Government hailed on ZiG directive

Economists have praised the Government’s decisive move to instruct all ministries, departments, and agencies (MDAs), as well as the private sector, to acknowledge and embrace the new Zimbabwe Gold (ZiG) currency highlighting the importance of providing a defined time frame for institutions to adapt to the currency reforms.

On Tuesday, Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, said as Government continues to configure the Public Finance Management System (PFMS) to facilitate revenue collection and payment for goods and services in local currency, all MDAs and the private sector must accept and recognise ZiG as the official currency for payment for all goods and services.

The collective effort in embracing ZiG will contribute to the smooth transition towards a more stable economic environment, he said.

Economist Mr George Nhepera said with all Government departments embracing ZiG, it will boost its acceptability.

“We applaud the Government’s decision to promote the local currency by having all department’s accept ZiG. The move will eventually make it possible to dedollarise the economy.

“The current ratio of 80:20 in favour of the US dollar is too high and a lower ratio over time shall be achievable with such a policy as announced by the Government,” said Mr Nhepera.

Economist Dr Prosper Chitambara weighed in saying that the Government’s decision will have a significant impact on the country’s development and the achievement of the Vision 2030.

“There needs to be a clear timeframe for the process of de-dollarisation and for other institutions to adjust to the new currency format. The introduction of ZiG is a bold step aimed at addressing the high inflation and currency volatility that Zimbabwe has experienced in recent years.

“Lowering interest rates and stabilizing asset markets are crucial measures to restore investor confidence and support sustainable economic growth,” Dr Chitambara emphasised.

The newly introduced Zimbabwe Gold (ZiG) currency which started circulating today, is yet to start circulating in the mining town of Kwekwe
ZiG notes

Bulawayo businessman and economic analyst, Mr Morris Mpala, pointed out that if all Government departments were to adopt ZiG, it would signal strength to the market, boosting confidence and trust in the currency.

“It’s an ongoing process for other sectors and Government institutions to fully embrace ZiG. The goal is to facilitate seamless currency transition for market fluidity,” Mr Mpala explained.

Mr Nhepera added that the passport office must fully comply with the new Government policy of accepting payments in any chosen currency, including ZiG.

“This is the current practice for fuel pricing and the passport office is no exception,” Mr Nhepera noted.

President of the Confederation of Zimbabwe Retailers (CZR), Dr Denford Mutashu expressed support for the decision to back ZiG with reserves, a crucial step in building confidence and stability in the currency.

However, to strengthen this position and ensure wider acceptance, the Government must set the example to boost the currency’s credibility.

“This sentiment is further exacerbated by the reluctance of manufacturers and suppliers to accept ZIG at a fair ratio, opting instead for an 80 percent US dollar to 20 percent ZIG payment structure,” said Dr Mutashu.

He emphasised the importance of treating ZiG on par with other currencies in the basket, allowing taxes to be paid in ZiG alongside US dollars at the taxpayer’s discretion.

Added to that he stressed the necessity of enabling all Government fees, including passport fees, Zimborder fees, and number plate fees, to have a ZiG payment option, enabling contractors and the Government to utilize ZiG for local expenses or convert it through RBZ when needed.

Dr Mutashu believes that these measures would initiate the de-dollarisation process, end the era of high inflation, reduce the country’s reliance on foreign currency, and enhance economic independence.

These actions have the potential to attract more foreign investments, as investors will gain trust in the local currency, he added.

Posting on his X account (Formerly Twitter) Mr Busisa Moyo, an industrialist noted that the latest Government move will give the local currency a bigger chance of success.

“Two other supporting measures are allowing price discovery through a confidence building market mechanism through the banks willing buyer willing seller (WBWS) and restrained money supply growth,” said Mr Moyo.chronicle