Loss of trust already on new Zimbabwe currency

from MARCUS MUSHONGA in Harare, Zimbabwe
Zimbabwe Bureau
HARARE, (CAJ News) – DAYS after introducing a new currency, Zimbabwe’s central bank is charging the United States dollar for its services.

This is already eroding trust in the new local currency among members of the public.

At its Monetary Policy Statement Breakfast Review Meeting, scheduled for Tuesday in the capital Harare, the Reserve Bank of Zimbabwe (RBZ) requires participants to pay US$100 in order to attend the keynote address by its governor, John Mushayavanhu.

Last week, he announced the introduction of the ZiG (Zimbabwe Gold) currency.

Zimbabweans have already questioned the move arguing this will encourage companies, government entities, municipalities, small and midsize enterprises (SMEs), non-governmental organizations (NGOs), diplomatic missions and citizens to demand payment in US dollars.

“An event to talk about the new currency the ZiG is being charged in a different currency in the same country,” mocked outspoken critic, Hopewell Chin’ono, who has previously been arrested for his criticism.

“This is where the financial troubles start. This is the root cause of our currency quickly losing value,” said Tsakisi Shivambu, an entrepreneur from Chiredzi.

“Our own government, led by the central bank, must build enough confidence in the ZiG currency rather than showing complicit in demanding and accepting the US dollar for services rendered at the expense of our currency.”

Nyararai Ngwerume, who runs a fast food outlet in Harare, echoed the sentiments.

“Already the Reserve Bank of Zimbabwe is showing its distrust of the new ZiG currency by demanding the US dollar,” she said.

“How would you then instill confidence in your currency yet the owners do not trust their money? This is double standards to want to force citizens to use the ZiG yet all government entities charge services in forex,” Ngwerume argued.

Zimbabwe, whose dollar’s demise was in 2009 after years of hyperinflation, has for years battled a so-called black market for currency.

The ZiG is the latest in a series of moves to introduce a domestic currency.

Until the announcement, foreign currencies have been in circulation, initially alongside the so-called bond notes and most recently the ZWL, as the local dollar has been known.

Anesu Makavanye said, “To cultivate trust in the new ZiG, we would like to see the passport office charge applicants in ZiG. We would like to see tollgates demand ZiG.”

Rutendo Matinyarare, chairman of Zimbabwe Anti-Sanctions Movement (ZASM), accused a majority of Zimbabweans of having an appetite for the US dollar, arguing such actions collapse the local currency.

“Consequently, no Zimbabwean wants to hold Zimbabwe dollars, whether backed by gold or not, because businesses, investors, and even the common man desire only foreign currency, which causes the local currency to lose value and making it less attractive as a store of value,” Matinyarare said.

He pointed out the government and municipalities demanded US dollars for the provision of public services while civil servants demanded to be paid in that foreign currency.

“It’s because Zimbabweans love foreign currency and foreign goods, as a result most of the foreign currency generated from exports does not come back to our taxman, the Reserve Bank, our commercial banks as savings or reinvestment in the economy, to facilitate a seamless foreign exchange system,” Matinyarare said.

ZiG will begin circulation later this month, pegged at a rate of US$1: ZiG13,56.

The government of President Emmerson Mnangagwa faces an arduous task reviving an economy that was at independence in 1980 the pride of the continent had a currency stronger than the US dollar.

– CAJ News