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Vice President Constantino Chiwenga said that the government is monitoring financial market activities to identify ways to strengthen the Zimbabwe Gold (ZiG) currency, which has been losing value on the parallel market in recent months.
Currently, fuel service stations do not accept ZiG, and supermarkets and wholesalers are relying on street rates when selling goods in the local currency.
Speaking at the burial of national hero (Retired) Brigadier General Shadreck Ndabambi at the National Heroes Acre in Harare on Wednesday, September 4, Chiwenga, who is serving as Acting President, said the government is implementing measures to encourage the wider use of the ZiG. Said Chiwenga:
<blockquote>
No nation will develop without sovereign control, defence and growth of its own national currency. Our government introduced the Zimbabwe Gold as our new sovereign currency.
It is our responsibility as a nation to embrace and protect the new currency as a bedrock and anchor of our economic development.
Let me assure you that government is working to promote the wider use of our local currency and is putting in place measures that will eliminate gaps that are creating arbitrage opportunities in the exchange market.
Government will continue to monitor the operations of our financial markets and promote efforts to grow and stabilise our national currency.
</blockquote>
The Reserve Bank of Zimbabwe (RBZ) introduced the Zimbabwe Gold (ZiG) currency in April, following the collapse of the Zimbabwe dollar (RTGS and bond notes).
Just five months later, the new currency has experienced significant depreciation, now trading at US$1 to ZiG24 on the parallel market. At the time of its launch, the ZiG was valued at US$1 to ZiG13.50.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Pindula News

The Vice President said the government wants to make the ZiG currency stronger. Right now, some places don't accept it, so they use street rates to sell things. The government introduced the ZiG in April, but its value has gone down a lot since then. They want people to use the ZiG more and are working to stop prices from going up too fast. It's important for Zimbabwe to have its own strong currency to develop the country. Government will keep an eye on the financial market to help the ZiG grow.

Efforts Underway To Strengthen ZiG Currency - VP Chiwenga

Bulawayo Mayor Councillor David Coltart has called for Zimbabwe to either abandon the ZiG or exclusively adopt the US dollar and the Rand, citing significant losses incurred by local authorities and supermarkets due to exchange rate disparities.
In a post on his X page, Coltart highlighted the issues stemming from the use of an official exchange rate (US$1: ZiG13.80) compared to a street rate (US$1: ZiG24), which has led to financial losses for businesses forced to operate under the official rate.
The CCC councillor added that aside from abandoning the ZiG in favour of the USD and ZAR, the only viable alternative for Zimbabwe is to allow the ZiG to float freely without artificial rate manipulation.
Coltart’s remarks follow reports that TM Pick n Pay has permanently closed its Harare Street branch. He wrote:
<blockquote>
Last night I had dinner with a Bulawayo supermarket owner and he told me of his inability to compete with the informal sector – unlike the informal sector he has to pay taxes, rates and his staff – but most of all he is compelled to sell his goods at the official ZIG rate.
He is buying the same goods he has to sell at the official ZIG from manufacturers who sell to him with impunity at the ZIG parallel rate.
Informal traders can come to his supermarket and buy the same goods in ZIG having burned their US$ and who then sell the same for US$ at a lower price in US$ than the supermarket can sell it for, thus totally undercutting the supermarket, right outside its doors.
He doesn’t know whether he can continue – and at the root of this all is the government’s insistence that the ZIG be artificially kept at a value which bears no relation to its actual value. Tied to this is seemingly one law for retailers and another for manufacturers.
The City of Bulawayo isn’t exempt from this either. The City is forced to accept payment of rates at 13.80 at present when the real rate in the streets is 24. This is further undermining the balance sheet and general finances of Bulawayo.
Zimbabwe has been down this path created by insane policies far too often.
I have said repeatedly that a new Zimbabwean currency should only be introduced when trust in the RBZ and Ministry of Finance has been restored. It had not been when ZIG was introduced and trust has been further undermined since its introduction.
We have no choice but to abandon the ZIG again and revert to either the US$ or Rand. If we do not entire swathes of industry and the retail sector will be destroyed. The only other option is to allow the ZIG to float freely without artificial manipulation of its rate.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Supermarkets and councils in Zimbabwe are struggling because of the exchange rates. One mayor wants to stop using the local currency and switch to US dollars or South African rand. A supermarket owner said he can't compete because he has to sell goods at a low official rate, even though he buys them at a higher street rate. The City of Bulawayo is also losing money because they have to accept lower rates for payments. The mayor thinks Zimbabwe should switch to a different currency or let the local currency's value go up and down naturally. If they don't change, many businesses could fail.

Supermarkets, Councils, Chocking Under "Artificial" ZiG Rate

The Reserve Bank of Zimbabwe (RBZ) has scrapped charges for electronic cash transactions under US$10 or the equivalent in Zimbabwe Gold (ZiG) to promote digital transactions across the country.
In his 2024 Mid-Term Monetary Policy Statement on Friday, 30 August, RBZ Governor John Mushayavanhu announced that this measure will take effect on 01 September 2024. He said:
<blockquote>
To further promote the use of electronic means of payment, the Reserve Bank is, with effect from September 1, 2024, exempting electronic transactions of less than US$10 or the ZiG equivalent from bank charges.
This measure will remove the cost of using electronic means of payments by making such transactions a near-cash characteristic, consistent with the Reserve Bank’s drive towards digital cash.
</blockquote>
This decision comes amid a cash crisis in the country, stemming from a shortage of ZiG coins and notes since the new currency was introduced in April this year.
Mushayavanhu said the central bank intends to increase the circulation of lower ZiG denominations to alleviate the situation. He said:
<blockquote>
To ensure increased circulation of ZiG in the economy the following measures will be undertaken: to increase the injection of cash in line with demand while preserving the ongoing initiatives to entrench the country’s cash-lite economy; to continue to inject more small ZiG denominations into the economy to ease the problem of change and eliminate the rounding up of prices by businesses.
</blockquote>
Mushayavanhu also said the central bank is committed to enhancing the distribution and circulation of ZiG by expanding Homelink outlets in rural areas.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The Reserve Bank of Zimbabwe removed charges for small electronic transactions under US$10 to encourage digital payments. This change starts on September 1, 2024. The country is facing a shortage of cash, so the RBZ aims to boost the use of digital money. They plan to introduce more low-value coins to help with change shortages. Additionally, the central bank wants to expand the availability of electronic payment services in rural areas. These steps are meant to make it easier for people to use electronic money instead of physical cash.

RBZ Scraps Charges For Electronic Transactions Under US$10

Former Chivi South MP Killer Zivhu (ZANU PF) has derided the country’s gold-backed currency, the ZiG, claiming it has caused significant problems for Zimbabweans due to its rapid devaluation.
In recent days, social media platforms have been flooded with price stickers from supermarkets, revealing sharp increases in the cost of basic grocery items since the currency’s launch in April 2024.
For example, a 2-litre bottle of cooking oil, initially priced at around ZiG42, now exceeds ZiG70 in some stores, despite the official exchange rate changing by less than ZiG1.
These price hikes suggest that retailers are relying on the street rate, which is reportedly above US$1: ZiG20.
In a post on X, Zivhu mocked the ZiG, comparing it to petrol mixed with ethanol, which some motorists claim is of poor quality and lacks durability. Said Zivhu:
<blockquote>
Pakuda 50kg ye headache tablets kuti ukwanise kushandisa ZIG, ukarega unofa ne BP, ukapinda mu Shop ne ZIG rinopera fast kunge ethanol yatinotengeserwa tichinzi petrol, zvinhu zvacho masaramusi chete. (You need 50kg of headache tablets to be able to use ZIG, if you stop, you’ll die from BP. If you enter the shop with ZIG, it disappears fast like the ethanol sold to motorists as petrol, the stuff is just rubbish)
</blockquote>
Zivhu’s sentiments were backed by an economist, Professor Gift Mugano, who tagged government apologist Mmatigari in his comment. Mmatigari responded:
<blockquote>
So Killer Zivhu is your think tank on currencies? You are disappointing.
</blockquote>
Mugano then said Zivhu’s comments should not be ignored as he is one of the most progressive Zimbabweans”, who lives with the people and is a consumer. Wrote Mugano:
<blockquote>
[Killer Zivhu] is one of the most progressive Zimbabwean I admire. He is real. He lives with the people. He is a consumer. In this particular case of the ZiG, he gave his own experience as a consumer. If you don’t respect him/like him, that is your problem.
Zvenyu zvekungohumana izvo and carry venomous mouth everywhere hazvivaki nyika.
I submitted grounded solutions on what must be done to make ZiG succeed (check my previous posts which I posted in April). What did you do, you led a battalion of vasvasvangi on me. After I noticed that you rejected my well thought advice, I told you that ZiG will not survive.
Here we are. How is the ZiG performing? It’s a dismal performance. Companies are closing and consumers are suffering.
We have gone through 27 years of currency crisis, that is, from 14 November 1997 (the black Friday when the Zimbabwe dollar crashed). Over these years, you haven’t learnt anything as far as the drivers of the currency crisis are concerned?
If not please learn to engage in a constructive and meaningful conversation so that you can learn from experts in the field tichivaka nyika. Zimbabwe is for us all.
There are no designated shops/hospitals for the ruling party supporters nor opposition supporters. We go into the same shops/hospitals tichisvasvangwa ne economy tese.
Learn or perish
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Killer Zivhu, a former MP, criticized the new ZiG currency in Zimbabwe, saying it is causing prices to go up too quickly. He compared it to bad petrol that disappears fast. An economist named Professor Gift Mugano agreed with Zivhu and said his experience as a consumer should be taken seriously. He also urged people to learn from experts and have constructive conversations about the currency. Many people are unhappy with the ZiG currency and how it is affecting the economy and people's lives.

