peter
Nqobile Bhebhe, [email protected]
GOVERNMENT has mandated that all ministries, departments and agencies (MDAs), including the private sector, accept and recognise the new Zimbabwe Gold (ZiG) currency as the official medium of exchange for financial transactions, goods and services payment.
The move comes as ZiG grows in popularity, with sustained stability predicted to facilitate the smooth and ultimate de-dollarisation of the economy.
The Reserve Bank of Zimbabwe (RBZ) launched ZiG alongside other currencies last month, as part of comprehensive monetary policy measures to address exchange rate volatility, curtail inflation and restore macro-economic stability in the country. Its value is backed by gold and other precious metals as well as foreign currency reserves.
So far, ZiG has remained stable at 13.5 to the US dollar, ensuring that prices of basic commodities remain stable. ZiG banknotes and coins started circulating in the market last week, with the successful rollout of lower denomination notes and coins ranging from ZiG1 to ZiG10.
The Central Bank has set weekly cash withdrawal limits at ZiG3 000 for individuals and ZiG30 000 for corporates to manage the initial roll out.
Government, through Statutory Instrument 60 of 2024, Presidential Powers (Temporary Measures) legalised and operationalised the new currency and banks immediately embraced the transition, fostering smooth migration to the new structured currency.
There has, however, been some pockets of resistance in accepting ZiG in some sectors of the economy, which Government is determined to address.
In a statement yesterday, Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, said as Government continues to configure the Public Finance Management System (PFMS) to facilitate revenue collection and payment for goods and services in local currency, all MDAs and the private sector must accept and recognise ZiG as the official currency for all financial transactions and payment for all goods and services.
Collective effort in embracing ZiG will contribute to the smooth transition towards a more stable economic environment, he said.
“We call upon all MDAs 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,” said Prof Ncube.
“This collective effort will contribute to the smooth transition towards a more stable economic environment.
“Furthermore, 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 said.
In order to stabilise the value of ZiG, the Government has already introduced a liberalised foreign exchange market where the exchange rate is freely determined by the banking system based on demand and supply.
Prof Ncube reiterated that the new structured currency was supported by a pool of gold and foreign exchange reserves at the RBZ, which is more than adequate to back the local currency’s supply and circulation.
He also stressed that the prevailing exchange rate was market determined, hence 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
“The availability of such reserves will ensure that all bona fide and legitimate requests for foreign exchange made through the banking system will 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,” said Prof Ncube.
Treasury’s interventions come at a time some service providers, working in cahoots with speculative illegal money traders, are pegging the ZiG to as high as 1:20 against the US dollar.
Prof Ncube said in order to ensure orderly pricing, the 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.
The Central 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.
Government agencies such as the Zimbabwe Energy Regulatory Authority (Zera) and Zimbabwe National Road Administration (Zinara) have already added ZiG as a payment option.
Online Reporter