started working as Governor from as far back as September 11 and we consulted far and wide. We didn’t come to Gweru, but we spoke to the Chamber of Mines, ZNCC, Retailers Association, and CCZ, and you will be surprised to note that most of the input came from the stakeholders.
We borrowed a lot from a paper that was presented by CZI. We didn’t invent ZiG; it was invented by CZI.
They are the ones who said to us that when we look at the amount of RTGS/bonds in circulation if we convert them, we can buy it all and start afresh. This came from CZI and so we consulted far and wide.
</blockquote>
Some Zimbabweans have embraced ZiG, while others remain sceptical and believe it will eventually fail just like the RTGS and bond notes. ZiG was introduced by the Reserve Bank under SI 60/2024.
Renowned economic analyst Daniel Silke <a href="https://www.forbesafrica.com/current-affairs/2024/04/08/can-zimbabwes-new-gold-backed-currency-solve-its-economic-woes-experts-weigh-in/">warned</a> against expecting ZiG to solve Zimbabwe’s economic woes on its own, likening the launch of the new currency to putting a plaster over a wound rather than treating the underlying causes
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

"Maybe They Didn't Advise Us Properly", Mushayavanhu Blames World Bank For ZiG Shortcomings

Wide consultations involving economic players such as the Confederation of Zimbabwe Industries (CZI), and other key stakeholders preceded the launch of the Zimbabwe Gold (ZiG) currency.
This was said by Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu while addressing business leaders at a Zimbabwe National Chamber of Commerce (ZNCC) organised meeting in Gweru yesterday to unpack the new Monetary Policy Statement (MPS). He said:
<blockquote>
Consultations before the MPS were made, yes. My appointment was announced on December 8, but His Excellency told me on September 11 that I was going to be the Governor of RBZ.
So, I started working as Governor from as far back as September 11 and we consulted far and wide. We didn’t come to Gweru, but we spoke to the Chamber of Mines, ZNCC, Retailers Association, and CCZ, and you will be surprised to note that most of the input came from the stakeholders.
We borrowed a lot from a paper that was presented by CZI. We didn’t invent ZiG; it was invented by CZI.
They are the ones who said to us that when we look at the amount of RTGS/bonds in circulation if we convert them, we can buy it all and start afresh. This came from CZI and so we consulted far and wide.
</blockquote>
Mushayavanhu insisted that the Central Bank’s operations were independent with no Government interference as spelt out in the RBZ Act. He said:
<blockquote>
We are not subject to interference by the Ministry of Finance and Economic Development. I want to assure you that when I went to the Central Bank, the first thing I was interested in was to confirm whether or not the Ministry of Finance was dipping into the coffers of the Central Bank whenever they felt like it.
I could not find an occurrence when the ministry used its overdraft facility whenever it wanted. The Ministry of Finance is running a surplus budget and if anything, we handle their deposits and we see how they are running their accounts every day.
</blockquote>
The Reserve Bank chief said the idea behind the Monetary Policy Statement (MPS), was to ensure that the new currency was acceptable and stable. Said Mushayavanhu:
<blockquote>
Once we do that, we create an acceptable currency. Remember with the currency we had in the past, as soon as one got the RTGS in the account, they made sure that by the end of the day, they would have changed it to US dollars at whatever price.
But we want to create a stable currency, which you can sell and that way you see people banking the extra money they have and start building up towards something they will be investing in.
</blockquote>
The ZiG was launched on 05 April 2024 to replace the inflation-hit Zimbabwe dollar, which had fallen to around $33 000 against US$1 on the interbank market and traded above $40 000 to US$1 on the parallel market.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

