Demystifying the ZiG currency
For a country to have their currency it's not negotiable but the currency should meet its fundamentals
By Desire Tshuma
Zimbabwe Council of Churches in partnership with ZIMCODD on Friday held a breakfast meeting with the Public School of Economics in reviewing the new Zimbabwe currency ZiG.
Several high ranking delegates from different departments were invited to the new currency review dialogue. Among them were representatives from the Reserve Bank of Zimbabwe, Director for economic research Dr Nebson Mupunga Civil Society, Janet Zhou ZIMCODD Director, Academia Consumer Council of Zimbabwe ZCC General Secretary, researchers and other independent economists.
” For a country to have their currency it’s not negotiable but the currency should meet its fundamentals, we had some bearer cheques , bond notes and RTGS but where are they now , they failed and people now have no confidence with local currency ” said Reverend Sikhalo Cele , ZCC chairperson for economic justice commission.
During the dialogue , most speakers representing their organizations expressed concerns over the shortage of ZiG in circulation. ” We really need to have our own currency as a country but it fails us and people always get into problems with our currency as what happened in 2008 during the hyperinflation. Us here seated in this high table don’t even have any ZiG right now but the RBZ claims that banks have enough ZiG , how true is this ” asked Rev Cele.
In his response Dr Nebson Mupunga said, banks have enough ZiG , maybe people don’t have ZiG bank accounts to withdraw ZiG from banks.
Consumer Council of Zimbabwe expressed disappointment with ZiG.” Our economy is informal so do you think an informal employed person can have confidence with local currency given that it has failed several times, the unavailability on circulation of ZiG has forced consumers not to embrace ZiG ” said CCZ representative.
Zimbabwe launched a new currency termed Zimbabwe Gold (ZiG) on 5 April 2024 , and to date Reserve Bank of Zimbabwe (RBZ) has injected coins, ZiG 1, ZiG 2 ,ZiG 5 and small denomination of bank notes ZiG 10 and ZiG 20 into circulation.
After gaining independence in 1980 , Zimbabwe transitioned from the then Rhodesian pound to the first Zimbabwean dollar (ZWD) at par with the US dollar ( USD) . The independence series comprised $2, $5,$10 and $20 notes followed by $50 and $100 in 1994 .
A detailed analysis of time series data reveals that the ZWD started to follow a downward path in the early 1990s due to a multitude of reasons , including the impact of the International Monetary Fund (IMF) sponsored economic structural adjustment program ( ESAP) which fueled deregulation, deindustrialisation , poverty and unemployment. These , combined with impromptu payments of lucrative gratuities to thousands of war veterans, led to insignificant currency crash f
famously known as as Black Friday on the 14 of November 1997.
