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Government's Currency Reform Stalls As Wheat Farmers Reject ZiG

6 months agoWed, 18 Sep 2024 10:01:13 GMT
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Government's Currency Reform Stalls As Wheat Farmers Reject ZiG

The government’s efforts to promote the use of the Zimbabwe Gold (ZWG or ZiG) faced a major setback last week when the Grain Marketing Board was compelled to pay wheat farmers exclusively in United States dollars.

Farmers rejected payment in local currency, citing its sharp depreciation against the US dollar and arguing that they purchase their inputs in foreign currency.

Economists have warned that paying wheat farmers in US dollars could lead to a broader rejection of the local currency by other farmers and exporters, undermining efforts to build foreign exchange reserves.

Sources cited by NewsDay revealed that wheat farmers threatened to withhold their harvest in protest over payments made in ZWG, fearing potential losses.

During the 2023 winter wheat season, farmers received US$440 per tonne, with payments split 75% in US dollars and 25% in Zimbabwe dollars at the prevailing interbank rate.

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This season, the new producer prices for wheat are set at US$450 per tonne for standard grade and US$470 for premium grade, with payments made exclusively in US dollars.

Former president of the Zimbabwe Commercial Farmers Union, Wonder Chabikwa, told NewsDay that payments in US dollars would alleviate the financial burden of farming costs. He said:

As wheat farmers, we have always preferred to be paid in USD directly because we are always seized with recapitalising our farms in terms of irrigation infrastructure and farming inputs.

To be able to acquire these things, we need foreign currency. Most providers of these services want to be paid in foreign currency so it is making life very difficult for us.

Zimbabwe National Farmers Union president Monica Chinamasa said the GMB should pay farmers timeously so that they hedge against losses. She said:

We prefer to be paid in the USD component because all our financial obligations are in USD.

We pray and hope it will be paid in time, not six months down the line when interest will have accumulated on our obligations.

The Zimbabwe Gold (ZiG), introduced in April 2024, marks Zimbabwe’s sixth attempt in 15 years to establish a stable currency.

Reserve Bank of Zimbabwe (RBZ) governor John Mushayavanhu said that the ZiG would be backed by foreign exchange and gold reserves.

At its launch in April, the ZiG was trading at 1:13.50 against the US dollar. Currently, it has reportedly depreciated significantly, trading between 1:25 and 1:30 on the black market.

This depreciation has led some service providers to price their goods exclusively in US dollars.

Retail chains have largely abandoned the official exchange rate, opting instead to charge prices based on the street rate and have also increased prices in USD.

More: Pindula News

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17 Comments

Zeus mfana · 6 months ago
If u zanu pf farmers can't accept ZiG then who then should accept it
Anonymous · 6 months ago
Obviously everyone who is not in the Zanu PF circle. That was the plan from the beginning.
baba jukwa · 6 months ago
zig is Bull**** l bought a monthly data bundle but it only lasted 2 days kkkkkk Zig + Bond =0
self employed · 6 months ago
Ko zvavanongopinzana mabasa makuru oga oga zve.Ukatochanza kupinda pazvigaro zvematongerwo enyika,wotopinza pinza hama dzako.Vharazipi wakagona mutambo wegore riya.Vanhu ndozvavanoita muupenyu.Kudenga hakuna zvakadaro.Kundotongwa basi,itai zvenyu muchazviona.
🏋️🕺⛹️ · 6 months ago
kkk John mushayazanu was hallucinating when he claimed that come July everyone would be looking for zig, me wonders what kinda weed these guys smoke, it definitely ain't skunk
laugh emoji1
Mai Chimuti · 6 months ago
Nhayi kubva Harare kuenda Bulawayo imariyi Zig ne ZUPCO?
Anonymous · 6 months ago
Better kungoibvisa ZIG yacho kana ma bazi erumende like GMB vachiiramba. NET 1 line hautenge airtime ne Zig.
Anonymous · 6 months ago
the minute u cant buy fuel using a currency thats "weighted on gold " u know whats coming
Z · 6 months ago
STALE NEWS, WHEAT FARMERS ARE BEING PAID IN USD 100%
Patz · 6 months ago
The Zanu Pf wheat farmers successfully refused to be paid in the Zig currency they created living the whole country perplexed on who is supposed to use it then
Patz · 6 months ago
Another backward step for ZIG. Its clear now that Zim has 2 economies- A major or USD economy and a minor or Zig economy
· 6 months ago
Ndakamirira kunzwa kuti Chipfambi cheZANU, Grout (Griot?) nechimupfanha chembeva, Fugu kuti vanchatii! 🤣🤣🤣 ZiWiG ragarira nhanzva, raenda kwakaenda Bond neBearer... Chovha George 🤣🤣🤣
Anonymous · 6 months ago
Musanyepera vanhu imi,kana mashaya zvekuita siyai zim yega
kule · 6 months ago
vazhinji vane mafarms awo ndeve zanu ngavapiwe mazig avo vano arambirei
Zeus mfana · 6 months ago
U zanu pf farmers, passport, fuel stations accept tht ZiG first then whole country will follow
Anonymous · 6 months ago
They don't trust it themselves. Why do they want to take it? It is easier to force everyone else to take it so they can keep all the USD. That was the plan from day one. Make everyone poor so they are reliant on Zanu PF for their daily bread.

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