ZiG Is A CZI Invention, Not Reserve Bank - Mushayavanhu

Civil servants have begun receiving their salaries in the new ZiG currency, yet concerns persist regarding its market performance and value stability.
Minister of Finance, Economic Development and Investment Promotion, Mthuli Ncube, said civil servant salaries for April will be paid on time. He said electronic ZiG payments will be deposited into accounts on scheduled paydays.
Civil servants who spoke to <a href="https://cite.org.zw/civil-servants-receive-zig-salaries-but-concerns-linger/">CITE</a> expressed scepticism over the new currency, saying it would also end up depreciating like the previous ZWL currency. A teacher who identified himself as Witness Moyo, said:
<blockquote>
Firstly, hard cash in ZiG will not be available until the end of April, that is what the Reserve Bank of Zimbabwe said, now what kind of currency is that when it is unveiled, you are told there is no hard cash?
I see no difference from bearer cheques and bond notes. The only difference is the name.
We’ll just see it depreciating day in and day out. Already some outlets that belong to well-known individuals are using a rate of US$1 to ZiG18 yet they tell people they are using the bank rate.
This is the same way that happened to its predecessor ZWL notes. Another bad omen is why can’t ZiG purchase fuel.
</blockquote>
Emmanuel Sibanda said that citizens would suffer because “businesses don’t want ZiG” as some goods such as fuel, are sold exclusively in foreign currency. He said:
<blockquote>
Our lives will be controlled by the government as we will now have to buy at government-friendly shops that accept the ZiG.
We will not be in control of our expenditure because the value of the ZiG is determined by external factors that can ultimately lead to hyperinflation. The usual story is there is the government rate and business rate.
</blockquote>
Minister Ncube said the Treasury will build a mechanism in anticipation of external shocks since the ZiG currency is backed by hard assets such as gold. He said:
<blockquote>
What is happening is that our exchange rate is being driven, not just by the price of hard assets like gold but also, we take into account what we call effective exchange rate which is the inflation differentials between our country and other countries.
That inflation differential is also known as the purchasing power parity. What happens is that when there is a shock, those shocks usually show up in inflation shocks.
So, by taking into account those inflation differentials, we can take into account part of the shocks.
</blockquote>
The Government introduced the gold-backed currency earlier this month to stabilise the economy and prevent currency devaluation like its predecessors.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Civil Servants Receive ZiG Salaries, Amid Concerns Over Value Stability

Civil servants say they have no choice but to accept the newly-introduced Zimbabwe Gold (ZiG) currency but said the government needs to build confidence amongst the citizens, especially on how the new currency is going to impact the payment of government services.
In an interview with <a href="https://tellzim.com/zig-another-currency-crisis/">TellZim News</a>, Zimbabwe Confederation of Public Sector Trade Unions’ (ZCPTSU) Secretary General David Dzatsunga said that they expect the government to educate them on its implications on taxes, duty, fuel, education, and health care among other critical issues. Said Dzatsunga:
<blockquote>
From the ZCPTSU perspective, the initiative to carry out currency reform was vitally necessary given the free fall of the ZWL. As for the ZiG, the jury is still out as to how it is going to impact the welfare of workers.
Having been introduced without much prior consultation, the authorities have to educate us on its implications on taxes, duty, fuel, education, and health care among others.
While we have no choice but to embrace it and strive to make it a success as workers and citizens alike, there is still a ton of confidence-building to be done so that citizens can truly believe we have found a panacea to our perennial currency problem.
</blockquote>
Dzatsunga also said civil servants prefer the USD as acceptance of the ZiG would be based on its performance. He said:
<blockquote>
As long as we have a basket of currencies workers still prefer the strongest of them. Much will depend on the performance of the ZiG and on whether we will not have to go to the parallel market to get value.
</blockquote>
Earlier this month, the Reserve Bank of Zimbabwe (RBZ) launched ZiG to stabilise the volatile exchange rate.
While businesses rushed to reconfigure their system to adapt to the ZiG, one of the biggest concerns is whether it will create a parallel currency market — one of the biggest threats to exchange rate stability.
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Civil Servants Have No Choice But To Embrace ZiG - Dzatsunga