50kg Of Pills Needed To Cure Headache Caused By ZiG - Killer Zivhu

The use of Zimbabwe Gold (ZiG) for domestic transactions has increased to 39 per cent since its introduction in April 2024, according to a senior government official.
Speaking at the Zimbabwe Economic Society and Friedrich-Ebert Stiftung (ZES/FES) mid-term budget breakfast meeting in Harare on August 21, Finance, Economic Development, and Investment Promotion Permanent Secretary George Guvamatanga said that ZiG now represents 39 per cent of domestic transactions, up from 30 per cent in April.
He added that the remaining 61 per cent of transactions continue to be conducted in foreign currency, primarily US dollars.
Guvamatanga also highlighted that most of the local currency is being used for electronic transactions rather than physical notes and coins. He said (via <a href="https://www.herald.co.zw/zig-registers-gradual-growth-in-transactions/">The Herald</a>):
<blockquote>
To say that the ZiG is not circulating is not correct, the ZiG has been accepted in the market but it is only circulating in electronic form.
When we introduced the ZiG, the portion of transactions was 80-20 per cent and now we are at 61-39 per cent so there has been a very marked increase in the use and acceptance of ZiG, we are seeing more transactions in ZiG.
From a Government revenue perspective, it is the same. There is also movement from this 80-20 percent and now we are at 61-39 percent.
The ZiG is stable, but we just need to make sure that the smaller physical notes and coins circulate to where it is required.
</blockquote>
At the beginning of the year and throughout much of last year, the USD accounted for approximately 80 per cent of local transactions due to the rapid depreciation of the Zimbabwe Dollar.
The introduction of the ZiG has provided some stability; however, the persistent shortage of foreign currency continues to be a significant challenge for Zimbabwe’s economy.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe Gold (ZiG) is being used more for local transactions, making up 39% of all transactions. This is up from 30% in April. Most transactions are still in US dollars. ZiG is mainly used electronically rather than in physical money. The introduction of ZiG has helped stabilize the economy, but there is still a lack of foreign currency in Zimbabwe. The government is working on making sure smaller ZiG notes and coins are available. Overall, ZiG is being accepted more in the market, showing a positive trend in the country's financial situation.

ZiG Usage Now Accounts For 39% Of Domestic Transactions - Guvamatanga

Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu has said the newly introduced ZiG currency now accounts for approximately 30% of all transactions in the economy, up from 20% at the time of its introduction in April 2024.
When the ZiG was first introduced on April 5, 2024, the central bank estimated that between 80 and 85% of all transactions in the economy were settled using US dollars, with the remaining balance in the former Zimbabwean dollar, which was replaced by the ZiG.
Last week, the central bank announced it was injecting US$50 million into the interbank market to stabilise the exchange rates.
In an interview with <a href="https://www.sundaymail.co.zw/zig-now-accounts-for-30pc-of-transactions-rbz">The Sunday Mail</a>, Mushayavanhu explained that the release of foreign currency into the market was prompted by a rise in liquidity, rather than an increased demand for US dollars. Said Mushayavanhu:
<blockquote>
There was no upsurge in demand for foreign currency. Rather, there was a shift in the product pricing ratio, with the ZiG now accounting for 30 per cent of all transactions, up from the initial ratio of 80:20 in favour of the US dollar.
</blockquote>
Economist and member of the RBZ Monetary Policy Committee Persistence Gwanyanya said:
<blockquote>
There has been an increase of ZiG circulation in the economy and this has resulted in some pressures in the market.
However, this is not a negative issue; it is a good problem to have.
It shows that there is an increasing circulation of the structured currency in the economy.
We were worried when 80 per cent plus of transactions were being done in US dollars. Although it gives some form of stability, it is against what we want, which is effectively de-dollarisation.
So, when the economy is de-dollarised, the challenge related to the convertibility of ZiG is transferred to those that use US dollars for importation.
Naturally, there will be pressure on the US dollar and if it is not managed, there will be escalated volatility.
We cannot avoid this pressure because it is indicative of the trajectory we are taking of de-dollarisation, but we should not spin the market, which is exactly what we did by injecting US$50 million.
</blockquote>
Early this month, President Emmerson Mnangagwa hinted that ZiG would become the sole legal tender before the previously announced 2030 deadline to phase out the current multicurrency system.
Speaking in Mutare during the commissioning of a new fruit juice and water processing plant on 04 July, Mnangagwa said ZiG may become the sole currency as early as 2026.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The ZiG currency in Zimbabwe now accounts for 30% of transactions, up from 20% in April when it was introduced. The central bank injected US$50 million to stabilize exchange rates. The release of foreign currency was due to a rise in liquidity, not increased demand for US dollars. Economists see the increase in ZiG circulation as a positive sign, showing progress towards de-dollarization. President Mnangagwa hinted that ZiG might become the only legal currency earlier than the 2030 deadline. This change is meant to improve the economy and move away from relying heavily on US dollars.

ZiG Now Accounts For 30% Of Transactions - Mushayavanhu

The surge in black-market exchange rates, which peaked at around US$1:ZiG25 last week, has forced some businesses in Bulawayo to reject payments in the local currency.
While the official exchange rate remains at about ZiG14 to the US dollar, the soaring parallel market rate has further diminished consumer purchasing power.
According to the <a href="https://www.chronicle.co.zw/shops-continue-to-reject-zig/">Chronicle</a>, some businesses in Bulawayo have resorted to feigning network issues with their point-of-sale (POS) machines as a pretext to exclusively demand foreign currency transactions.
Specific examples include Greens Supermarket and Oceans, two retail outlets in Bulawayo that have allegedly been turning away shoppers attempting to pay electronically in the local currency, claiming their POS systems were not functional.
Mthokozisi Nkosi, the chairperson of the Consumer Protection Commission (CPC), has stated that the Commission will take action against these shops that are unlawfully rejecting the ZiG as a means of payment. Said Nkosi:
<blockquote>
We understand technology fails at times. We equally understand that it is serviceable, hence no reason to continuously claim the system is out of order.
Let these businesses be warned that we cannot be bystanders when they flagrantly violate consumer laws.
The law is clear that we are in a multi-currency regime and consumers have a choice on which currency to use as they transact.
We are coming after these unscrupulous businesses. Our Bulawayo office is going to be descending on these rogue elements.
We strongly warn them to stop this practice forthwith.
</blockquote>
Confederation of Zimbabwe Retailers president Denford Mutashu said retailers and wholesalers should accept the ZiG. He said:
<blockquote>
As CZR, we continue to urge retailers and wholesalers to accept ZiG and not inconvenience customers as we continue to work with the Government in addressing the supply chain challenges impacting sector players negatively.
</blockquote>
According to economist Prosper Chitambara, the surge in parallel market exchange rates is a clear indication that businesses are struggling to access adequate foreign currency through official channels. Said Chitambara:
<blockquote>
From conversations with people in business they are saying that it is difficult to access foreign currency at the interbank market, so there is a strong demand for US dollars by businesses that are not satisfied by the interbank market.
This creates a lot of pressure on the exchange rate. If one fails to access forex for legitimate business on the interbank market, one is forced to seek recourse to the black market.
</blockquote>
Last week, the Ministry of Finance, Economic Development, and Investment Promotion blacklisted 51 contractors, after investigations revealed they were supplying the black market after receiving payment for their services or goods.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The article talks about how the value of the Zimbabwe dollar, called ZiG, is going down in the black market. This is causing some shops in Bulawayo to not accept payments in the local currency. Some businesses are pretending their machines are not working so they can only take foreign currency. The Consumer Protection Commission is going to take action against these shops. The Confederation of Zimbabwe Retailers wants shops to accept ZiG. Businesses are struggling to get foreign currency from official channels, so they are turning to the black market. The government is investigating some contractors for selling on the black market.

