TPF criticises Govt’s decision to devalue ZiG

The Patriotic Front (TPF) has expressed strong disapproval of the Zimbabwean government’s decision to devalue the Zimbabwe Gold (ZiG) currency by 44 percent, stating that this move confirms their long-standing concerns about the stability of the country’s financial system.

Speaking to CITE, TPF Secretary for Information and Publicity Admire Dube said the decision was “not surprising” but rather a confirmation of the government’s continuous failure to stabilise the economy.

“TPF is definitely not surprised with the latest government decision to devalue the ZIG by 44 percent. It actually confirmed our worries that for the umpteenth time, Zimbabwe has ditched its existing currency in favour of a new one,” Dube said.

These remarks come in response to the Reserve Bank of Zimbabwe (RBZ)’s decision to allow the ZiG to fall over 40 percent against the United States dollar on Friday. 

The ZiG, which was introduced in April and pegged to gold bullion, saw its mid-rate drop from 13.9987 to 24.3902 against the dollar, reflecting a 42.6 percent depreciation, according to Reuters.

Dube warned that the devaluation, which effectively slashes the value of savings and salaries by almost 50 percent, demonstrates systemic issues within the country’s economic management.

“TPF has fears that even this new currency, (ZiG), despite being pegged to the international value of gold bullion, may still face devaluation similar to its predecessors due to various systemic issues,” Dube noted.

He pointed to Zimbabwe’s troubled currency history, recalling previous failures such as bearer cheques and the Real-Time Gross Settlement (RTGS) system, both of which experienced rapid depreciation.

“This is testament to what the TPF has always raised – that unless there are major economic and political reforms, any attempt to introduce a new currency is destined for the same fate. From bearer cheques that we saw having a denomination of over a trillion, to RTGS that we saw suffering exponential depreciation, to the current ZIG that we were promised would work magic,” he said.

Dube emphasised that political and economic reforms are crucial to stabilising Zimbabwe’s currency, adding that without them, the country will continue to face dire financial crises.

“Propaganda will never serve as an economic policy. Unless the government wakes up to the reality that the economy cannot be rigged like elections, Zimbabweans must brace themselves for much more catastrophic events in our economy and our infrastructure, which is in a very sad state,” said the party’s spokesperson.

“Someone who had confidence in the ZIG yesterday woke up to the reality that they now hold 44 percent less just overnight.”

Dube outlined TPF’s plan for economic recovery, which includes adopting a multi-currency regime with the South African Rand (ZAR) as a reference, as well as addressing Zimbabwe’s depleted reserves and fostering investor confidence.

“TPF believes that a nation’s currency is the aorta and lubricant that oils the wheels of the economy. It is inherently the source of local and investor confidence and the driver of production and trade. Without a strong currency, there is clearly no incentive to produce. Investors commit their resources because their end goal is the bottom line – monetary returns. This has been the missing element in our struggle,” he stated.

He also advocated for swift government action to eradicate black-market currency trading by licensing foreign currency traders and providing support for regulated microfinance institutions.

Dube stressed the need for a currency backed by Zimbabwe’s mineral wealth, highlighting the importance of building reserves of gold, diamonds, platinum, and other resources to support long-term stability.

“In the first two years of a multi-currency regime, we will rebuild our depleted and squandered reserves. The value of our currency against others will be determined effectively by the amount of our mineral reserves,” Dube explained.

He concluded by calling for unity among all Zimbabweans, regardless of race or political affiliation, to rebuild the country.

“We call upon all Zimbabweans – black, white, Indian, all races independent of their political affiliation -to come together and join hands in building our nation. Against all odds, we can do this,” Dube said.