Mnangagwa says government will ban US dollar for a ZiG monocurrecy

MUTARE- President Emmerson Mnangagwa has suggested that Zimbabwe’s new bullion-backed currency, the ZiG (Zimbabwe Gold), will become the sole legal tender before the 2030 deadline, ending the current multicurrency system.

This transition would eliminate the use of US dollars, which currently account for over 80% of transactions in the country. Last October, Mnangagwa extended the use of the US dollar by five years until 2030 to alleviate concerns about impending currency policy changes.

Speaking at an event in the border city of Mutare, where he officiated the commissioning of a fruit juice and water processing plant, Mnangagwa emphasized the importance of the ZiG replacing US dollars. “In two years’ time — in fact, two years is too far — we will get to the point where when I see that the ZiG is available in every part of the country,” Mnangagwa said. “We are getting there. When you go to the shops carrying US dollars, they will refuse to accept them.”

The ZiG, launched in early April, is Zimbabwe’s sixth attempt in 15 years to establish a functioning local currency. It is backed by 2.5 tons of gold and $100 million in foreign-currency reserves held by the central bank.

The collapse of the previous Zimbabwe dollar led to a surge in demand for US dollars as citizens sought refuge from exchange-rate volatility. The country uses US dollars for everyday transactions, including purchasing food, medicines, and fuel.

In June 2019, Zimbabwe discontinued the use of the US dollar in favor of reintroducing the Zimbabwe dollar after a decade. However, the ban on US dollars was lifted at the onset of the COVID-19 pandemic in March 2020 to address a severe shortage of foreign exchange.

As Zimbabwe approaches this significant currency transition, the government aims to ensure the widespread availability and acceptance of the ZiG across the nation

-zimbabwemail