Shops Continue To Reject ZiG As Street Rates Soar

Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu has said the Central Bank over US$50 million into the interbank foreign exchange market to complement the supply of foreign currency by Authorised Dealers to meet demand by economic agents.
In a statement issued on Thursday, 25 July, Mushayavanhu said in recent weeks, the Reserve Bank has witnessed a build-up in pipeline demand for foreign currency at banks, thus putting undue pressure on the foreign exchange market which necessitated the injection of the US$50 million. Reads the statement:
<blockquote>
RESERVE BANK PARTICIPATION IN THE FOREIGN EXCHANGE MARKET TO CONSOLIDATE ZiG STABILITY
Since 5 April 2024, the Reserve Bank has been participating in the interbank foreign exchange market to supplement liquidity under the Willing-Buyer Willing-Seller (WBWS) trading arrangement.
The participation of the Reserve Bank in the interbank market has helped to complement the supply of foreign currency by Authorised Dealers to meet demand by economic agents.
In recent weeks, the Reserve Bank has witnessed a build-up in pipeline demand for foreign currency at banks, thus putting undue pressure on the foreign exchange market.
In light of the above, the Reserve Bank is immediately injecting over US$50 million into the interbank foreign exchange market guided by the obtaining pipeline demand at banks as of 25 July 2024.
Consistent with the April 2024 Monetary Policy measures that introduced the ZiG currency, the Reserve Bank has been building foreign reserves which now stand at about 4 times cover of the reserve money.
The country continues to generate significant foreign currency to meet import requirements as evidenced by an almost 10% increase in foreign currency receipts during the first half of 2024 compared to the same period in 2023.
Reflecting the significant foreign currency receipts, the bulk of foreign payments are currently being met by balances in foreign currency accounts (FCA).
Going forward, the Reserve Bank remains an active participant in the interbank foreign exchange market to complement foreign currency supply under the WBWS trading platform to meet all genuine and bonafide foreign payments.
The Reserve Bank is satisfied with the general acceptance and uptake of ZiG by the market and will continue to ensure currency and exchange rate stability in the macro-economy.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The Reserve Bank of Zimbabwe (RBZ) has put over US$50 million into the interbank foreign exchange market to help meet the demand for foreign currency. This is to stop banks being under too much pressure. The RBZ has been injecting money into the market since April 2024 to help keep the currency stable. The country is generating a lot of foreign currency, which is helping to meet the demand for imports. The RBZ will keep participating in the market to make sure there is enough foreign currency for genuine payments. They are happy with how well the new currency, ZiG, is being used.

RBZ Injects US$50 Million Into Interbank Forex Market

The recent comments by President Emmerson Mnangagwa regarding plans to make the Zimbabwe Gold (ZiG) the sole legal tender in the country before 2030 have prompted banks to adopt a more cautious approach to long-term lending.
In October 2023, the government gazetted Statutory Instrument (SI) 218 of 2023, which extended the use of the multiple-currency system in Zimbabwe until December 2030. 
But in his address at the commissioning of the Mutare Teachers College’s fruit juice and water processing plant on July 4, 2024, President Mnangagwa hinted that if ZiG maintains stability, dollarisation may end in two years. He said:
<blockquote>
In two years, in fact two years is too far off, but there will come a time when our ZiG currency has fully penetrated the market, then I will give a directive that the country will be using the ZiG only.
</blockquote>
A top industrialist, who asked not to be named, told <a href="https://newsday.co.zw/theindependent/local-news/article/200029828/new-currency-plan-unsettles-banking-sector">The Independen</a>t that Mnangagwa’s comments have made banks adopt a cautious approach, trying to determine whether the President’s comments were a policy statement or merely political rhetoric. Said the industrialist:
<blockquote>
There are political statements and there are policy statements; what I was hearing is that it was a political statement.
I think what the President was saying is the goals for 2030 might happen earlier, not necessarily saying this is what was going to happen.
What banks have been trying to do is establish certainty in what is going to happen next.
So, they have not gone to anyone to say we are not lending but they are not doing anything. They are waiting for clarity; they are trying to understand whether this is a policy or a political statement and establish a level of comfort before they continue with long-term lending.
It will be harmless to continue until 2030 with a stable local currency in a multi-currency environment.
What authorities should be uncomfortable with is when the US dollar begins to affect the stability of the ZiG.
</blockquote>
A top business leader said many companies had been struggling to access loans for a long time. Said the business leader:
<blockquote>
Regarding the President’s remarks about de-dollarising by 2028, this, in my view, has to be taken in the context of the well-articulated and publicised plan by the government to end the country’s reliance on the USD and establish the ZiG as the sole local transacting currency.
Accordingly, we still stand guided by Statutory Instrument 218 of 2023, being aware that the government’s aim is to achieve the mono-currency position before December 31, 2030.
The challenges of accessing long-term funding cannot be solely attributed to the President’s remarks. Access to finance, more so, long-term funding has been a perennial problem.
What would help resolve this challenge would include policy consistency and predictability, among other factors.
As such, pronouncements that are in line with policy would not be expected to cause market shocks of grave significance.
</blockquote>
In November 2023, Finance, Economic Development and Investment Promotion Minister Mthuli Ncube stated that the government’s decision to enact SI 218 of 2023 was prompted by the banks’ refusal to lend money in both the Zimbabwe dollar and the United States dollar. Ncube said at the time:
<blockquote>
We are headed for mono currency, let’s be clear about that, but we want order. So the extension to 2030 was to create order and calm in the market.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

President Mnangagwa wants to make ZiG the only money by 2030. Banks are worried about lending money for the future. They don't know if the President's plan is real or just talk. They are waiting for clarity before lending long-term. Many businesses struggle to get loans. The government aims for ZiG to be the only money by 2030. The problems with getting loans are not just because of the President's plan. Banks didn't want to lend in both Zimbabwe dollar and US dollar, so the government made a plan to make things calm until 2030.

Plans To Make ZiG Sole Legal Tender Unsettles Banks

Zimbabwe’s largest independent brokerage, Imara Asset Management, says the government should restore the trust of citizens rather than suggest they be forced to abandon the US dollar, reported <a href="https://www.bnnbloomberg.ca/investing/2024/07/19/zimbabwes-imara-says-push-to-zig-sole-currency-is-startling-and-concerning/">Bloomberg</a>.
Imara Asset Management chief executive officer John Legat and chief investment officer Shelton Sibanda said:
<blockquote>
Rapid local currency depreciation episodes and the attendant hyperinflation years are still fresh in the minds of most Zimbabweans.
</blockquote>
Imara said those experiences eroded confidence in Zimbabwe’s economic and monetary authorities and the “focus for the government should be on building that lost trust.”
Zimbabwe launched a new gold-backed currency called the ZiG ((Zimbabwe Gold) in April 2024, its sixth attempt in 15 years to have a local currency.
Previous efforts collapsed amid sky-rocketing inflation and 80% of payments are now made in United States dollars.
President Emmerson Mnangagwa recently suggested the ZiG could become the sole legal tender as early as 2026.
Zimbabwe briefly banned the use of foreign currencies in June 2019 following the reintroduction of the Zimbabwe dollar, which it had abandoned a decade earlier.
The currency ban was, however, reversed at the onset of the coronavirus in March 2020.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe's government wants to make a new gold-backed currency called ZiG the only money people can use. But Imara Asset Management thinks this is a bad idea. They say the government should make people trust them first. Many people remember when Zimbabwe's money lost its value and prices went up a lot. People lost faith in the government then. The government has tried to make a new currency 6 times in the last 15 years, but it didn't work. Most people use US dollars for payment now. The President wants ZiG to be the only money by 2026.

Think Tank Expresses Alarm Over Push For ZiG As Zimbabwe's Sole Currency

The Reserve Bank of Zimbabwe (RBZ) says the cash and mineral reserves supporting the new currency, Zimbabwe Gold (ZiG), have increased from US$285 million to approximately US$370 million in the past three months.
In an interview with <a href="https://www.sundaymail.co.zw/price-stability-to-continue-reserves-backing-zig-shoot-to-us370-million">The Sunday Mai</a>l, RBZ Governor John Mushayavanhu asserted that the central bank has consistently ensured that ZiG remains fully backed at all times. He said:
<blockquote>
The Reserve Bank has been accumulating reserves from royalties of gold and conversion of in-kind royalties of other precious minerals such as diamonds, lithium and platinum to gold reserves.
As a result, the total reserves have progressively increased by about 30 per cent, from US$285 million as of April 5, 2024, to above US$370 million as of the end of June 2024.
The ZiG is backed by a reserve of foreign currency and precious metals, primarily gold, held by the central bank.
</blockquote>
Mushayavanhu added that the ZiG had performed “exceptionally well” since its introduction on April 5 2024. He said:
<blockquote>
Concerning the performance of ZiG in the past three months, I am happy to say that the new structured currency has lived up to expectations and has performed exceptionally well.
As a structured currency, the expectation is that the ZiG exchange rate should mimic the developments in the price of assets backing it, which include the price of gold and other precious minerals, and inflation differentials between the US dollar and ZiG inflation.
The Reserve Bank remains committed to maintaining the full backing of the new currency and engender desirable conditions for currency and exchange rate stability in the macro-economy.
</blockquote>
Last week, President Emmerson Mnangagwa announced that the country’s new currency, the ZiG, will become the sole legal tender within the next two years, once it has fully penetrated the market.
However, not everyone is in full support of the President’s timeline. Prominent Zimbabwean economist Gift Mugano has cautioned the government against rushing to make the ZiG the sole legal tender before first establishing the minimum requirements for the new currency to succeed.
Mugano warned that prematurely enforcing the ZiG as the lone legal tender could have adverse consequences if the necessary economic conditions are not yet in place. Said Mugano:
<blockquote>
The introduction of a local currency requires basic minimum requirements such as current account surplus, fiscal consolidation (we have to reduce our debt significantly to regions averaging 30% of GDP); a highly productive economy; single-digit inflation and stable exchange rates. In reality, it is very difficult to attain all these conditions at once. However, we must strive to build a productive and competitive economy.
I would like to argue that the best way to back our currency is to back it with production. We need disruptive structural policies, that is, industrial policy, agricultural policy, trade policy and energy policy &amp; energy master plan. These policies must be anchored on twin objectives, that is, import substitution and export drive.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

