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Zapu slams Zimbabwe's new currency ZiG

by Staff reporter
07 Apr 2024 at 21:08hrs | Views
The 'mother' party ZAPU says as long as the country lacks legitimacy derived from free and fair elections, people will have no faith in a currency produced in Zimbabwe.

On April 5, 2024, the new Reserve Bank of Zimbabwe (RBZ) governor, Dr John Mushayavanhu introduced a new "structured currency" called ZiG ( Zimbabwe Gold) in his much anticipated Monetary Policy Statement for the year.

ZiG banknotes will be issued in denominations of 1ZiG, 2ZiG, 5ZiG, 10ZiG, 20ZiG, 100ZiG and 200ZiG, with the RBZ saying it will be backed by a composite basket of foreign currency and precious metal, mainly gold reserves.

ZiG now forms part of the multi currency basket while all ZWL banknotes, ZWL bank balances, ZWL mobile money accounts and ZWL prices will be converted into ZiG using an exchange rate determined by the gold's global price as of April 4, 2024 and the ZWL interbank rate as of April 5 2024.

However, ZAPU said it is appalled by the Monetary Policy Statement announced by the RBZ Governor, saying for such a long wait it turned out to be a mockery.

"For a monetary roadmap the nation and the world were forced to await with bated breath, for a whole quarter, the meandering rigmarole produced by the new Reserve Bank Governor is a mockery of his esteemed office," ZAPU National Spokesperson, Richard Gandari.

Gandari said the world over, any currency is as good as the people's faith in it.

"Zimbabwe's currency challenges emanate from stolen elections, not necessarily treasury's quasi-fiscal activities as intimated by the hamstrung new governor. Without the legitimacy derived from free and fair elections, no RBZ governor, blunt or sharp, can establish people's faith in Zimbabwe's local currency," he said, emphasising that commanding an economy was not running it.

"The RBZ can never establish a command currency. The RBZ Governor's bravado in claiming that he will enforce stricter regulations to curtail treasury's quasi-fiscal activities is just empty rhetoric."

Gandari claimed the tragedy with Zimbabwe's central bank is every new governor is "determined to see his signature on banknotes to feel relevant enough to be inducted into the same hall of fame with the likes of Desmond Krogh, Kombo James Moyana and Leonard Tsumba."

He stated that since 2003, it has become "the norm" where every new governor at the RBZ comes with a new currency.

"All colours, shapes and designs have been tried, in the vain attempt to foist a lasting currency, upon a populace that has long lost faith in the state-captured RBZ," Gandari said, stating that the newly minted ZiG currency, unveiled by Dr Mushayavanhu, "is a new low even by the bastardised standards of the RBZ."

The ZAPU national spokesperson claimed the RBZ governor was clueless on how to bring practical solutions to Zimbabwe's economy.

"The level of cluelessness behind his stillborn, structured currency is astounding. How his ZiG will promote bank use where bond notes failed is only known by the new face of government failure to at least salvage Zimbabwe's economy from further decline," he said.

"The emptiness of his rhetoric can only be rivalled by the empty vault in which President Mnangagwa was shown Zimbabwe's paltry, national gold reserves."

Gandari said in hindsight, the President's tour of the RBZ financial "mausoleum" served "as a harbinger of Dr Mushayavanhu's moribund policy statement."

"There was no need for anybody to wait for his bag of hot air," he said, claiming the ZiG currency will be a monumental failure that will only serve to popularise Dr Mushayavanhu's signature."

The ZAPU national spokesperson described ZiG as an attempt to aid the State run "a pyramid scheme of grand proportions."

"It takes no oracle to see how the new governor's tenure is going to produce the same if not worse results than his predecessor and namesake," he said.

"Money circulation is not going to improve and shadowy kingpins in the black market will continue to call the shots."

Contrary to the RBZ's sentiments that the central bank will determine the value of ZiG, Gandari said market forces would do that.

"The true value of ZiG will soon be determined by market forces and not the RBZ. Small denominations will hardly change hands before informal traders reject them. Furthermore, Zimbabwe's balance of trade will remain terrible to put it mildly," he said.

"A valueless local currency serves no purpose other than the profitable arbitrage created by exchange rate manipulation and rampant corruption."

The opposition politician claimed the RBZ has "effectively become the biggest enabler in the establishment of Zimbabwe as a spoils-centered and patrimonial society."

"For ordinary Zimbabweans, ZiG will simply be another colourful slap in the face. The only takeaway from Dr Mushayavanhu's policy announcement is how the RBZ, on his watch, has unlocked new levels below rock bottom," Gandari summed.

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