ZiG is vanity of vanities

By Cyprian Muketiwa Ndawana | Apr. 10, 2024

Despite the claims of being backed by gold, odds are mounting against ZiG. It is confronted by inflation on one side, and a deficit of confidence and trust on the other. As if these two negative factors are not sufficient drawbacks, ZiG has a yawning deficit of public acceptance.

GOOD day, President Emmerson Mnangagwa. Your Excellency, the absence of currency reforms presages that there is no guarantee for currency stability. As I see it, like other currencies before it, the Zimbabwe Gold (ZiG) is vanity upon vanity.

Verily, there is no motivation for either expectation or celebration. Considering that it was launched on the backdrop of Zimbabwe being among the countries with the highest inflation rate globally, it goes without mentioning that ZiG, like its predecessor, the bond notes, is also destined to succumb to inflation.

Your Excellency, a change of currency does not address fundamental challenges of inflation. We even had bearer cheques which failed due to inflation. Yet, in addition to these two challenges, fiscal indiscipline is also another untoward culture in government.

Citizens are as wearied as they are worried by the culture of failed currencies. They bear testimony of impoverishment and deprivation due to the economic collapse. Their memories of wads of worthless money are evident and etched on their consciousness.

They are veterans of the struggle for survival. Life has long been a grind. It is burdensome to provide the daily bread. It is my solemn conviction that the solution to the local currency’s loss of value is not to replace it with a new one.

Your Excellency, Zimbabwe has a long history of failed currencies. They came, one after the other, under different names. Yet, each one became defunct due to loss of value as a result of inflation. As ZiG is introduced into circulation, methinks it is about time that the elephant in the room that is the cause of the economic mayhem has to be exposed, and possibly driven out.

As I see it, it was inevitable that the impetuous introduction of the structured currency would fall short of winning the confidence of citizenry. It is not at all the anticipated economic stabiliser. Methinks the stabiliser Zimbabwe desperately needs is credible democracy.

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Like others before it, ZiG has no prospects whatsoever of being bankable. Frankly, true to the conserved wisdom of Solomon, the ZiG is vanity of vanities. It is small wonder that its impetuous introduction came markedly short of winning the confidence and trust of citizenry.

Described as an ambush, the launch was an epitome of poor public relations. It was a violation of the citizenry right to be informed about an issue that has a direct impact on their lives. Yet, it is public knowledge that at critical times, citizenry becomes sensitive to the adequacy of their leadership in handling the issue at hand.

Ordinarily, if citizens has confidence in the leadership, they willingly assign to it the trust to perform the task with minimal consultation. Yet, if confidence is low, as in the case of the new currency’s introduction, they are obviously less tolerant, needing consultation.

Given that over the passage of time, the economy progressively dollarised, the propitious strategy for economic stabilisation was to dollarise completely. With all due respect, foregoing complete the dollarisation option was a classic pathway to falling from sublimity to ridiculousness.

Your Excellency, the passionate disapproval pleas for ZiG warrant your consideration. They are an opportune invitation for you to showcase the listening presidency that you flaunt as one of your qualities. Ironically, entrance fees to the monetary policy breakfast meeting held yesterday in Harare were not pegged in the ZiG currency, but in United States dollars.

Amid the raging debate in response to the introduction of ZiG, it brought disrepute to government that two senior communication officers showed disrespect to citizens who had queries about ZiG. It was untoward to suggest that citizenry need to be enrolled at the Zanu PF Ideological college.

Your Excellency, if you ask me, ZiG is vanity of vanities. Its prospects of total collapse are apparent. It was indeed preposterousness, abounding with conceit, that government introduced it without discharging the obligation of entering into a social contract with citizenry.

Although the new Reserve Bank of Zimbabwe (RBZ) governor John Mushayavanhu emphasised that under his watch, RBZ will refrain from participating in quasi-fiscal operations, which includes paying subsidies on bank loans, allocation of foreign currency at below economic exchange rates, minting and selling gold coins below market prices, among other practices, his vow, was ineffectual to influence the acceptance of ZiG.

Speaking at the presentation of 2024 Monetary Policy Statement, Mushayavanhu declared that he does not believe in quasi-fiscal activities. "I do not believe in quasi-fiscal activities. It is not going to happen under my watch. My mandate is spelt out in the Reserve Bank Act.

It is clear, and I have no intentions to do other people's jobs. I will do my job as the central bank governor as defined in the Act," he pledged his strict abidance to stewardship of the bank. However, the new currency is nonetheless failing to win the confidence of citizens who are sceptical about its consistency.

All things being equal, the pledge of loyalty and abidance to the rule book by Mushayavanhu is indeed noble and commendable. Yet, disparities abound under his watch as the rich gets richer while the poor gets poorer.

Your Excellency, true leadership does not regard power as the ultimate objective. As I see it, it is for times like the one we are in that J F Kennedy presaged, "If a free society cannot help the many who are poor, it will eventually fail to save the few who are rich.” Granted, ZiG is vanity of vanities.