By A Correspondent| In a major economic development, supermarkets, vendors, commuter omnibus operators, and tuckshops across Zimbabwe have ceased accepting payments in the local ZiG currency.
This move comes after Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu’s sudden 43% devaluation of the currency last week, leaving many Zimbabweans doubtful about its future viability.
With prices now primarily quoted in US dollars, citizens are increasingly worried about potential losses if they continue using the ZiG, which was introduced less than a year ago.
A tuckshop operator in Dzivarasekwa Extension, Harare, shared their concerns, saying, “We don’t know what exchange rate to use anymore. It’s become too risky to accept ZiG because it could lose even more value while we still have it.”
This uncertainty has led to significant changes in pricing, with some routes that previously charged ZiG10 now requiring US$1, as operators avoid being stuck with rapidly depreciating coins introduced in April.
Furthermore, the ZiG has been largely excluded from critical transactions such as fuel purchases, customs duty payments, and rent, all of which remain priced in US dollars.
The ZiG was launched in April, initially valued at US$1: ZWG13, and was presented as a solution to Zimbabwe’s ongoing economic challenges. However, rampant black market activities have led to the currency’s steep decline. While the RBZ listed the official exchange rate at US$1: ZWG14, the black market rate reportedly soared to around ZiG24.
Despite the growing confusion and public frustration over the currency’s devaluation, Mushayavanhu defended his decision, stating that it would ultimately stabilize the economy. In an interview with the state-run newspaper The Sunday Mail, he explained, “The recent resurgence of exchange rate pressures since mid-August required decisive action.” He attributed the August inflation rate of 1.4%—a rise from an average of -0.82% between April and July—to market forces that, according to him, destabilized the economy.
However, critics have been quick to condemn the rapid collapse of the ZiG. Bulawayo Mayor David Coltart raised serious concerns about the claims that the currency was backed by gold. “Has there ever been a more rapid and dramatic collapse of a currency than the ZiG?” Coltart asked. “And has there ever been a more blatant misrepresentation regarding the backing of a currency, claiming it was backed by gold?”
As the country continues to face economic turmoil, the rejection of the ZiG by traders and operators highlights a growing loss of confidence in the local currency and casts doubt on the future direction of Zimbabwe’s monetary policy.