THE Consumer Protection Commission (CPC) has urged the Reserve Bank of Zimbabwe (RBZ) to collaborate with the Ministry of Industry and Commerce to tackle the ongoing currency disparity, which is affecting the economy.
The CPC effort is aimed at strengthening the local currency exchange rate, encouraging the use of the Zimbabwe Gold (ZiG) currency amid concerns over its continued viability.
These concerns can be seen in the disparity between the formal and parallel forex markets rates. The dollar trades at US$1:ZiG26,98 and US$1:ZiG36 on the formal and informal markets, respectively.
However, according to the RBZ, the ZiG is a stable currency, revealing this week of the continued full coverage of ZiG reserve money (ZiG4,7 billion) and the entire local currency deposits (ZiG15,5 billion) by foreign currency reserves of US$701 million, equivalent to ZiG18,9 billion, as of June 13.
Launched on April 5, 2024, the ZiG was introduced as the fifth domestic currency in over a decade.
This was after the Zimbabwe dollar (ZWL), Real Time Gross Settlement dollar, Bond Note and Zimbabwe dollar (ZWD).
In a report released this week, CPC revealed that the market continues to refuse the ZiG, opting instead for the greenback.
“The RBZ should work with relevant stakeholders, including the Ministry of Industry and Commerce and CPC, to address the disparity in preferred currencies for transactions. This could involve promoting ZiG usage by implementing policies and initiatives to encourage wider acceptance of the ZiG in transactions, particularly for essential goods,” CPC said.
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“The RBZ should continue to closely monitor foreign exchange flows to ensure they remain stable as it is at the moment.”
These recommendations by CPC are to help promote the local currency, which is trying to find its way in the market, as many people have already lost confidence in the ZiG.
Companies are also moving to adopt the US dollar as a functional currency, moving away from the volatile ZiG.
“Given the increasing number of consumer complaints concerning the availability and functionality of point-of-sale (POS) machines in most small shops, it is recommended that the Consumer Protection Commission should work with financial institutions to develop incentives and support programmes for small businesses to adopt POS machines,” CPC said.
In addition, the CPC has urged the Industry and Commerce ministry to promote local products to stabilise the economy.
“The Ministry of Industry and Commerce should implement policies that promote and support local production of essential goods, reducing reliance on imports and helping to stabilise the market. This could include incentives for local manufacturers, access to funding and streamlined processes for importing key raw materials,” CPC said.
“The Ministry of Industry and Commerce should work with the CPC, Zimra [Zimbabwe Revenue Authority] and other relevant authorities to develop a more robust framework for regulating cross-border trade, ensuring that imported goods meet safety and labelling standards.”