The Minister of Finance, Economic Development and Investment Promotion, Mthuli Ncube, has pleaded for patience following the recent introduction of Zimbabwe Gold (ZiG) currency which has inconvenienced the transacting public, <a href="https://www.newsday.co.zw/local-news/article/200025513/mthuli-pleads-for-patience-on-zigas-citizens-struggle-to-transact">reported NewsDay</a>.
The Reserve Bank of Zimbabwe (RBZ) launched ZiG on Friday last week resulting in Zimbabweans being shut out of electronic banking platforms for days as service providers configured their systems to transition from Zimbabwe dollars to ZiG.
Furthermore, the RBZ said ZiG notes and coins will be released to the market on April 30 and this has caused a “change” crisis as traders rejected the Zimbabwe dollar notes, with the US$1 note now the lowest denomination where the Rand is not widely used.
Addressing lawmakers in Parliament on Wednesday this week, Ncube pleaded with members of the public to be patient as the transition from Zimdollar to ZiG continues. He said:
<blockquote>
Again, if you could be patient and bear with the Reserve Bank; they have really done their best.
It is not surprising that maybe one or two things did not happen as anticipated and on time. It is just a complex issue, but I think that the public will understand.
You have to print new money; you have to make sure the gold in our case is in place, and the diamond is in place. There are just so many variables and I hope you will understand.
</blockquote>
Ncube urged the Zimbabweans to have confidence in the ZiG and to be proud of their currency. He said:
<blockquote>
As the government, we would want this to be acceptable, that citizens have confidence and you can only build that confidence if you communicate and explain how it works in simple language.
We believe that educating the public about the design of the currency and how it has been put together will give them that level of confidence.
I would like to urge members of the public to have confidence in ZiG and use it all the time. It is everyone’s currency, and we should be proud of it. After all, a country derives pride from its currency.
</blockquote>
The Finance Minister also warned those rejecting the Zimdollar that law enforcement agencies are coming after them.
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Mthuli Ncube Pleads For Patience As ZiG Launch Disrupts Commerce

Zimbabwean-born economist, Gareth Horsfield, says the recent introduction of a new currency, Zimbabwe Gold (ZiG) to replace the Zimbabwe dollar, is akin to putting the cart before the horse as the country does not have the conditions to sustain it.
Horsfield said that Zimbabwean authorities should first restore confidence in the financial system, put in place strong economic fundamentals, and increase production to reduce dependence on imports which drain foreign currency, among other things for a new currency to have any chance of success. He wrote:
<blockquote>
<h2>Zimbabwe’s New Structured Currency: Putting the Cart Before the Horse</h2>
Introducing a new currency in a country comes with a complex set of challenges and considerations, particularly in an economy like Zimbabwe, which has faced significant financial instability over the years.
There are several reasons why introducing a new currency in Zimbabwe may not yield the expected outcomes or could potentially exacerbate existing economic issues.
<h2>Historical Context and Economic Instability</h2>
Zimbabwe has a history of hyperinflation, most notably from 2004 to 2009, which led to the abandonment of the Zimbabwean dollar in favour of a multi-currency system that included the US dollar and the South African rand.
This history plays a crucial role in understanding the scepticism surrounding the introduction of a new currency.
Hyperinflation led to a loss of confidence in the local currency, making recovery and re-establishment incredibly difficult.
<h2>Lack of Confidence in the Financial System</h2>
Confidence in the financial system and the stability of a currency is crucial for its acceptance and functionality.
Given Zimbabwe’s history of hyperinflation, the public’s trust in any form of local currency has been severely eroded.
Introducing a new currency requires building this trust anew, a process that can take years, if not decades, of stable economic policies and practices, something Zimbabwe has struggled with.
<h2>Economic Fundamentals</h2>
For a new currency to be successful, there needs to be a strong and stable economic foundation. This includes a stable inflation rate, robust fiscal policies, and strong governance structures to manage the economy effectively.
Zimbabwe’s economy has faced challenges such as high unemployment, a decrease in industrial production, and governance issues that undermine the potential success of a new currency.
<h2>Dependency on Imports and Foreign Currency</h2>
Zimbabwe’s economy is heavily dependent on imports for basic goods and services, which necessitates a strong demand for foreign currency.
Introducing a new local currency could lead to a devaluation against stronger foreign currencies, increasing the cost of imports and potentially leading to inflation.
This reliance on imports and the need for foreign currency make it difficult for a new currency to establish itself as a stable medium of exchange.
<h2>Social and Political Challenges</h2>
The introduction of a new currency is not just an economic issue but also a social and political one. It requires the buy-in from various stakeholders, including businesses, the general public, and international partners.
In Zimbabwe, where political tensions and social unrest have been prevalent, achieving this consensus is challenging.
Political instability can further undermine confidence in any new currency, making its adoption and acceptance more difficult.
<h2>Comparative Examples</h2>
Looking at other countries that have successfully introduced new currencies, it is clear that certain conditions need to be met, such as political stability, strong economic fundamentals, and public confidence.
These conditions are not easily met in Zimbabwe’s current context, making the successful introduction of a new currency more challenging.
In conclusion, while the idea of introducing a new currency in Zimbabwe might seem like a potential solution to its economic problems, the realities on the ground present significant obstacles.
Historical economic trauma, lack of confidence in the financial system, unstable economic fundamentals, dependency on imports, and social and political challenges all contribute to the scepticism around the success of such a measure.
For a new currency to have any chance of success, Zimbabwe would need to address these underlying issues comprehensively and convincingly, a task that requires time, political will, and economic stability.
</blockquote>
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"Zimbabwe Lacks Fundamentals To Sustain New Currency"

