Gold-Backed Currency: Mnangagwa Defends “Historic” Launch

Zimbabwe launches new gold-backed currency, ZiG, to replace the inflation-ravaged ZW$.

by Victor Adetimilehin

Zimbabwean President Emmerson Mnangagwa has defended the recent launch of the ZiG, the country’s new gold-backed currency. The move comes amidst public skepticism and criticism from some quarters.

Mnangagwa made these remarks while commissioning the Pickstone Peerless Mine Underground Mining Project in Mashonaland West Province. He emphasized the launch as a sign of the government’s commitment to utilizing Zimbabwe’s natural resources for economic development.

“The backing of our currency by our gold and strategic minerals demonstrates the Second Republic’s resolve to leverage our national resources for sustainable economic independence and sovereignty,” Mnangagwa said. “We must be proud of our unique Zimbabwean heritage, including our minerals and our currency, as we build our nation.”

Replacing a Failing Currency

The ZiG replaces the ZW$, whose value plummeted due to hyperinflation. In 2016, US$1 was equivalent to ZW$1. However, by the time the ZW$ was demonetized last week, the exchange rate had ballooned to US$1: ZW$25,000.

Many Zimbabweans are apprehensive about the ZiG, fearing it will follow the same path as previous currencies. Bond notes, a form of quasi-currency introduced in 2016, also failed to curb inflation.

Despite these concerns, Mnangagwa hailed the launch as “historic and unprecedented.” The ZiG notes and coins are expected to begin circulating by April 30th, 2024.

Leveraging Resources for Growth

Mnangagwa emphasized the importance of utilizing Zimbabwe’s mineral wealth to achieve economic independence. The Pickstone Peerless Mine Project exemplifies this goal. The mine received a US$50 million investment for mine expansion and infrastructure development, with projections of increased gold production.

“This project signifies our commitment to developing our domestic resource base,” Mnangagwa said. “Increased gold production will contribute significantly to our economic growth.”

The success of the ZiG remains to be seen. While Mnangagwa expresses confidence, public skepticism lingers. The coming months will reveal whether the gold-backing can restore trust in Zimbabwe’s currency and pave the way for a more stable economy.

Source: New Zimbabwe

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