Minister of Finance Economic Development and Investment Promotion Professor Mthuli Ncube has announced the transition from the Zimbabwean Dollar (ZWL) to the new currency, the Zimbabwe Gold (ZIG), legalising the move through a Statutory Instrument (SI) 60 of 2024.
SI 60 of 2024 legalises and operationalises the new ZiG currency and the finance ministry has urged the government departments and banks to immediately start transitioning to these new currency arrangements.
In a press statement detailing the transition from ZWL to ZiG and measures to promote market adoption, the finance minister said the new current was part of government efforts to stabilise the economy, restore confidence in the financial system and provide a conducive business environment.
“The Ministry of Finance, Economic Development and Investment Promotion is pleased to announce the transition from the ZWL to the new currency, the ZIG, following the recent announcement of the 2024 Monetary Policy Statement by the Governor of the Reserve Bank of Zimbabwe (RBZ) on 5 April, 2024,” Prof Ncube said.
“Statutory Instrument 60 of 2024, Presidential Powers (Temporary Measures) legalised and operationalised the new currency, thus Government and banks immediately started transitioning to these new currency arrangements.”
Prof Ncube said as the government continues to configure its Public Finance Management System (PFMS) to facilitate revenue collection and payment for goods and services in local currency, the ZiG is now the official currency for all financial transactions.
“All Ministries, Departments, and Agencies, including the private sector alike, are hereby advised to accept and recognise the ZiG as the official currency for all financial transactions, and payment for all goods and services, effective immediately,” the finance minister said.
“The ZiG is a gold backed currency that has been introduced as part of Government efforts to stabilise the economy, restore confidence in the financial system and provide a conducive business environment.”
The finance minister said in order to stabilise the value of the ZIG, the government has introduced a liberalised foreign exchange market where the exchange rate is freely determined by the banking system based on demand and supply.
“This is supported by a pool of gold and foreign exchange reserves at the RBZ which is more than adequate to back the local currency money supply in circulation. The availability of such reserves will make sure that all bonafide and legitimate requests for foreign exchange made through the banking system will be fully satisfied,” Prof Ncube said.
He added that since the exchange rate is market determined, “there is no basis for private and public organisations and economic agencies to use any other exchange rate in the pricing of their goods and services other than the prevailing average interbank foreign currency selling exchange rate as published by the RBZ.”
Prof Ncube said to make sure there is orderly pricing, the government will soon be introducing the necessary regulations to guarantee that no exchange rate other than the official rate will be used for the pricing of all goods and services.
“In light of this, the Ministry emphasises the urgency and importance of a swift transition and market adoption of the ZIG by all stakeholders. We call upon all Ministries, Departments, and Agencies and the private sector including retailers, and service providers to accept the ZIG in all financial transactions, including payments of salaries as well as for procurement,” urged the finance minister.
He claimed such a collective effort would “contribute to the smooth transition towards a more stable economic environment.”
“Furthermore, unless there is specific legislation allowing charges or fees to be collected in USD only, all collections by Government and the private sector shall be made in ZiG or any of the currencies in the multi-currency basket without insisting on a specific type of currency or indexing invoices to the USD,” said Prof Ncube.
The finance minister also urged the media sector to support the government by “widely publicising the new currency in order to promote acceptance and adoption by the market.”
Last month, Vice-President Constantino Chiwenga claimed at the International Business Conference at the 64th edition of the Zimbabwe International Trade Fair (ZITF) in Bulawayo that the ZiG currency is Zimbabwe’s first post-independence currency since the former ZWL was inherited from the colonial government.
Chiwenga’s sentiments come after Zimbabwe’s currency has had a turbulent history since independence in 1980, including many revisions and re-denominations, and the ZiG is the country’s sixth attempt to relaunch its local currency.
Read: https://cite.org.zw/chiwenga-says-zig-first-post-independence-currency/