RBZ Says Reserves Backing ZiG Rose To US$370 Million

Following President Emmerson Mnangagwa’s remarks on Thursday, July, stating that the ZiG would become the sole legal tender before 2030, economist Gift Mugano offered his perspective.
Mugano stated that the government must first establish the minimum requirement for the new currency to succeed before implementing such a policy.
He also advised that policymakers should not introduce new policies on a whim, but rather listen to the needs of the market and strive to develop evidence-based, market-driven policies. Wrote Mugano:
<blockquote>
<h2>On President Emmerson Mnangagwa’s Statement Regarding the Introduction of Monocurrency (i.e., ban of USD):</h2>
This week, President Mnangagwa announced that he will soon introduce ZiG as a monocurrency (i.e., in less than 2 years) if he is satisfied that ZiG is now circulating across the whole country.
Well on time before President Mnangagwa pronounces policy decision to ban the use of the USD, I thought that it is wiser that I capitalise on the President’s open-door policy [George Charamba, the Deputy Chief Secretary in the Office of the President and Cabinet (Presidential Communications)]and share with him my humble views on critical considerations which must be taken into account before introducing a new currency or mono-currency:
1) GOZ must develop a culture of seeing through its policies to the expiration date before making conflicting statements. For example, the pronouncements by the President that he will soon introduce ZiG as a monocurrency is in direct contradiction with the SI 218 of 2023 which extended the use of the multiple currency system to December 2030. This President’s statement, him being the AUTHORITY, will put markets into disarray and will see banks cutting back on USD lending – this will come with massive negative consequences on the economy. In the same vein, some banks with long-term loans in USD will start counting their losses – this will erode trust in government policies and confidence levels.
2) The introduction of a local currency requires basic minimum requirements such as current account surplus, fiscal consolidation (we have to reduce our debt significantly to regions averaging 30% of GDP); a highly productive economy; single-digit inflation and stable exchange rates. In reality, it is very difficult to attain all these conditions at once. However, we must strive to build a productive and competitive economy. I would like to argue that the best way to back our currency is to back it with production. We need disruptive structural policies, that is, industrial policy, agricultural policy, trade policy and energy policy &amp; energy master plan. These policies must be anchored on twin objectives, that is, import substitution and export drive.
3. The informal sector has always been and will always be a hindrance to government policies. The informal sector runs its affairs based on informal rules, not government policies. In its current state, GOZ has no capacity to rein in the informal business. We must formalise the informal sector. The best way to formalise the informal sector is to build a productive economy (see (2)) which will see some sections of the informal sector such as vending and boot economy disappearing as people move into the formal sector/secures formal jobs. Again, with a productive economy, genuine small businesses/informal sectors will remain such as distributors and, through market linkages, will be formalised. In short, we must grow the formal sector.
4. We need to build confidence. Confidence building requires critical actors such as banks and GOZ to walk the talk. Banks, for example, must provide sound banking products at affordable costs/reduce bank charges drastically. The main source of income for banks must be interest rate not bank charges! GOZ must develop evidence-based &amp; demand-driven, credible and predictable policies. Most importantly, it is my humble view that GOZ must undertake nationwide consultations which will lead to a national dialogue on currency crisis and possible remedies. The output of this dialogue should be a de-dollarisation roadmap which is built on the realities facing the country and national consensus.
When introducing a new currency or addressing the currency crisis, it is my humble view that we must be more pragmatic and inclusive in our approach. The fact of the matter is that our country has been held back by currency crisis for close to 27 years, that is, from 14 November 1997 to date and there is no sign of it ending any time soon. This means that we need to do things differently hence my foregoing submission.
As I end my submission, I would like to remind President Mnangagwa of critical events regarding currency matters in Zimbabwe:
1) In February 2009, GOZ adopted the USD as the main currency. The market dumped ZWD and introduced USD. The USD was not introduced by Patrick Chinamasa as he always claims. He was the acting Minister of Finance – he was forced by the market to adopt the USD. Here is the evidence, Chinamasa’s budget of 2009 was in quintillions of ZWD, not USD.
2) My good brother, Honourable Mthuli Ncube introduced monocurrency on 24 June 2019. On the same date, I was the first guest at StarFM on Linda Muriro on Monday and I underscored that we will return to USD in March 2020. I made repeated claims on StarFM on subsequent programmes of Linda Muriro on Monday. It came to pass. In March 2020, we went back to USD. I am raising this precedence so that we can draw lessons from history.
<h2>Lessons:</h2>
1) We must establish the minimum requirement for the introduction of the new currency if we want our currency to succeed (see my submission above).
2) When it comes to economics, the market is the best constitutional court on any economic matter. Policymakers must always listen to the needs of the market and must always endeavour to develop evidence-based and market-driven policies.
Yours Truly,
Professor Gift Mugano (Ph.D)
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Economist Gift Mugano Weighs In On Mnangagwa's ZiG Currency Plans

The Reserve Bank of Zimbabwe (RBZ) under new governor John Mushayavanhu reportedly destroyed millions’ worth of Zimbabwe Gold (ZiG) banknotes.
According to <a href="https://thenewshawks.com/mushayavanhu-lays-to-waste-zig-banknotes-worth-millions/">The NewsHawks</a>, these banknotes, printed at considerable expense, bore the signature of Mushayavanhu’s predecessor John Mangudya.
When Mushayavanhu announced the introduction of the ZiG currency on April 05, there were already millions of banknotes of the new currency that had been printed under his predecessor, Mangudya.
These pre-printed notes had to be destroyed to remove the ones signed by Mangudya, which Mushayavanhu did not want to circulate alongside notes bearing his signature.
According to the report, that was the reason the new ZiG notes took almost a month to introduce as the RBZ had to print again from scratch. The NewsHawsks reported an RBZ official as saying:
<blockquote>
When Mushayavanhu came in, there were already ZiG banknotes that were printed in large quantities and signed by Mangudya.
Mushayavanhu was initially expected to replace Mangudya whose 10-year term at the RBZ was due to end on 30 April 2024.
However, in a notice, President Emmerson Mnangagwa brought forward his appointment in an official gazette: (It is hereby notified that His Excellency the President has, in terms of section 14 of the Reserve Bank of Zimbabwe Act (Chapter 22:15) appointed John Mushayavanhu as the Governor of the Reserve Bank of Zimbabwe for a period of five years beginning on March 28, 2024, and ending on March 27, 2029′).
</blockquote>
Mushayavanhu’s tenure at the helm of the Central Bank started more than a month earlier so that he could take charge of the ZiG process.
RBZ officials were cited as saying Mushayavanhu did not want the new currency to be associated with Mangudya in any way, hence the already printed and signed notes had to be destroyed. Said an official:
<blockquote>
The ZiG notes that were signed by Mangudya and bore his signature had to be destroyed as Mushayavanhu wanted a clean break from the past and not to be associated with bond notes or any other currency version issued in the past.
For better or worse, Mushayavanhu’s attitude is that he is different from Mangudya and all his predecessors, which is why he says he will never print money, ‘not under my watch’.
The amount of liquidity in the market at the time was RTGS16.5 trillion (US$500 million).
The proportion of cash in market liquidity varies depending on the market, asset class, and economic conditions…
Now, in this case, cash was about US$50 million in the market and 5% of that had been printed, probably US$5 million which means that the RBZ under Mushayavanhu destroyed or burnt banknotes worth that.
</blockquote>
An RBZ official revealed that the RBZ had started printing ZiG notes well before the new currency was launched. Said the official:
<blockquote>
There was a liaison platform behind the scenes bringing together Mangudya and Mushayavanhu for a smooth transition.
Mangudya started the process and hoped Mushayavanhu would continue from where he left, only to discover that his successor — coincidentally another John — was not interested in that.
He wanted to draw a line and start afresh even though some ZiG notes had been printed.
Mangudya had built some gold and cash reserves which he handed over to Mushayavanhu to ensure he started on stronger footing, but the issue of who signs the ZiG notes became a moot point.
Mangudya thought there was nothing wrong with him signing some of them and Mushayavanhu some, with the ones signed by the former subject to be phased out from circulation gradually, but the latter wanted them out of the market before they were even formally introduced.
That ensured Mushayavanhu launched ZiG without notes, forcing the country and market to wait for a month while they were being printed.
This also implied that millions of dollars worth of banknotes signed by Mangudya had to be burnt or destroyed at a huge cost.
</blockquote>
ZiG notes only hit the market on 30 April, more than three weeks after the currency was launched because the printed notes had been withheld, destroyed and were being reprinted.
Authorities say ZiG is backed by US$575 million worth of reserves: foreign currency, gold, and other precious metals.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

