By Business Reporter- Renowned economist Professor Gift Mugano has joined the ranks of sceptics predicting the impending collapse of the Zimbabwe Gold Currency (ZiG), echoing concerns raised by fellow economist Dr Tapiwa Mashakada.
Professor Mugano’s warning comes amidst growing doubts about ZiG’s viability as a sustainable form of currency.
In a statement posted on his X account, Professor Mugano outlined key factors contributing to ZiG’s potential downfall.
He emphasized the critical need for increased production, bolstered confidence, and the exclusive use of ZiG to generate demand and ensure its survival.
However, he lamented the Government of Zimbabwe’s (GoZ) reluctance to mandate ZiG’s acceptance in crucial sectors such as fuel stations, duties, and passport payments.
Professor Mugano likened this resistance to rejecting medical advice, suggesting that without widespread adoption, ZiG’s demise is inevitable.
Drawing attention to the government’s stance, Professor Mugano urged authorities to reconsider their position and enforce a multi-currency regime to salvage ZiG’s prospects.
He warned that continued resistance to ZiG’s integration into essential transactions could seal its fate.
Dr. Tapiwa Mashakada echoed similar sentiments, drawing parallels to past currency failures like the Bearer Cheque and Bond Notes.
He highlighted ZiG’s inability to purchase fuel, a fundamental requirement for everyday life, as a glaring flaw undermining its legitimacy.
Dr. Mashakada questioned the rationale behind ZiG’s introduction, given Zimbabwe’s history of currency instability and the prevalence of dollarization in the economy.
Furthermore, Dr. Mashakada criticized the government’s failure to utilize gold reserves effectively to stabilize the Zimbabwean dollar during inflationary periods.
He pointed to the lack of confidence exhibited by both the government and the public in ZiG, evident in the reluctance of commuter operators to accept it as payment.
In conclusion, Dr. Mashakada cautioned against premature attempts to reintroduce a local currency without addressing underlying economic challenges and restoring public trust. Without decisive action, ZiG’s fate appears bleak, underscoring the daunting road ahead for Zimbabwe’s quest for a stable and resilient currency.