ZiG hits the streets: Scepticism lingers despite central bank assurances

The new Zimbabwe Gold (ZiG) banknotes and coins started circulating Tuesday with the Central Bank claiming the money has been distributed to banks but some citizens still carry 

doubts that the new currency will help the country’s struggling economy.

Residents pointed out that the parallel market has already been manipulating the ZiG exchange rate, prompting authorities to launch a nationwide blitz targeted at black market foreign currency traders.

So far, dozens of black market foreign currency traders have been arrested while others have gone underground.

ZiG is now trading at a rate of ZiG14 versus US$1, while the parallel market exchange rate has ranged between ZiG18 and ZiG20.

“The cash barons have mutilated the ZIG before arriving on the streets. Its arrival is more like a memorial service for the economy,” said one Bulawayo resident, Emmanuel Sibanda, who added that “it was hard to trust the RBZ.”

These doubts also emanate from the inconsistent claims made by Reserve Bank of Zimbabwe (RBZ) governor, Dr John Mushayavanhu, on who actually came up with the concept of a structured currency in Zimbabwe. 

Meanwhile, the central bank governor implored Zimbabweans to use the currency and ease convenience.

“There is that need for Zimbabweans to use ZiG. I implore the nation to focus on a currency preservation system to facilitate ease and convenience to Zimbabwe. It is all about confidence and as the central bank, we are guaranteeing confidence in the economy,” said Mushayavanhu.

Mushayavanhu, himself is facing scrutiny for making conflicting statements regarding the origin of the structured currency.

A week ago, the Governor admitted that the RBZ did not know much about a structured currency and the idea to launch one came from the World Bank.

Read: https://cite.org.zw/rbz-governor-confirms-world-bank-influence-on-currency-policy/

On Monday, the governor made a u-turn and said the structured currency did not come from the World Bank.

Dr Mushayavnhu said: “I heard yesterday that people were now saying the structured currency that we introduced was given to us by the World Bank. That is not true. We got a consultant to work with us by the World Bank who assisted us in getting further information on the structured currency and that enabled us to refine our thoughts on that currency. We then proceeded to put together the monetary policy statement that we presented on the 5th of April.”

An analyst, Bernad Magugu said these statements demonstrate that the governor too has no confidence in the ZiG because he is forced to say one thing then another in one week.

“This is a terrible start to bringing in new banknotes of a currency that people already are cautious about,” Magugu said.

He added that at this juncture, the governor should be assuring consumers about the value of the currency but his statements are doing the opposite.

“They are undermining the little trust that people already have in RBZ and ZiG. This is a time to boost confidence in the ZiG, currency reforms, and the economy as a whole,” Magugu remarked.

Instead of flip-flopping, Magugu said Mushayavanhu had to accept full responsibility for his initial miscalculation and release a public statement explaining what ZiG is and what it aims to do.

A former MP, Fadzayi Mahere, questioned whether Zimbabweans can trust anything that the central bank said if its top boss could shift goalposts in a week.

“Well, if his facts can change so acutely in the space of just a week, can we have confidence in anything else that he says? Quite frankly, it’s giving chaos,” she said.

 “Why does he not find a communications director to assist him with talking points so that his facts don’t change? Confusion and sloppy about turns do not bode well for confidence.”

Meanwhile, former cabinet minister, Professor Jonathan Moyo rallied people to support the ZiG currency.

 “The ZiG currency is truly the one big thing that must be fully and wholeheartedly supported by all well-meaning Zimbabwean individuals and entities – with no political axe to grind – who genuinely want to see the country turn a progressive page for the better in the national interest to sustain lives, improve livelihoods for everyone and develop the country!” he said.