RBZ Governor John Mushayavanhu Destroyed ZiG Banknotes Worth Millions | Report

Residents and business owners in Dete, a township situated within the Hwange National Park about 65km from Hwange town in Matabeleland North Province, say they have yet to physically obtain the new Zimbabwe Gold (ZWG) currency.
They report only seeing the new currency featured on television, in newspapers, and on social media platforms.
Onesimo Ushendibaba, the Chairperson of the Dete Business Community, told the <a href="https://www.chronicle.co.zw/dete-businesses-struggle-to-physically-access-new-zwg-currency/">Chronicle</a> that the shortage of ZWG in the area is exacerbated by the absence of banking facilities in the small township. Said Ushendibaba:
<blockquote>
I am aware that the new currency was introduced in April but as businesses, we are yet to have a customer who has used this currency in our shops, if so it may have been a once-off transaction.
People have to travel to Hwange to access banking facilities and since that is where we also get bigger supermarkets, they naturally will do their grocery shopping there, especially if it’s paydays.
</blockquote>
Onesimo Ushendibaba explained that due to Dete’s location within a major tourist area, most people in the community are employed in the tourism sector and have better access to foreign currencies, particularly the United States dollar.
Gloria Gumbo, a vendor at the local flea market, said she had only seen the ZWG currency when she travelled to Harare to place orders for her business. Said Gumbo:
<blockquote>
People come with US$ to buy wares at my shop, I am yet to sell in ZWG, not that I don’t want but because no one has this currency, maybe a few but they use it mainly to pay bills such as electricity and water.
</blockquote>
Launched on April 5th, 2024, the ZWG currency has maintained a relatively stable peg to the United States dollar, starting at an exchange rate of 13.56 ZWG per USD and rising only marginally to the current rate of 13.70 ZWG per USD.
Yesterday, the Zimbabwe Statistics Agency (ZIMSTAT) said that the month-on-month ZiG inflation rate for June 2024 was 0 per cent, meaning prices have remained constant on average between May and June.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Businesses, Residents In Dete Await Physical Access To ZWG Currency

ZANU PF Political Commissar Munyaradzi Machacha has warned party members who own businesses and are rejecting the Zimbabwe Gold (ZiG) that they face arrest.
This follows reports that a supermarket owned by one top ZANU PF official in Bulawayo was not accepting ZiG for some products.
Speaking in an interview with the <a href="https://newsday.co.zw/southerneye/local/article/200028349/zanu-pf-businesspeople-reject-zig">Southern Eye</a>, Machacha said ZANU PF-linked businesspeople who were rejecting the ZiG must be arrested to set an example. He said:
<blockquote>
For ZANU PF businesspeople, businessmen, I would say lead by example. If we are truly ZANU PF, we should work for the success of the ZIG and the success of government policies.
So we really, really must encourage discipline and ethical conduct from everyone, including ZANU PF members.
Anyone who is doing it is certainly fighting what the party and the leadership of the party are trying to build and they must be punished like anyone else.
</blockquote>
ZiG became the official currency of Zimbabwe on April 8, 2024. It is backed by US$575 million worth of hard assets, including foreign currencies and precious metals.
Unlike many other currencies, ZiG does not have formal subdivisions (such as cents). It is issued in whole units.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

ZANU PF Businesspeople Reject ZiG Currency

Retailers have pledged to approach banks to get ZiG coins and small-denomination notes to help resolve the shortage of small change, reported <a href="https://www.herald.co.zw/retailers-pledge-to-address-change-shortages/">The Herald</a>.
On Tuesday, Reserve Bank of Zimbabwe (RBZ) Governor, John Mushayavanhu, met wholesalers and retailers in Harare to discuss issues affecting the economy.
During the meeting, CZR president Denford Mutashu said the retail sector had embraced the ZiG more than any other sector in the economy but the dominance of the US dollar is negatively affecting them. He said:
<blockquote>
Unfortunately, at the procurement level, 80 per cent is US dollars and 20 per cent is ZiG, so that is a glitch in the market because it is affecting day-to-day procurement patterns of formal channel retailers and wholesalers… and it is the informal market, which is currently enjoying the benefits of having not formalised their business.
We are quite happy with this dialogue because the Governor agreed to meet retailers and wholesalers and that is actually in line with the President’s engagement and re-engagement dialogue.
On the issue of change that we are currently experiencing, as the Governor has highlighted, we are going to approach the banks to address this.
</blockquote>
Mushayavanhu acknowledged that the Reserve Bank had received reports of consumers failing to get change from shops. He said:
<blockquote>
We are getting complaints that people are coming and they buy something for US$1,50 and instead of you giving them 50 cents change, you are asking them to add a bottle of water, which they don’t need.
I did say yesterday when I met the transport operators, that as we speak right now, we have got ZiG55 million in circulation.
This is more than the amount that was in circulation when we had bond notes. We have issued ZiG1, ZiG2, ZiG5 coins and ZiG10 and ZiG20 notes.
The question I want to ask you is: ‘Have you gone to your bank and said I want a float in change,’ because my knowledge of supermarkets is that you should have a float.
Have you gone to your bank and said I want ZiG100 000 in ZiG1, ZiG2, ZiG5 and they said they don’t have it because I have evidence that they are sitting on ZiG coins for which there are no takers?
So, who is not telling the correct story there? Have we gone to the banks and they said they haven’t got it?
Let us know, we can intervene and say, which is your bank and will give your bank exactly the ZiG coins that you want.
</blockquote>
The issue of change has also affected the transport sector, with passengers on 50c routes forced to pay US$1 or being paired up with strangers who would have paid US$1 and have to buy snacks from street vendors.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Retailers Pledge To Deal With Change Shortages

President Emmerson Mnangagwa has said the Government worked on the Zimbabwe Gold (ZiG) currency for at least two years before its introduction.
ZiG was launched by the Reserve Bank of Zimbabwe’s new Governor John Mushayavanhu during his inaugural Monetary Policy Statement on April 5, 2024.
Speaking to Russian media outlets in St Petersburg, Russia, Mnangagwa said Zimbabwe has enough gold in its reserves to back the ZiG. He said (via <a href="https://www.sundaymail.co.zw/zig-wont-fail-says-president-weve-enough-gold-to-back-it">The Sunday Mai</a>l):
<blockquote>
The focus is on our currency, gold-backed, and we have worked for two years to have it. We have more than enough reserves to back the currency.
All along, we have been using other countries’ currencies and now we introduced a currency backed by gold, but we still have other currencies in circulation, and we are happy we have solid gold and solid currency backed by gold.
Before I introduced ZiG, we had researched for two years, and we realised we wanted a solid, structured gold reserve-backed currency.
We have more gold; I toured the reserves and saw the gold myself. Our economy is now based on solid fundamentals of the economy.
</blockquote>
ZiG has been the official currency of Zimbabwe since April 8, 2024. It is backed by foreign currencies, gold, and other precious metals.
Mnangagwa was in Russia for the 27th St Petersburg International Economic Forum at the invitation of the country’s leader, President Vladimir Putin.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

We’ve Adequate Gold Reserves To Back ZiG - Mnangagwa

The Reserve Bank of Zimbabwe (RBZ) has disbursed ZiG46 million in notes and coins to the banks, but only 30% of the cash has been released to the market, Finance, Economic Development and Investment Promotion deputy minister David Mnangagwa has said.
Responding to questions about the scarcity of ZiG at the inaugural Capital Markets Conference which ended yesterday in Nyanga, Mnangagwa said that most of the cash circulates in the informal sector, but the banks, which have the notes, only transact with the formal sector. Said Mnangagwa (via <a href="https://www.newsday.co.zw/local-news/article/200027834/only-30-zig-released-to-the-market">NewsDay</a>):
<blockquote>
I did raise concern with the governor about the issue around fear of money not circulating and, indeed, he showed us his dashboard of the amount of notes that have gone to the banks.
But, we went further and asked how much have the banks released to the markets and this is where the joke is.
They have only released 30% of the monies they have been given by the RBZ and what then happens after that is now outside of the RBZ’s control.
So, you find that most of the fiat money circulates in the informal sector, but the notes are with the banks who only transact with the formal sector. Maybe it’s going to be gradual.
</blockquote>
Last month, Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu said that the central bank released enough ZiG cash for use by the public in conducting low-value transactions and for change.
Mushayavanhu urged corporates and individuals to approach their banks and withdraw coins for transactional convenience.
Mnangagwa was unsure whether the country still had cashback facilities but urged retailers to go to the banks to get ZiG notes and coins. He said:
<blockquote>
I don’t know if our economy drivers have bank accounts that they need to go and withdraw coins. I think we have to assist each other to make sure that there’s circulation of these notes.
So, it is an issue that is, I think, dividing the whole market and we need to come up with innovative ways. I don’t know if the capital markets can help.
I’m not sure if they actually are concerned about the notes and the coins. Probably not so much, but this is a countrywide issue.
</blockquote>
The shortage of ZiG notes and coins in circulation is inconveniencing traders and transport operators, among others.
There are concerns that the shortage of notes and coins will work against the government’s efforts to promote the use of local currency and make de-dollarisation difficult.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

