RBZ Governor Starts Believing ZiG Currency He Clearly Said Will Fail
4 May 2024
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Zimbabwe Central Bank Governor Reverses Stance on New Currency, Declares Confidence in ZiG’s Success

By Farai D Hove | In a dramatic shift from his earlier pessimistic view, Dr. John Mushayavanhu, Governor of the Reserve Bank of Zimbabwe (RBZ), has now voiced strong confidence in the success of the newly introduced Zimbabwe Gold (ZiG) currency. Just last month, Dr. Mushayavanhu had warned that the ZiG would likely fail and pointed fingers at external pressures, notably from the World Bank. However, speaking at a business meeting organized by the Zimbabwe National Chamber of Commerce in Masvingo, he passionately defended the homegrown currency.

“The ZiG is a product of Zimbabwean intellect and initiative, conceived by myself with significant local input. It reflects our autonomy in financial matters, distinct from foreign influences,” Dr. Mushayavanhu stated, addressing business leaders and stakeholders. “This currency was not imposed on us; it was carefully considered and is backed by substantial economic reserves, including gold and cash.”

In his previous statements, the governor had been candid about the potential pitfalls facing the ZiG, citing global economic pressures and internal challenges. But his latest comments painted a different picture—one of resilience and national pride. “If at all it fails, which I do not foresee, the responsibility will be ours to bear. But I firmly believe in our collective capacity to make the ZiG a symbol of our economic independence and strength,” he added.

Responding to questions about the currency’s backing, Dr. Mushayavanhu revealed that the ZiG was supported by US$285 million in reserves, including 2.5 tonnes of gold and US$100 million in cash reserves. “These reserves will undergo independent audits annually, ensuring transparency and building public trust,” he assured.

The governor also addressed the circulation dynamics of the ZiG, stating that the country currently has about ZiG 1 billion in circulation, roughly equivalent to US$80 million. This coverage, he noted, provided almost three times the buffer over the existing monetary supply, showcasing a robust foundation for the currency.

Looking forward, Dr. Mushayavanhu outlined several measures aimed at bolstering the ZiG, including the mandatory payment of 50% of taxes in ZiG by June, which he predicted would increase its demand. He also warned against illegal market activities that undermine the currency, such as businesses pegging prices to the US dollar on the black market.

“The onus is on the public to help maintain the integrity of our financial system by reporting such illegal activities,” he emphasized. “Violators will face heavy penalties, making it unsustainable for them to continue these practices.”

Dr. Mushayavanhu concluded his remarks by reiterating his commitment to the ZiG, projecting that by 2028, 80% of transactions within Zimbabwe’s economy would be conducted in ZiG, aligning with the country’s Vision 2030 to fully de-dollarize. The RBZ, he said, will continue its efforts to educate the populace and maintain open lines of communication to foster confidence in the ZiG.