By ZimEye/Dr Tapiwa Mashakada- The newly introduced Zimbabwe Gold (ZiG) Structured Currency would very soon collapse just like the Bearer Cheque and the Bond Notes owing to its lack of characteristics of real money, writes economist Dr Tapiwa Mashakada:

Drawing parallels to previous failed attempts such as the Bearer Cheque and the Bond Notes, Dr. Mashakada predicts ZiG’s demise due to its failure to meet the essential characteristics of genuine currency.
Of immediate concern is ZiG’s inability to purchase fuel, rendering it unacceptable as legal tender at petrol stations. Dr. Mashakada emphasizes that any currency lacking the backing and support of monetary authorities cannot fulfill its primary functions as a store of value and medium of exchange.
Reflecting on Zimbabwe’s tumultuous economic history, Dr. Mashakada questions the rationale behind introducing ZiG, especially considering the country’s previous currency debacles. Despite the presence of substantial gold reserves, the authorities have failed to prevent the devaluation of the currency against the USD, a trend likely to persist given the prevalence of dollarization in the economy.
Dr. Mashakada dispels any illusions about ZiG’s acceptance among the populace, asserting that its fate is sealed by its inability to procure fuel, a basic necessity in daily life. He bluntly states that a currency incapable of facilitating such transactions belongs in the dustbin of history.
Moreover, Dr. Mashakada scrutinizes the government’s handling of the situation, questioning why gold reserves weren’t utilized to stabilize the Zim dollar during inflationary periods. The lack of confidence exhibited by both the government and the public in ZiG further undermines its prospects, as evidenced by commuter operators rejecting it in favor of USD payments.
As Dr. Mashakada highlights, the government’s own actions, such as demanding taxes in a mixed currency format, cast doubt on ZiG’s viability. This lack of confidence, coupled with broader economic uncertainties, paints a grim picture for ZiG’s future.
In conclusion, Dr. Mashakada cautions against premature attempts to reintroduce a local currency in an environment still dominated by foreign currencies. Without addressing fundamental economic challenges and restoring public trust, ZiG is destined to meet the same fate as its predecessors. As Zimbabweans yearn for a robust local currency, the road ahead remains fraught with challenges, and only time will tell the fate of ZiG.
Dr. Tapiwa Mashakada serves as the Executive Director of the Maji-Marefu Institute of International Relations and Security Studies, offering valuable insights into Zimbabwe’s economic landscape.