Business Correspondent
The Zimbabwe Gold (ZiG) currency, introduced just six months ago, is already facing significant challenges, including a two-tier pricing system, black market exchange rates, and a lack of confidence among consumers and businesses.
Despite efforts by authorities to stabilize the currency, the ZiG is struggling to gain traction, with many shops and traders preferring to use the US dollar.
Analysts point to a mismatch in supply and demand for foreign currency, as well as a lack of strong economic fundamentals, as key factors contributing to the ZiG’s instability. The currency’s scarcity has led to depressed consumer spending, with disposable incomes remaining low.
Civil servants, who receive parts of their salaries in local currency, are also feeling the pinch, with prices for basic commodities increasing nearly every month. The unstable exchange rates are eroding the value of their income, making it difficult for them to make ends meet.
The unavailability of hard cash in larger denominations has further exacerbated the situation, leading to higher demand for US dollars compared to the ZiG.
Zim GBC News was in Lobengula Street Flea market in Bulawayo and spoke to vendors and Rank Marshalls.
“Sizobhadalisa kanjani ngaleloZiG ifuel ithelwa nge US dollar?” Asked a Rank Marshall at 3rd Avenue Bus rank.
how can we charge our fares in ZiG when we buy fuel in US dollars
Another who refused a direct interview called from the sidelines,
“Ngikhombisa one shop ethengisa amaspares nveZiG.”
Show me any one shop that sells vehicles spares in ZiG
A flea market vendor who refused with her name supported the rank marshalls stating that most of their wares be it local or imports are purchased in the US dollar or SA Rand.
“Si order nge US kumbe ama Rands. So manje ngizothengisa njani nge ZiG, ngizoyithatha ngaphi imali yoku order.”
we make our orders for resell in the US dollar or SA Rand, if I sell in ZiG how am I going to reorder?
As a result, illegal forex dealers are returning to the streets, and the black market exchange rate is almost double the official bank rate.
Experts warn that if confidence in the ZiG continues to decline, its value could plummet by the end of the year, leaving the country vulnerable to economic instability. The government must practice strong monetary discipline to address these challenges and restore confidence in the currency.
Zim GBC News©2024