RBZ Released ZiG$46 Million In Cash, But Only 30% Circulates - Mnangagwa

The Reserve Bank of Zimbabwe (RBZ) has launched “Swipe for ZiG Cash” in partnership with Homelink to address the shortage of small change.
In a statement issued this Tuesday, 04 June, central bank Governor John Mushayavanhu said the transacting public should visit their nearest Homelink branch and swipe for ZiG cash using their local currency debit/credit cards with effect from Monday 10 June 2024. Reads the statement:
<blockquote>
The Reserve Bank of Zimbabwe is committed to ensuring sufficient local currency, ZiG circulation in the economy as necessary to support normal business transactions and economic activity.
Pursuant to the above and for the convenience of the transacting public, the Bank wishes to advise the public, of an arrangement with Homelink to widen access to ZiG cash, leveraging on its existing branch network.
The Bank particularly seeks to expand economy-wide availability of small change in the following denominations, ZiG1, ZiG2, ZiG5, ZiG10.
The Bank appeals to all individuals, commuters, public transport operators, retailers, informal traders and their associations, vendor associations and other key stakeholders which interface with the transacting public, to approach their nearest Homelink branch and swipe for ZiG cash using their local currency debit/credit cards with effect from Monday 10 June 2024.
The exchange of foreign currency cash for ZiG cash can also be made at these Homelink branches at the ruling interbank exchange rate.
This arrangement with Homelink is part of wider initiatives by the Bank to ensure the availability of adequate ZIG cash in the economy. Going forward, the initiative will be expanded to other bureau de changes.
The list of Homelink branches across the country is attached for ease of access.
</blockquote>
List of Homelink Branches
<ul>
<li>Bulawayo – Call Centre (Bulawayo), Federal Building 103a Federal centre, 10th and fort street</li>
<li>Bulawayo – Fife Street, Beverly Building 16 Beverly Place, Cnr Five Street and 10th Ave</li>
<li>Chitungwiza – Chitungwiza, Makoni shopping centre 32045 Unit G. Seke</li>
<li>Gweru – First Mutual Centre Gweru, Shop number 8a, First Mutual Centre, corner Fifth Street and R.G. Mugabe Way</li>
<li>Harare – FEPC, Hardwick House 72 Samora Machel Ave, Harare</li>
<li>Harare – Call Centre (Harare), Hardwick House 72 Samora Machel Ave, Harare</li>
<li>Harare – Machipisa, 5 Samuriwo Building, Machipisa</li>
<li>Harare – OK Kwame Nkruma, Kwame Nkrumah Avenue</li>
<li>Harare – Avondale, Shop 1, Shamrock Building 30 King George Rd</li>
<li>Harare – NocZim House Branch, 100 Leopold Takawira, NocZim House, Harare</li>
<li>Kwekwe – OK Kwekwe, R. Mugabe Way Kwekwe, Kwekwe</li>
<li>Mutare – Manica Chambers, 92 Manica Complex, Main Street and 2nd Avenue</li>
<li>Rusape – Panmart, 301 Manda Street and Chimurenga Street</li>
</ul>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

RBZ Partners Homelink To Distribute ZiG Notes And Coins

The Reserve Bank of Zimbabwe (RBZ) has ruled out introducing ZiG50 and ZiG200 to the market anytime soon over fears the bigger notes will fuel inflation.
Speaking during a Chamber of Mines of Zimbabwe 2024 annual conference held in Victoria Falls on Thursday, RBZ governor John Mushayavanhu said the central bank would rather introduce more of the smaller denominations to address the shortage of change. Said Mushayavanhu (via <a href="https://www.newsday.co.zw/local-news/article/200027606/rbz-holds-zig50-zig200-from-circulation">NewsDay</a>):
<blockquote>
Since we introduced the ZiG, the economy has continued to grow across all sectors and we have not seen any negative results or disruptions.
We have introduced most of the cash denominations that we said we were going to. We have got ZiG1, ZiG2, ZiG5, ZiG10 and ZiG20 in circulation now.
We are going to put more of the smaller denominations because we want to make sure that the problem of change is immediately alleviated.
We have been very shy when it comes to introducing bigger denominations because psychologically, these denominations are inflationary. We do not see a reason to introduce the ZiG50 or ZiG200.
We have them, we have printed them, but it will take a bit of time before we put them on the market.
</blockquote>
ZiG notes and coins remain scarce in the market because they are not readily available through banks. These shortages are hurting various sectors, including transport, supermarkets, and the informal market.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

RBZ Holds Onto ZiG50 And ZiG200 Notes

The severe scarcity of ZiG banknotes and coins in circulation can be attributed to the Reserve Bank of Zimbabwe’s (RBZ) reluctance to distribute the new currency en masse over concerns that releasing the notes and coins all at once could inadvertently fuel the growth of the parallel market, it has emerged.
The government launched the ZiG on 05 April 2024, in an attempt to stabilise the economy, which has been unstable for the past 25 years.
The gold-backed currency replaced the Zimbabwean dollar, the RTGS, which had lost three-quarters of its value in the year it was replaced.
The new ZiG banknotes and coins that came into circulation on 30 April are in denominations of between 1 and 200.
However, the ZiG physical cash remains in short supply and this has significantly impacted millions who depend on cash for their daily needs, including people working in the informal economy.
The situation has led to many Zimbabweans having to budget more for basics just to make it through the day.
Speaking at a breakfast meeting hosted by the Zimbabwe Economics Society in Harare, RBZ deputy governor Innocent Matshe said the central bank deliberately limited the amount of cash injected into the economy to starve the parallel market. He said (via <a href="https://www.newsday.co.zw/business/article/200027220/zim-applies-for-iso-code-for-zig">NewsDay</a>):
<blockquote>
Due to the situation in our country, where a parallel market drove approximately 80% of economic activities, it was crucial to ensure that we did not supply all the new currency at once. Therefore, we limited the amount of cash injected into the economy.
Although challenges persist, they will evolve. Most financial institutions have received sufficient small denominations of the currency to address these issues.
You may wonder, why issues persist. These issues are systemic but will be resolved as the currency becomes more widely available.
The stability of the exchange rate will reflect the true value of the economy and the purchasing power of the currency, boosting domestic demand and supporting industrialisation in trade.
</blockquote>
The ZiG will co-circulate with other foreign currencies in the economy. However, the US dollar, which accounts for over 80 of transactions, will remain legal tender.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

"ZiG Shortage A Strategy To Starve Parallel Market"

The government has deployed more than a dozen teams across the country to carry out this year’s first quarter gold mobilisation exercise to boost the mining of the yellow metal which is backing the recently introduced Zimbabwe Gold (ZiG) currency.
This comes after the country recorded a 1,9% drop in gold output in the first quarter of 2024 due to leakages.
Speaking at the first Gold Mobilisation workshop, Minister of Mines and Mining Development, Winston Chitando said that the mobilisation teams were tasked with encouraging small-scale miners to formalise their operations and sell their gold through official channels such as Fidelity Gold Refinery (FGR). Said Chitando (via <a href="https://www.newsday.co.zw/local-news/article/200027203/zig-faces-new-threatas-gold-output-plunges">NewsDay</a>):
<blockquote>
For 2024 from January to April, the gold deliveries to FGR (Fidelity Gold Refineries) sit at 8,4 tonnes against a target of 40 tonnes by the end of the year. In 2023 for the months of January to April a total of 8,57 tonnes were delivered, this represents a 1,9% decrease.
Mineral leakages deprive the government of much-needed revenue from taxes and royalties. By working together, we can ensure that every ounce of gold extracted within our borders contributes to the national good.
</blockquote>
Chitando said increased gold production will boost the gold reserves and strengthen the ZiG’s value. He said (via <a href="https://www.newzimbabwe.com/zimbabwe-to-boost-gold-production-for-new-gold-backed-zig-currency/">NewZimbabwe.com</a>):
<blockquote>
Recently our currency was anchored on gold hence the need to ensure that all gold trade be done through the formal channels and eventually find its way to Fidelity Gold Refinery, our sole gold exporter.
This proactive approach by the ministry demonstrates its commitment to promoting the use of ZiG as a stable and reliable currency backed by tangible assets like gold.
Through these mobilization efforts, the ministry seeks to create a sustainable and robust financial ecosystem that benefits both the government and the citizens of Zimbabwe.
</blockquote>
The first gold mobilisation exercise will be conducted in all the country’s mining provinces which are Masvingo, Mashonaland East, Matabeleland South, Matabeleland North, Mashonaland Central, Midlands, Manicaland and Mashonaland West.
Chitando also revealed that in the first four months of 2024, large-scale miners delivered 4,3 tonnes of gold to FGR compared to 3,4 tonnes in the same period of 2023, representing a 26% increase.
However, gold delivery from small-scale miners, who are the main contributors to the country’s gold output, fell by 23% in the first quarter. Said Chitando:
<blockquote>
For small-scale miners, the gold deliveries to FGR have decreased from 5,2 tonnes in 2023 to four tonnes in 2024, a 23% decrease.
The small-scale miners have contributed 48% of the gold delivered to FGR for the year 2024 as compared to the 60% contribution for the previous year, 2023.
Over the years since 2020, small-scale miners have been the major contributors to gold deliveries to FGR contributing more than 60%.
However, for the year 2024, the contribution by small-scale miners ranges between 42% and 53% which calls for investigations into the decline in gold deliveries.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Govt In Gold Production Mobilisation Drive To Stabilise ZiG

