FINALLY, the chickens have come home to roost!
On April 5, 2024, central bank governor John Mushayavanhu, flanked by his lieutenants, announced the introduction of the new currency, Zimbabwe Gold (ZiG).
He appeared optimistic the new unit, which replaced the Zimbabwe dollar would succeed. He even told the world that the currency was backed by a basket of minerals, including gold.
The governor vowed to defend the currency with his life, reiterating that he would never print more money, as that would fuel inflation.
Not under my watch, he declared.
However, five months since the currency's debut, Mushayavanhu is singing another tune. He seems to be forgetting what he promised Zimbabweans. He devalued the gold-backed currency by a whopping 43% on Friday last week after it failed to withstand pressure from the greenback. Its value had plummeted drastically on the black market, with the premium rising to about 122%, making trading in the formal sector difficult. But one would ask: How can a gold-backed unit lose value like this? This is because the price of gold has been appreciating, hitting US$2 630 per ounce recently.
So, Mr Governor, what is happening?
Is our ZiG really backed by gold and other minerals, or was it just rhetoric? Surely, we deserve answers as Zimbabweans. And we need them now!
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We have suffered enough. Remember, we lost our lifetime savings in 2009 after the government dumped the Zimbabwe dollar.
We were robbed again in 2016 when the government introduced bond notes.
So, when the fiscal and monetary authorities informed us that ZiG was backed by a basket of minerals, we cautiously believed them.
We thought they were sincere.
Now we have been left hurt and broken, as the consequences of these actions have been devastating. Formal businesses and consumers are struggling to cope with increased costs and uncertainty.
The devaluation has led to higher prices of basic commodities and essential goods. The impact on the manufacturing sector has been severe, with many businesses facing significant foreign exchange losses.
Now that our fragile trust has been tampered with, we wonder how the so-called gold-backed currency will succeed.
We gave the authorities the benefit of doubt, but they took us for a ride instead.
We urge the fiscal and monetary authorities to keep their promises. Consistency, trust, and transparency are key, especially when dealing with currency matters. So far, authorities have failed dismally on those tenets — it is difficult to trust them.
Authorities should have been honest with Zimbabweans that ZiG was backed by nothing. This tendency of gambling with people's lives must come to an end. As things stand, the chances for ZiG’s acceptability are next to none. And who is to blame? It is the government.
It is time for the government to take responsibility for these actions and provide a clear plan to rectify the situation. The people of Zimbabwe deserve better than to have their livelihoods gambled away.
