'Sovereignty ego maintaining Zimbabwe's ailing ZiG'

Zimbabwe is facing a profound economic crisis largely rooted in its insistence on maintaining currency sovereignty, even as the nation clings to a failing local currency, experts warn. Nkanyezi Ndlovu, a development practitioner, economic commentator, and human rights activist, highlighted this pressing issue during a virtual discussion organized by the Bubi Community Parliament on Sunday.

Ndlovu, who recently returned from South Africa after a decade away to engage in development work and human rights advocacy, stated, "As a fanatic of economics, I can safely say our major and worst predicament is currency sovereignty. The reason why we are currently using the Zimbabwe Gold currency while knowing it is failing is simply due to the desire to maintain our sovereignty."

He emphasized that even the Minister of Finance and the Reserve Bank of Zimbabwe acknowledge that independent economists advocate for Zimbabwe to fully adopt the United States dollar or the South African rand to alleviate the country's financial difficulties. "Currency sovereignty is what is keeping us with the ZiG or whatever currency we have. We want to maintain our state sovereignty, regardless of whether it benefits us as a country," Ndlovu remarked.

The Zimbabwe Gold currency (ZiG), which marks the sixth attempt to establish a stable currency in the last 15 years, has been experiencing significant depreciation since its introduction in April, following the demonetization of the Zimdollar earlier this year. Ndlovu argued that budgeting in US dollars is essential, as monitoring the ZiG becomes increasingly challenging due to its volatile value.

Legal expert Thabani Mpofu recently raised concerns about the legal status of the ZiG, suggesting it was established under the Presidential Powers (Temporary Measures) that have since lapsed. However, the government has denied these claims, asserting that the ZiG remains legal tender. The Reserve Bank of Zimbabwe (RBZ) issued a statement clarifying, "The Zimbabwe Gold currency, (ZiG) was established through Presidential Powers (Temporary Measures) proclaimed under SI 60 of 2024, which constitutes a one-time Act of currency reform."

The RBZ further stated that currency reform measures do not lapse simply because the initiating instrument has expired, and any changes to the legal status of the currency would require a new legal instrument.

Despite these assurances, Zimbabweans continue to grapple with the implications of the ZiG's introduction, with President Emmerson Mnangagwa recently signing into law legislation to support its implementation. The Finance Act amended existing legislation to accommodate the ZiG, which is expected to be in high demand as companies seek to pay their quarterly taxes.

As Zimbabwe approaches another chapter in its long history of economic challenges, the call for a reevaluation of its currency strategy and a potential shift towards more stable currencies like the US dollar remains urgent. With the nation's economic stability hanging in the balance, many citizens are left questioning the sustainability of the current approach.