The Ministry of Primary and Secondary Education has commended schools for embracing the Zimbabwe Gold (ZiG) currency for school fees payment after there was some resistance to the new currency during the first week of the current 2024 second term.
Director of Communications and Advocacy in the Ministry, Taungana Ndoro, told <a href="https://www.sundaynews.co.zw/schools-comply-with-ministerial-directive/">The Sunday News</a> that parents and guardians should be allowed to pay the whole amount in ZiG at the interbank rate on the day that the transaction is made. He said:
<blockquote>
The Government has always been clear that no school is allowed to refuse ZiG which is our local currency. All schools, Government and non-governmental are supposed to accept it if a parent comes and wants to pay with that currency.
If their fees are paid in United States dollars they should accept the ZiG currency at the interbank rate on the day that the transaction is made.
ZiG is a legal tender in the country and no school is allowed to charge school fees in USD only or to compel parents to pay 50 per cent USD and 50 per cent ZiG. No.
</blockquote>
Ndoro admitted that some schools have been resisting the government directive to accept ZiG and were only accepting USD payments. Said Ndoro:
<blockquote>
Yes, there were several schools during the first week of opening schools that were refusing to take ZiG and were only taking USD and we issued a directive and had a massive publicity campaign regarding compliance.
What we have noticed is that the response has been very impressive. Parents can pay with ZiG. We have not had as many reports as when the schools opened.
</blockquote>
Ndoro also revealed that the Government and its developmental partners have started rolling out the schools’ feeding programme nationwide.
He said the initial target is to feed three million learners but the number of beneficiaries will likely increase as the year progresses.
Ndoro was speaking at Tjingababili Primary School in Mangwe District during a media tour focusing on the critical linkages between climate change, water, sanitation, hygiene and nutrition organised by UNICEF.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Schools Complied With Ministry Directive On ZiG Payments - Ndoro

Business leaders and economists have criticised the government’s move to manipulate exchange rates thereby reintroducing price controls for all goods to slow down inflation.
The annual inflation rate increased to 57.5% in April, up from the previous month’s 55.3%.
In a move aimed at regulating the pricing of goods, the government recently imposed the Statutory Instrument 81A of 2024 which removed the 10% premium on forex sales.
As a result, all sellers of goods are now compelled to use the interbank selling rate or risk being fined at least ZiG200 000 penalty.
The president of the Confederation of Zimbabwe Retailers (CZR), Denford Mutashu has since written to the Minister of Industry and Commerce, Mangaliso Ndlovu, expressing concern over the contents of Statutory Instrument 81A of 2024. The letter, seen by <a href="https://businesstimes.co.zw/disquiet-over-price-controls/">Business Times</a>, reads in part:
<blockquote>
We are writing to express our strong concerns regarding Statutory Instrument 81A of 2024. While we understand the intention behind this instrument we believe that the current framework is not workable and requires significant adjustments to ensure its feasibility.
Our concerns are centred around the maximum exchange rate, which does not reflect a cost recovery exchange rate given the current circumstances.
Specifically, banks are currently charging clients a rate around 5% above the selling rate. This week, the banks have been selling at a rate of around ZiG14.70:US$1.
The new intermediate money transfer tax (IMTT) statutory instrument announced by the minister has increased the IMTT for forex (FX) purchases on the Willing Buyer, Willing Seller (WBWS) from 1% to 2%.
This is in addition to the 1% charged by the Reserve Bank of Zimbabwe (RBZ), taking the total cost for WBWS purchases to 3%. These costs add up to an average of 8% above the RBZ selling rate.
Furthermore, FX is not available on demand, and any time lag between receiving ZIG and purchasing FX on WBWS can result in losses for traders due to ZIG rate devaluation.
To make this SI workable and possible for players to comply, we recommend that the bank selling rates must not exceed the RBZ selling rate and that FX purchases from the WBWS must be exempted from IMTT.
</blockquote>
Mutashu also urged authorities to remove the RBZ’s 1% admin fee for WBWS purchases and to allow an additional 2% above the WBWS selling rate to account for ZIG rate volatility if these measures are not implemented. He added:
<blockquote>
SI 81A of 2024 will not be workable, and it will lead to a cat-and-mouse game between the regulator and businesses. We urge you to consider our concerns and recommendations to ensure a feasible and effective framework.
</blockquote>
Kurai Matsheza, the president of the Confederation of Zimbabwe Industries (CZI), said:
<blockquote>
In economics, there’s a law of demand and supply hence the government should follow that for the exchange rate to stabilise. Anything outside that will affect the economy.
</blockquote>
Economist Vince Musewe pointed out that the government is repeating mistakes by reintroducing price controls, which could lead to shortages and smuggling. He said:
<blockquote>
You cannot police market sentiment. The market is a beast that can only be tamed by building trust and confidence.
Price controls always create alternative market shortages and increased smuggling. We are not learning from history.
</blockquote>
Another economist, Tony Hawkins, said the threats of arrests and fines “confirm that nothing has changed”. He said:
<blockquote>
Next comes the shifting of goalposts with new SIs and additional ways of calculating inflation.
In this case, we have a new twist — the conversion of an already out-of-date national budget into zigs which will give Treasury lots of opportunities to switch spending and raise stealth tax revenues.
The next stage, as is happening now is threats, arrests and fines all of which confirm that nothing has changed.
How can it be a free market if anyone who trades on a willing buyer-willing seller basis is breaking the law unless he trades at the manipulated RBZ rate?
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Price Control Reintroduction Draws Criticism from Business Leaders and Economists

Zimbabwe National Chamber of Commerce (ZNCC) chief executive officer, Chris Mugaga, said the reason businesses put a premium on the official exchange rate when setting prices was that there was no foreign currency readily available in the formal market.
In an interview with <a href="https://www.businessweekly.co.zw/no-mercy-for-violating-exchange-rate-treasury/">Business Weekly</a>, Mugaga said businesses are forced to source foreign currency from the black market because it is not available in the banks. He said:
<blockquote>
The reason why our constituency put premiums is that they have acknowledged that we cannot get (adequate) forex from the banks. If you go to the bank looking for forex you will not get it.
So, if you cannot get the forex from the banks, where else can you get it other than the black market?
Like it or not, the black market remains a major source of forex for most businesses.
</blockquote>
On Wednesday, Finance, Economic Development and Investment Promotion Minister, Mthuli Ncube, warned that businesses caught pricing their products or services using an exchange rate higher than the official rate risk severe penalties.
Responding to questions from legislators during a National Assembly sitting, Ncube said there is no longer any “basis” for shops to use any rate above the official rate after the government recently removed the legal provision allowing traders to put a 10 per cent margin above the ruling interbank exchange rate.
However, Mugaga argued that the stability of the ZiG currency counted for little as long as businesses struggled to secure foreign currency to import raw materials. He said:
<blockquote>
What the minister is saying does not define what is happening on the ground. What is happening is that if you go to the banks looking for foreign currency you are not able to get it.
If the minister wants a comprehensive approach, he must look at the whole supply and demand of forex.
If he considers only the stability of ZiG, he will be starting from the front end of the demand and supply chain.
</blockquote>
Some business executives say they are now allowed to price products at the exchange rate at which they would have purchased forex from their banks.
When contacted for comment by Business Weekly on the new position, Central Bank Governor John Mushayavanhu could only say “We will issue a statement to clarify.”
Zimbabwe’s economy is nearly 80 per cent dollarised and several businesses have also learnt to survive largely on their domestic foreign currency sales receipts, which they say remain inadequate to cover their needs.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Currency Scarcity Drives Premium Pricing, Says ZNCC CEO Chris Mugaga

