Zimbabwe Introduces Zimbabwe Gold (ZIG) Currency to Boost Economy

by | May 7, 2024 | Business, Crime & Courts, Local News | 0 comments

Zimbabwe Introduces Zimbabwe Gold (ZIG) Currency to Boost Economy

Nevanji Munyaradzi Chiondegwa

The Ministry of Finance, Economic Development and Investment Promotion has officially announced the transition from the Zimbabwean Dollar (ZWL) to the newly introduced Zimbabwe Gold (ZIG) currency. This move comes in response to the 2024 Monetary Policy Statement released by the Governor of the Reserve Bank of Zimbabwe (RBZ) on April 5, 2024.

The implementation of Statutory Instrument 60 of 2024, known as Presidential Powers (Temporary Measures), has legalized and activated the use of the ZIG currency. As a result, the government and banks have already begun the process of transitioning to the new currency system.

To facilitate smooth transactions and ensure widespread acceptance, all Ministries, Departments, and Agencies (MDAs), as well as the private sector, are being instructed to recognize and adopt the ZIG as the official currency for all financial activities and payments with immediate effect.

ZIG is a gold-backed currency introduced by the government as part of its efforts to stabilize the economy, restore confidence in the financial system, and create a favorable business environment. The value of the ZIG will be supported by a liberalized foreign exchange market where the exchange rate will be determined by the banking system based on supply and demand. The Reserve Bank of Zimbabwe (RBZ) holds a substantial pool of gold and foreign exchange reserves, which will adequately back the ZIG currency in circulation. This reserve availability ensures that all legitimate requests for foreign exchange made through the banking system will be fully accommodated. It is important to note that the exchange rate will be market-driven, and organizations are required to use the prevailing average interbank foreign currency selling exchange rate published by the Reserve Bank of Zimbabwe for the pricing of their goods and services.

In order to promote a smooth transition and encourage market adoption, the ministry emphasizes the need for all stakeholders, including MDAs, private sector entities, retailers, and service providers, to swiftly accept and transact in the ZIG currency. This collective effort will contribute to establishing a more stable economic environment.

Additionally, unless there is specific legislation permitting the collection of charges or fees exclusively in USD, all collections by the government and private sector must be made in ZIG or any other currency from the multi-currency basket, without any preference for a particular type of currency or indexing invoices to the USD.

The ministry also calls upon the media fraternity to support the government by disseminating information about the new currency widely. This publicity campaign aims to encourage acceptance and adoption of the ZIG currency within the market.

With the transition to the Zimbabwe Gold (ZIG) currency underway, the government remains committed to implementing measures that will foster economic stability and enable sustainable growth in Zimbabwe.