Call on all sectors to build confidence in ZiG

PLAYERS in the tourism sector have embraced the new Zimbabwe Gold (ZiG) currency and urged all sectors including Government departments to build confidence in the local unit as a medium of exchange for services ahead of the United States Dollar.

The new currency, backed by a combination of gold, precious minerals and foreign currency reserves was introduced a month ago to replace the Zimbabwe dollar, whose value was eroding rapidly over the last few months.

The ZiG started circulating in the market last week with the successful rollout of lower denomination notes and coins ranging from ZiG1 to ZiG10.

Reserve Bank of Zimbabwe (RBZ) Governor, Dr John Mushayavanhu, has said the release of higher denomination notes was set to follow soon.

As the apex bank is undertaking an extensive countrywide public education awareness campaign, in partnership with the Ministry of Information, Publicity and Broadcasting Services to ensure stakeholders understand and embrace the new currency, tourism players have warned against selective acceptance of the currency.

In an interview, Tourism Business Council of Zimbabwe national president Mr Wengayi Nhau said the success of the currency requires collective confidence, which then leads to stabilisation.

“Confidence in the currency is earned based on how we perceive it. Government is the biggest stakeholder and consumer of confidence but they are not accepting the currency in some services as there is selective acceptance of the currency in the energy sector and some services that cannot be paid in ZiG.

“If the major consumer doesn’t accept its currency fully, the rest of the citizens will follow and by not accepting it fully we are making the United States Dollar a commodity and store of value. This only means that people will get ZiG to chase after the USD,” said Mr Nhau.

Tourism is one of the major foreign currency earners and contributors to Gross Domestic Tourism together with agriculture, mining and manufacturing.

Mr Nhau said following the introduction of ZiG, the country has an opportunity to benchmark the region where neighbours Botswana, Namibia, South Africa and Zambia strictly transact in their local currencies despite the presence of other foreign currencies.

While foreigners are allowed to pay in foreign currency in the tourism sector in the neighbouring countries, local transactions are made in local currency.

Those in need of foreign currency will buy it from banks and registered Bureau de Change institutions thereby ensuring money circulates in the formal economy.

“As tourism and business, we can’t say we want or don’t want the new currency but Government has the responsibility to fully accept the new currency unconditionally and make it the base payment for all transactions and by doing so, there won’t be need to unleash police to remove illegal money changers as market forces will render them jobless naturally through the monetary policy,” said Mr Nhau.

“Let’s deal with fundamentals. If Government builds confidence, people will dump the United States dollar and chase after ZiG. There should be confidence where the country should view its currency as supreme and let the law of demand and supply rule.

“The Government should lead in the acceptance of ZiG because if you check in the whole region, no one pays parking fees in foreign currency, its only us while other countries take their currency as a default currency.”

He said the ZiG should be allowed to flow in the market without interruption so that it naturally falls into place.

Mr Nhau also said Zimbabwe has enough exports to sustain the local currency while hard currency should be in the banking sector and not parallel market.

As of April 5, the RBZ had in its reserves US$100 million in foreign currency and 2,5 tonnes of gold valued at US$185 million to back the new currency.

The central bank has set weekly cash withdrawal limits at ZiG3 000 for individuals and ZiG30 000 for corporates to manage the initial rollout.

Employers Association for the Tourism and Safari Operators incoming president, Mr Ephias Mambume said the industry remains optimistic that the newly introduced currency will be able to meet its requirements in terms of procuring goods and services within the country and outside the country.