Zimbabwe Threatens Shop Closures Over New ZiG Currency Issues

VP Chiwenga Warns Retailers Against Undermining ZiG Currency

by Adenike Adeodun

Vice-President Constantino Chiwenga delivered a powerful message at the Zimbabwe International Trade Fair (ZITF) in Bulawayo regarding the stability and permanence of Zimbabwe’s new currency, the Zimbabwe Gold (ZiG). During his speech at the international business conference, Chiwenga confirmed the government’s commitment to the newly introduced ZiG and issued stern warnings to currency speculators and elements within the retail sector who are perceived to be undermining the national economic agenda.

ZiG was introduced earlier this month as a solution to the prolonged currency instability that has plagued Zimbabwe. It aims to replace the previously reintroduced local currency, which had suffered dramatic devaluation and hyperinflation. Since 2019, President Emmerson Mnangagwa’s leadership has been steering a de-dollarisation campaign. ZiG is pegged against a basket of foreign currencies and backed by Zimbabwe’s gold reserves, among other precious minerals. This purportedly insulates it from the speculative and exchange rate volatility that has historically beleaguered the nation’s economy.

During his address, Chiwenga emphasized the severe consequences for anyone attempting to manipulate the new economic order. He made it clear that the Zimbabwean dollar, known as ZiG, is here to stay and that the government will take robust measures against any entities trying to destabilize the currency. This includes the possible closure of supermarkets or other retail operations suspected of sabotaging the ZiG through illicit financial practices. The message is clear: everyone must adhere to the new economic order.

At the same time, Chiwenga emphasized the broader implications of gold smuggling. He stated that no gold would leave the country without proper accounting, as gold plays a critical role in backing the ZiG currency. This statement comes amid long-standing concerns about gold smuggling in the country, including high-profile cases involving politically-connected individuals. The government’s stance is clear: it aims to stop the illicit flow of gold, which is essential for maintaining the integrity and confidence in the newly introduced currency.

The introduction of ZiG has been met with a mixture of skepticism and cautious optimism. On the parallel market, ZiG is trading at about 17 units to the US dollar, while the official rate stands at 13. These discrepancies highlight the challenges facing the currency’s stabilization. Chiwenga’s speech at the ZITF sought to reassure both domestic and international stakeholders of the government’s commitment to creating a stable macroeconomic environment. He emphasized the comprehensive measures that would be employed to secure the currency’s value, including stringent regulation of the gold sector and close monitoring of the economic landscape to prevent manipulation and speculation.

The vice president also articulated the government’s vision for ZiG as a catalyst for economic revitalization. By fostering a stable economic environment, the government aims to encourage long-term business planning, boost investor confidence, and promote savings and investments within the domestic economy. These steps are seen as essential for restoring faith in Zimbabwe’s currency and, by extension, its overall economic prospects.

Moreover, the structured approach to the new currency is expected to enhance economic activities, leading to increased production and exports. As the domestic currency stabilizes and gains traction, the government anticipates a resurgence in domestic demand, which could spur further economic growth and stability.

However, the success of ZiG and the broader economic reform agenda hinges on the government’s ability to enforce fiscal discipline, maintain monetary prudence, and effectively manage the nation’s precious resources. The ongoing challenge will be to balance these rigorous controls with the need to foster an open and competitive economic environment that can attract foreign investment and stimulate internal economic activity.

Vice-President Chiwenga’s speech at ZITF marks a significant step taken by the Zimbabwean government in securing its economic foundations through the introduction of the ZiG currency. The government’s objective is not only to safeguard the currency’s implementation from any potential threats, both internal and external, but also to ensure that the new monetary system achieves its intended goals of economic stability and growth. The government’s firm stance on issues such as currency speculation and gold smuggling highlights its commitment to achieving economic stability through this new initiative. As Zimbabwe moves forward with these ambitious initiatives, the international community and domestic stakeholders will be closely monitoring to see if the ZiG can indeed fulfill its promise as a stabilizing force in the nation’s economy.


Source: Newsday

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