Brunette Tshuma
ZANU PF member Jabulani Sibanda recently praised the introduction of the Zimbabwean currency, ZiG, as one of the country’s greatest achievements.
Speaking at a joint Provincial Development Committee and Provincial Co-ordinating committee meeting, Sibanda stated,
“The best thing we have achieved as a country is the introduction of ZiG, our own currency. ZiG must be supported.”
However, since its introduction in May amid pomp and funfare, the ZiG has struggled on the parallel market, losing significant value, despite claims that it is a structured currency backed by Gold and other minerals and cash reserves.
Initially exchanging at USD$ 1:14 ZIG, the ZiG has faced resistance from the public due to its inability to purchase fuel at the pump or market products from the informal sector.
The informal sector is the one that is dominating trade in Zimbabwe such as Small to Medium scale grocery shops, hardware shops and street vendors.
Even major supermarkets like Choppies and TM at times refuse to accept ZiG, citing network issues when swiping.
Those that accept have a very higher value of the good or service required. An example will be if one had to purchase medication from a pharmacy, in the US$ the price would be $5, then converting to the ZiG, the price will skyrocket about five times.
The new currency’s highest denomination remains 20 ZiG, significantly lower than the USD ($100) and Rand (R100) notes.
The arrest of money changers, accused of undermining ZiG, yielded minimal results, as inflation continued to rise.
The authorities at the Ministry of Finance and the apex bank, the RBZ seem oblivious to the fact that the ZiG’s failure to facilitate fuel purchases at pumps, particularly in Bulawayo where kombi drivers rejected it, has eroded public confidence.
Public transport operators have raised economic sense in stating that, they obtain fuel using the US dollar, they buy motor vehicle spares using the US dollar.
The government is just sinking its head into the sand on this economic fundamental.
Its inability to obtain a passport, a highly valued regional document, further limited its value.
Sibanda attributed ZiG’s strength to Zimbabwe’s minerals, saying,
“Let us revisit the law and be independent not only politically or by vote but must put our minerals as independent as we want them to be.”
Sibanda seemed to be oblivious of the fact that gold prices have been firming around the world in the past weeks, as such the ZiG, if truly backed by gold, should have strengthened in value.
But Alas! As Joseph Kalimbwe from Zambia stated, our ZiG is “backed by Charcoal”.
However, despite escalating global gold prices, ZiG’s value continued to decline. Feeling the pressure, government decided to devalue the ZiG from USD$1:14 to 1:25.
Major supermarkets and other retail stores had threatened to close shop if the control rate continued.
The devaluation has caused significant loses from citizens and to business.
Government had just paid civil servants at the rate of 1:14 and a few days later the ZiG shed 44% of its value.
How is it that Jabulani Sibanda who once held various positions in the Zanu-PF party and government such as,
Provincial Chairman of ZANU-PF in Bulawayo, Member of Parliament, Deputy Minister of Youth Development and Employment, fail to see that the ZiG is going down the drain.
As alludes, maybe he is singing for his supper.
Given these challenges, it’s difficult to consider ZiG’s introduction an achievement. Transactions in ZiG are largely restricted to chain supermarkets, pharmacies and banks, with few physical transactions taking place. The question remains:
What is truly beneficial about ZiG?
Zim GBC News