News / National
Zanu-PF panics over ZiG collapse
13 Sep 2024 at 08:12hrs | Views
ZANU-PF spokesperson Christopher Mutsvangwa has expressed alarm over the devaluation of the Zimbabwe Gold currency (ZWG) and is urging President Emmerson Mnangagwa to take decisive action. Mutsvangwa is calling for the issuance of a Statutory Instrument (SI) to designate the ZWG as the sole legal tender in Zimbabwe.
The ZWG was introduced in April to replace the Zimdollar, which had been severely devalued by inflation. However, the new currency has depreciated by approximately 40% since its launch. Initially trading at ZWG13.50 to the US dollar, the ZWG now trades between ZWG25 and ZWG28 on the black market.
This sharp decline has led to higher prices for essential goods and prompted some businesses to charge exclusively in foreign currency to mitigate losses.
At a press conference yesterday, Mutsvangwa criticized the current dual-currency system, suggesting it fuels inflation and economic instability. He argued that by making the ZWG the sole currency, it would help eliminate currency manipulation and stabilize the economy.
"We are facing a situation where the value of the ZWG and the US dollar are diverging," Mutsvangwa said. "This creates inflationary pressures. The US dollars in circulation are not a gift from the American government; there is misuse of the system."
He emphasized that his proposal for the SI is not a ZANU-PF initiative but a broader solution for Zimbabwe. "I believe that making the ZWG the only currency in circulation is the best approach to remove arbitrage opportunities and stabilize the economy."
The ZWG is not the first currency introduced by the government in recent years. In 2009, Zimbabwe abandoned its local currency due to hyperinflation and adopted a multi-currency system dominated by the US dollar.
Additionally, Mutsvangwa defended the President's recent move to license Starlink, stating that it was a blow against corporate greed. He noted that while there was initial resistance, the licensing deal was ultimately in line with Elon Musk's preferences and aimed at reducing corporate monopolies.
Starlink has since announced that it will sell its kits directly to consumers, effectively bypassing Zanu-PF benefactor Wicknell Chivayo and other intermediaries.
The ZWG was introduced in April to replace the Zimdollar, which had been severely devalued by inflation. However, the new currency has depreciated by approximately 40% since its launch. Initially trading at ZWG13.50 to the US dollar, the ZWG now trades between ZWG25 and ZWG28 on the black market.
This sharp decline has led to higher prices for essential goods and prompted some businesses to charge exclusively in foreign currency to mitigate losses.
At a press conference yesterday, Mutsvangwa criticized the current dual-currency system, suggesting it fuels inflation and economic instability. He argued that by making the ZWG the sole currency, it would help eliminate currency manipulation and stabilize the economy.
"We are facing a situation where the value of the ZWG and the US dollar are diverging," Mutsvangwa said. "This creates inflationary pressures. The US dollars in circulation are not a gift from the American government; there is misuse of the system."
He emphasized that his proposal for the SI is not a ZANU-PF initiative but a broader solution for Zimbabwe. "I believe that making the ZWG the only currency in circulation is the best approach to remove arbitrage opportunities and stabilize the economy."
The ZWG is not the first currency introduced by the government in recent years. In 2009, Zimbabwe abandoned its local currency due to hyperinflation and adopted a multi-currency system dominated by the US dollar.
Additionally, Mutsvangwa defended the President's recent move to license Starlink, stating that it was a blow against corporate greed. He noted that while there was initial resistance, the licensing deal was ultimately in line with Elon Musk's preferences and aimed at reducing corporate monopolies.
Starlink has since announced that it will sell its kits directly to consumers, effectively bypassing Zanu-PF benefactor Wicknell Chivayo and other intermediaries.
Source - newsday
