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Africa Moyo-Deputy News Editor
All ministries, departments, agencies and the private sector, have been directed to start accepting and recognising the Zimbabwe Gold (ZiG) as the official currency for all financial transactions and payment for all goods and services with immediate effect, Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube has said.
In a statement titled ‘Transition from ZWL to the new currency Zimbabwe Gold (ZiG): Measures to promote market adoption and acceptance’ released yesterday, Prof Ncube said Statutory Instrument 60 of 2024, Presidential Powers (Temporary Measures) legalised and operationalised the new currency, and Government and banks immediately started transitioning to these new currency arrangements.
The ZiG came into being following the April 5 Monetary Policy Statement announced by Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mushayavanhu.
Yesterday, Prof Ncube said Government continues to configure its Public Finance Management System (PFMS) to facilitate revenue collection and payment for goods and services in local currency.
But directed all its arms and the private sector to start accepting and recognising the ZiG as the official currency for all financial transactions.
“The ZiG is a gold backed currency that has been introduced as part of Government efforts to stabilise the economy, restore confidence in the financial system and provide a conducive business environment,” said Prof Ncube.
“In order to stabilise the value of the ZiG, Government has introduced a liberalised foreign exchange market where the exchange rate is freely determined by the banking system based on demand and supply.
“This is supported by a pool of gold and foreign exchange reserves at the RBZ which is more than adequate to back the local currency money supply in circulation.”
Zimbabwe has 2,5 tonnes of gold and US$300 million in cash reserves to back the new currency.
Of the gold reserves, 1,5 tonnes are held at the RBZ vaults and one tonne is held offshore.
Prof Ncube said the availability of such reserves will ensure that all genuine and legitimate requests for foreign exchange made through the banking system would be fully satisfied.
“It should be noted that since the exchange rate is market-determined, there is no basis for private and public organisations and economic agencies to use any other exchange rate in the pricing of their goods and services other than the prevailing average interbank foreign currency selling exchange rate as published by the Reserve Bank of Zimbabwe.
“To ensure orderly pricing, Government will soon be introducing the necessary regulations to ensure that no exchange rate other than the official rate will be used for the pricing of all goods and services.
“In light of this, the Ministry emphasises the urgency and importance of a swift transition and market adoption of the ZiG by all stakeholders. We call upon all MDAs (ministries, departments, agencies) and the private sector including retailers, and service providers to accept the ZIG in all financial transactions, including payments of salaries as well as for procurement,” he said.
Such collective effort, said Prof Ncube, would contribute to the smooth transition towards a more stable economic environment.
Furthermore, Prof Ncube said unless there is specific legislation allowing charges or fees to be collected in USD only, all collections by Government and the private sector shall be made in ZIG or any of the currencies in the multi-currency basket without insisting on a specific type of currency or indexing invoices to the USD.
He encouraged the media fraternity to support the Government by widely publicising the new currency in order to promote acceptance and adoption by the market.
Online Reporter