By A Correspondent| Zanu PF legislator for Wedza North, Itai Ndudzo has officially called on Finance Minister Mthuli Ncube to present a ministerial statement addressing the alarming devaluation of Zimbabwe’s gold-backed currency, the Zimbabwe Gold (ZWG).
Speaking during a Parliament session on Tuesday, Ndudzo raised serious concerns about the currency’s significant loss of value, which plummeted by over 40% last week.
The ZWG, introduced in April, has been under pressure from the market, with growing calls for the Reserve Bank of Zimbabwe (RBZ) to adopt a more realistic exchange rate. This devaluation has sparked doubts about the credibility of the currency, which is supposedly backed by gold, especially as global gold prices continue to rise.
Ndudzo questioned the inconsistency between the devaluation and the global gold market.
“It is imperative for the Hon. Minister of Finance to bring a ministerial statement to this House to explain the serious incongruity: how is it that a gold-backed currency devalued by 44%, even though the price of gold per ounce has seen a phenomenal increase in global markets?” He highlighted that the price of gold had risen from US$2,350 per ounce in April to US$2,648 per ounce by September.
He also urged Minister Ncube to outline the steps being taken by both monetary and fiscal authorities to protect vulnerable Zimbabweans, such as pensioners, war veterans, and civil servants, who are particularly affected by the rapid devaluation. These groups, who are largely paid in local currency, have been hardest hit by the economic impact.
Ndudzo further emphasized the need for clarity on measures to create demand for the local currency in domestic transactions and a roadmap towards making it the sole legal tender in Zimbabwe.
When the ZWG was launched, it was pegged at 13.54 ZWG to US$1, with RBZ Governor John Mushayavanhu assuring the public that the currency would be fully backed by reserves, including gold and foreign currency.
Marondera Central MP Caston Matewu echoed Ndudzo’s concerns, stating his intention to press the same issue. He called on Minister Ncube to urgently address Parliament regarding the currency’s sudden collapse, noting that the ZWG’s devaluation has further eroded public confidence in Zimbabwe’s currency system.
In related news, President Emmerson Mnangagwa is set to deliver his State of the Nation Address (SONA) on Wednesday, where the ongoing currency crisis is expected to be a key topic. With Zimbabwe continuing to face economic challenges, the demand for transparency and effective solutions to stabilize the local currency remains urgent.