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Zimbabwe may adopt ZiG as sole currency before 2030 – Mnangagwa says

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Bloomberg


Zimbabwean President Emmerson Mnangagwa hinted that the nation’s new bullion-backed currency will be the sole legal tender before a 2030 deadline to end the current multicurrency system.

The change would mean that US dollars, now used in more than 80% of transactions, would no longer be allowed. Last October, Mnangagwa extended dollar use by five years until 2030, in a move meant to allay growing concerns about the looming currency policy changes.

Emmerson Mnangagwa, Zimbabwe’s president.

Speaking at an event on Thursday in the border city of Mutare, where he officiated over the commissioning of a fruit juice and water processing plant, Mnangagwa stressed the importance of the ZiG, short for Zimbabwe Gold, replacing US dollars.

“In two years’ time — in fact, two years is too far — we will get to the point where when I see that the ZiG is available in every part of the country,” Mnangagwa said. “We are getting to there. When you go to the shops carrying US dollars, they will refuse to accept them.”

“When the ZiG is available in every part of the country in all denominations including small coins, then I as President will declare a monocurrency regime, which is the ZIG.”

The ZiG is the nation’s sixth attempt in 15 years to have a functioning local currency. Launched in early April, it’s backed by 2.5 tons of gold and $100 million in foreign-currency reserves held by the central bank.

A collapse of the defunct Zimbabwe dollar helped drive demand for US dollars as citizens fled exchange-rate volatility in favour of hard currency. The southern African nation uses greenbacks to pay for day-to-day transactions including food, medicines and fuel.

In June 2019, Zimbabwe scrapped use of the greenback in favour of the Zimbabwe dollar, which it had just brought back into circulation after 10 years. The ban on US dollars was lifted at the start of the coronavirus pandemic in March 2020 to help ease an acute shortage of foreign-exchange.