Nigel Chanakira, a renowned businessman and economist, has said the acceptance of the new currency, ZiG, will be difficult given that the market still prefers the greenback.
He was speaking at a post-2024 Monetary Policy and Outlook Conference on Tuesday which was hosted by NewsDay’s sister paper Zimbabwe Independent.
Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu launched ZiG on Friday last week scrapping the Zimbabwe Dollar after the latter had depreciated by more than 70% since January this year.
As reported by <a href="https://www.newsday.co.zw/local-news/article/200025450/zig-difficult-to-accept-in-us-dominated-market">NewsDay</a>, Chanakira asked the conference attendees who were close to 200 to show by raising of hands, which currency they preferred between the US dollar and ZiG. All of them chose the US dollar.
The “survey” raised doubts about ZiG’s longevity and revealed a significant divide between the monetary authorities and the market, as observed by Chanakira. He said:
<blockquote>
I am not sure we are there yet in terms of anchoring our new currency in a context where you can trust it, and believe it…
We need to get back to basics. What is the role of a currency in an economy? How do we produce goods and services and how do we measure the volume of those goods and services and compete in a global economy?
</blockquote>
According to Brains Muchemwa, the chief executive officer of Oxlink Capital, the government’s decision not to require all taxes to be paid in ZiG indicates a lack of interest in the local currency. Said Muchemwa:
<blockquote>
The government has no interest whatsoever in the local currency and I think the conversations in the monetary policy should really be between the RBZ and the Ministry of Finance. Those are the two people that should be having these conferences.
The RBZ on this side and Treasury on that side and the RBZ trying to convince the Ministry of Finance that guys you can’t be asking us to issue a currency that you do not want to support.
The currency is not supported by the central bank as many people would think, that’s not the case and that’s why for many years everything that they have tried has failed because the currency is supported by its issuer and in this instance, its issuer is the government of Zimbabwe.
</blockquote>
Muchemwa added that the government should impose value-added tax (VAT) and PAYE tax exclusively in ZiG, demonstrating confidence in the currency.
Employers’ Confederation of Zimbabwe economist Misheck Ugaro had this to say:
<blockquote>
Business was hoping that we would get an MPS which can now set us in a direction which can localise our costs.
The biggest problem we have in business is that our cost base is US$-based and that makes us very uncompetitive so we were looking for a Monetary Policy Statement position that can fit the localisation of those costs.
So, we are for localisation from US$ to local currency. As to whether the ZiG is the answer, is another question, the jury is out but the spirit is acceptable.
I can say that in the Tripartite Negotiating Forum (TNF) two of the positions that had been put forward are manifesting in this policy the first one being government must tax in local currency.
</blockquote>
Ugaro asserted that the business community expressed dissatisfaction because the taxes to be paid in ZiG were only partial, rather than the full 100%.
ZiG represents Zimbabwe’s sixth attempt to establish a functional local currency. This new currency is backed by 2,522 kilograms of gold and approximately $100 million in foreign currency reserves held by the central bank.
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ZiG Difficult To Accept In USD-Dominated Market - Chanakira

The Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu has reiterated that the Zimbabwe dollar remains legal tender for all domestic transactions until April 30, when the Zimbabwe Gold (ZiG) notes and coins will come into circulation.
This comes after some traders, public transport operators and members of the public, stopped accepting the Zimbabwe dollar notes in response to the introduction of the “structured currency”.
During a 2024 Monetary Policy Statement breakfast meeting in Harare on Tuesday, 09 April, Mushayavanhu said that Zim dollar notes remain legal tender, and banks can continue to dispense them to their customers. He said:
<blockquote>
Between now and April 30, 2024, the bond notes are still legal tender; banks can pay them out to customers, and people should be able to use those to transact and for change. It is only after the 30th that we will be introducing the new notes and coins.
On Saturday, a day after he announced the launch of ZiG, Mushayavanhu said that the central bank will conduct an extensive educational and awareness campaign on the new currency’s structure and security features before the notes and coins are released on April 30.
</blockquote>
The central bank chief on Tuesday also sought to assure the public that ZiG was going to be a stable currency. He said the new currency had already started appreciating after gaining in Monday and Tuesday trading sessions on the interbank market. He said:
<blockquote>
If you are a retailer and you put a 10 per cent margin, you are most likely to be outside the market. You cannot put 10 per cent on top of a stable exchange rate, so you are going to moderate yourselves.
If you do not apply it and take the interbank exchange rate, you are not flouting the law, but if you apply more than 10 percent, you will be above the official exchange rate of 13,50 ZiG and (You will be around) probably 14 ZiG, hence you will price yourself out of business and will not be able to sell your products.
</blockquote>
Mushayavanhu said Statutory Instrument 185 of 2020 which authorises dealers and the market to price goods and services based on the prevailing interbank market rate plus a margin of up to 10 percent should be withdrawn.
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Zimdollar Remains Legal Tender Until 30 April - RBZ

The Reserve Bank of Zimbabwe (RBZ) has said the newly-introduced “structured currency” known as Zimbabwe Gold (ZiG), still cannot be used to buy fuel from service stations.
Some notable economic commentators have already predicted that the value of ZiG, which had an initial rate of 13.56 to US$1 when it was launched on Monday, will fall soon.
In a document released on Tuesday addressing some of the questions about ZiG, the RBZ said motorists won’t be immediately able to buy diesel and petrol using the new currency. It said:
<blockquote>
The current pricing mechanism in the fuel sector will remain in place until otherwise reviewed.
As the Reserve Bank and government work towards wider use of ZiG, the fuel sector will be encouraged to accept ZiG for fuel purchases.
</blockquote>
Fuel is imported, and local fuel retailers sell it exclusively in foreign currency. In the past, fuel has run out in the country when dealers were forced to sell it in the local currency.
When the government changed its policy stance by allowing fuel trading in foreign currency, the product became readily available at service stations.
The Central Bank also said ZiG is not yet recognised internationally and cannot be used to make international payments as it has not yet achieved convertibility. It said:
<blockquote>
ZiG is a local currency that has just been launched and has not yet achieved convertibility. The Bank will work to strengthen the currency to attain full convertibility, consistent with the regional agenda for macroeconomic convergence under the SADC Protocol on Finance and Investment.
</blockquote>
ZiG replaced the Real Time Gross Settlement Dollar (RTGS) and subsequently the Zimbabwe dollar, which lost about 80% of its value this year alone and had been trading at 28,720 to US$1 before the change.
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RBZ Cannot Guarantee Fuel Service Stations Will Accept Payment In ZiG

The Zimbabwe Congress of Trade Unions (ZCTU) has requested an urgent meeting with Central Bank Governor John Mushayavanhu to discuss the impact of the Monetary Policy Statement (MPS) on workers.
Mushayavanhu presented the MPS on Friday last week and the introduction of a “structured currency”, known as Zimbabwe Gold (ZiG) was the major highlight of the presentation.
ZiG is backed by a composite basket of foreign currency and precious metals (mainly gold) held by the Reserve Bank of Zimbabwe (RBZ).
According to a letter seen by <a href="https://www.newzimbabwe.com/trade-unions-request-urgent-meeting-with-rbz-governor-over-new-zig-currency-confusion/">NewZimbabwe.com</a> dated April 8, 2024, signed by the ZCTU secretary general, Japhet Moyo and addressed to Mushayavanhu, price hikes have eroded the majority of workers’ earnings who are now failing to make ends meet. Part of the letter reads:
<blockquote>
The working people of Zimbabwe have already suffered immensely as wages have failed to keep pace with price hikes.
The situation has worsened rendering it practically impossible for workers across all sectors to earn the current salaries and sustain their families or be able to go to work.
In this vein, the ZCTU is requesting an urgent audience whose agenda would be to discuss and understand the Monetary Policy and its implications on workers.
</blockquote>
According to the RBZ, on Tuesday, 09 April, the ZiG strengthened by 0.2% to 13.53 per US dollar, up from 13.56 per dollar the previous day.
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