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Zanu-PF pushes for accelerated de-dolarisation
29 Oct 2024 at 13:50hrs | Views
The ruling Zanu-PF party has resolved to accelerate Zimbabwe's de-dollarisation process and strengthen the Zimbabwe Gold Currency (ZiG) as the country's sole legal tender. This decision was among key resolutions made at Zanu-PF's recent annual national people's conference, with a commitment to entrench the use of ZiG and ensure its availability in all denominations to stabilize the economy and reduce dependency on the US dollar.
According to the conference resolutions, Zanu-PF pledged to adopt "robust measures to strengthen the purchasing power of the ZiG" and "promote the wider circulation of the ZiG currency." ZiG, introduced in April 2024 and backed by gold, select minerals, and foreign reserves, was initially valued at around 13.6 ZiG per US dollar. However, after a substantial 43% devaluation in September by the Reserve Bank of Zimbabwe (RBZ), ZiG's official exchange rate dropped to approximately 24.4 ZiG per dollar, later sliding to around 27 ZiG per dollar. The parallel market now reflects a significantly higher rate of between 40 to 45 ZiG per dollar, illustrating challenges in the currency's acceptance and stability.
The conference noted the reluctance of informal businesses to adopt ZiG, with many opting to transact in US dollars instead. To address this, Zanu-PF has called for increased availability and circulation of ZiG across different denominations, aiming to boost its credibility as a reliable store of value and facilitate widespread adoption.
Anti-Market Abuse and Economic Stability Measures
Zanu-PF also resolved to curb money laundering, speculation, and arbitrage, viewing these practices as threats to currency stability and vowing to criminalize economic sabotage. The party has called for harmonized fiscal and monetary policies to enhance economic stability and pledged to reinforce an anti-corruption framework.
Boosting Local Economic Participation and Mining Sector Incentives
The party's conference further resolved to promote local participation in mining and amend Exclusive Prospecting Orders (EPO) regulations. This includes enforcing the “Use it or Lose it" policy to encourage active resource exploitation, revoking idle special mining grants, and incentivising investors to source raw materials domestically. The resolutions also advocate for reviving dormant mines and giving landowners first preference on mining claims, which Zanu-PF sees as a means to increase indigenous economic participation and reduce reliance on foreign-owned operations.
As Zimbabwe's economic challenges continue, Zanu-PF's resolutions reflect a renewed focus on building a self-sustaining economy backed by a stable national currency. However, the path to implementing these reforms remains complex, with the success of the de-dollarisation process likely dependent on effective policy coordination and long-term economic stability efforts.
According to the conference resolutions, Zanu-PF pledged to adopt "robust measures to strengthen the purchasing power of the ZiG" and "promote the wider circulation of the ZiG currency." ZiG, introduced in April 2024 and backed by gold, select minerals, and foreign reserves, was initially valued at around 13.6 ZiG per US dollar. However, after a substantial 43% devaluation in September by the Reserve Bank of Zimbabwe (RBZ), ZiG's official exchange rate dropped to approximately 24.4 ZiG per dollar, later sliding to around 27 ZiG per dollar. The parallel market now reflects a significantly higher rate of between 40 to 45 ZiG per dollar, illustrating challenges in the currency's acceptance and stability.
The conference noted the reluctance of informal businesses to adopt ZiG, with many opting to transact in US dollars instead. To address this, Zanu-PF has called for increased availability and circulation of ZiG across different denominations, aiming to boost its credibility as a reliable store of value and facilitate widespread adoption.
Anti-Market Abuse and Economic Stability Measures
Boosting Local Economic Participation and Mining Sector Incentives
The party's conference further resolved to promote local participation in mining and amend Exclusive Prospecting Orders (EPO) regulations. This includes enforcing the “Use it or Lose it" policy to encourage active resource exploitation, revoking idle special mining grants, and incentivising investors to source raw materials domestically. The resolutions also advocate for reviving dormant mines and giving landowners first preference on mining claims, which Zanu-PF sees as a means to increase indigenous economic participation and reduce reliance on foreign-owned operations.
As Zimbabwe's economic challenges continue, Zanu-PF's resolutions reflect a renewed focus on building a self-sustaining economy backed by a stable national currency. However, the path to implementing these reforms remains complex, with the success of the de-dollarisation process likely dependent on effective policy coordination and long-term economic stability efforts.
Source - businessweekly