The Government plans to extend a crackdown that’s targeting street currency traders to retailers (shops) to ensure goods and services are priced using only the official exchange rate of the new ZiG currency.
Responding to questions from legislators during a National Assembly sitting on Wednesday, Finance, Economic Development and Investment Promotion Minister, Mthuli Ncube, warned that businesses caught pricing their products or services using an exchange rate higher than the official rate risk severe penalties.
Ncube said there is no longer any “basis” for shops to use any rate above the official rate after the government recently removed the legal provision allowing traders to put a 10 per cent margin above the ruling interbank exchange rate. He said:
<blockquote>
We must protect our currency and keep it stable and discourage unnecessary speculation. The speculation is unjustified.
It is clear what the fundamentals are that drive value, that underpins the value of this currency and therefore it should be clear to everybody that this currency should be stable and an appropriate official exchange rate should be used for transaction purposes.
In our desire to protect that, Mr Speaker Sir, we are putting certain measures, certain sanctions on those who deviate from that objective.
First of all, for those who are managing retail or own retail organisations and sell goods to the public, we are insisting as a Government that they ought to use the willing buyer-willing seller price for foreign currency as the basis for pricing.
We have removed any basis to deviate officially from the official exchange rate, that 10 per cent exchange limit was causing deviation as an excuse for overpricing purposes.
So, from now on, we will make use of the willing buyer-willing seller pricing mechanism and any deviation will be sanctioned through a fine of no less than ZiG200 000 per offence.
So, those are really the measures we have put in place to deal with the pricing by retailers.
</blockquote>
The government gazetted Statutory Instrument 81A of 2024, Exchange Control (Amendment of Schedule to Exchange Control Act) Notice, 2024, last week.
S.I. 81A of 2024 scrapped the provision for a 10 per cent margin above the ruling exchange rate and also laid down the new requirement and the civil penalties that can be levied against defaulters.
Violation of the law now attracts a penalty of a minimum of ZiG200 000 per offence, and if the foreign currency taken in is higher in value, then the penalty equals that foreign currency.
According to <a href="https://www.businessweekly.co.zw/no-mercy-for-violating-exchange-rate-treasury/">Business Weekly</a>, traders and open market foreign currency dealers are pricing the local currency between ZiG17,5/US$1 and ZiG20/US$1.
According to the Reserve Bank of Zimbabwe (RBZ) website, the average interbank rate on 17 May 2024, was ZiG13.39/US$1.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Government To Extend ZiG Currency Crackdown To Shops

Zimbabwe is experiencing a serious cash shortage that was exacerbated by the introduction of a new currency, the Zimbabwe Gold (ZiG).
The shortage of cash is negatively affecting aggregate demand as the informal sector, which employs the majority of Zimbabweans, relies on cash.
The Reserve Bank of Zimbabwe (RBZ) started circulating ZiG notes and coins on 30 April, about three weeks after the ZiG replaced the Zimbabwe dollar, which had lost three-quarters of its value this year.
The cash crunch has hit various sectors including transport, supermarkets and the informal market, thereby disrupting business.
Speaking to <a href="https://www.newsday.co.zw/thestandard/business/article/200026796/cash-shortages-hit-zimbabwe">The Standard</a>, economist Gift Mugano, blamed the Central Bank’s “incompetence” for the cash shortage. He said:
<blockquote>
We do not have enough ZiG from the central bank. The size of the money supply is about ZiG90 million and the size of our economy is about ZiG20 billion.
So, the question is how does the government liquidate and expect to provide enough cash in the market when you have that small share of ZiG?
The central bank has not printed enough ZiG.
Last time I checked, they had printed small denominations and as a result, they have starved the market.
That’s a failure, so the bank must print enough ZiG currency and enough denominations for the market.
At this stage we should not be struggling to access ZiG just for change, it’s serious incompetence on behalf of the central bank.
</blockquote>
Mugano warned that the scarcity of the ZiG could lead to increased dollarisation. He said:
<blockquote>
Even the governor (John Mushayavanhu) is very clear in his monetary policy that he is pushing for banks to put certain liquidity into non-negotiable instruments so that they dry the market.
What he does not realise is that he is finalising dollarization, because if ZiG is not available, what is available is the US dollar.
So we are going to use foreign currency. He effectively brought small denominations and delayed the disbursement of large denominations.
</blockquote>
Another economist Prosper Chitambara, told The Standard that the shortage of cash could be a result of a deliberate approach by the RBZ to avoid introducing too much liquidity into the economy which could result in inflation. Said Chitambara:
<blockquote>
It could be a supply issue; the central bank did not print enough money.
Maybe they are trying to monitor the situation because you do not want to introduce too much liquidity in the economy; it can actually have a destabilising impact on the economy.
Of course, there is a strong demand for the ZiG, especially to facilitate change.
So obviously, we need to create that fine balance in terms of ensuring that there is enough supply of ZiG.
</blockquote>
Bankers Association of Zimbabwe chief executive officer Fanwell Mutogo said:
<blockquote>
Banks, typically order cash from the central bank based on the demand for cash they anticipate from their customers.
We are not sure which customers are affected.
Moreover, customers are encouraged to use digital means of transacting.
This is part of a broader push towards digitisation, which can help reduce the reliance on physical cash, improve efficiency, and potentially alleviate some of the issues related to cash availability.
</blockquote>
The ZiG is Zimbabwe’s sixth attempt to deliver a functioning local currency since 2008 when hyperinflation destroyed the Zimbabwe dollar (ZWD).
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Cash Shortages Hit Zimbabwe, Economists Blame Central Bank

Local businesses are struggling to obtain foreign currency from banks to fund the procurement of inputs they require for production, a development that may result in the total rejection of the country’s new currency, the Zimbabwe Gold (ZiG).
ZiG was launched on April 5, 2024, to replace the Zimbabwe dollar but the new currency has struggled to find willing takers with most market players preferring to deal in foreign currency, mostly US dollars.
Currently, ZiG cannot be used to buy fuel, an imported commodity that requires foreign currency to purchase.
As reported by <a href="https://www.businessweekly.co.zw/businesses-struggle-to-get-forex-for-inputs/">Business Weekly</a>, Confederation of Zimbabwe Retailers president Denford Mutashu this week said that during a meeting to share notes with manufacturers recently, the producers said they were struggling to get from the banks the forex they need to procure inputs. Said Mutashu:
<blockquote>
The manufacturers, also, if you listen to their plight, it is realistic. Some manufacturers indicated that they are sitting on more than ZiG130 million, which they do not know what to do with because suppliers of raw materials are also demanding USD.
Someone indicated to me this afternoon that they also communicated with their bankers wishing to purchase foreign currency to import raw materials, but there have not been any favourable responses from the banks.
So I think that this whole matter (ZiG acceptance) rests with the Reserve Bank and the financial services sector.
There has gotta be a way to capacitate banks, lubricate banks, and oil banks so that they have sufficient foreign currency for supporting productive sectors.
</blockquote>
According to Business Weekly, a source revealed that despite the government’s claims that those in need of foreign exchange (forex) could obtain it from the interbank market, the actual situation on the ground indicated otherwise. Said the source:
<blockquote>
Banks have told businesses in no uncertain terms that they have no forex. There are more buyers than sellers on the willing buyer-will-seller market.
</blockquote>
Banks say the market has largely been dependent on export surrenders, but most exporters are holding on to their foreign currency, which explains the prevailing tight US dollar liquidity situation.
Bankers Association of Zimbabwe president Lawrence Nyazema said “RBZ has started selling reasonable amounts to banks against submitted pipelines, (but) customers with ZiG loans are disqualified, according to the rules.”
He, however, noted that there have been some improvements in the supply of forex over the last couple of weeks.
Farai Mutambanengwe, an economist and the Small and Medium Enterprises Association of Zimbabwe chief executive said:
<blockquote>
I think there is a lot of confusion in the market. When it was initially pronounced, we were told it (ZiG) was backed, (including with US dollars), but now it turns out that you cannot get US dollars at the bank even if you have ZiG.
Also, those people who were in the foreign exchange queue, for their ZWL have been converted into Treasury Bills. When you then force people to accept ZiG it will not work. Some players are now stuck with the ZiG…
People will not accept ZiG because they do not understand what it is worth.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Industry Sitting On Millions Of ZiGs, Banks Don't Have Forex For Inputs

Zimbabwean academic, financial analyst, and economist, Gift Mugano, has warned that goods will disappear from supermarket shelves after the government introduced rules making it mandatory for businesses to use the fixed exchange rate.
On Thursday, 09 May, the Minister of Finance, Economic Development and Investment Promotion, Mthuli Ncube, gazetted Statutory Instrument 81A of 2024 which penalises individuals and companies charging prices above the prevailing official foreign exchange rate.
The official exchange rate in the economy is set daily by the Reserve Bank of Zimbabwe (RBZ).
Offending firms and individuals will be fined ZiG200 000, but if the foreign currency taken in is higher in value, then the penalty equals that foreign currency.
Furthermore, the 10 per cent premium that retailers were allowed on the official exchange rates between foreign currency and the ZiG has now been abolished.
Responding to the developments, Mugano said Statutory Instrument 81A of 2024 “will definitely kill the formal businesses”. He wrote on X (formerly Twitter):
<blockquote>
The New Amendments to the Exchange Control is a total disaster!
Goods will disappear from the formal sector and appear in the informal sector! Unfortunately, GOZ can’t regulate or enforce compliance in the informal sector because it’s gigantic &amp; stubborn.
This gives the informal sector latitude to set own informal rules and disregard government policies/regulations.
The informal sector has the flexibility to operate at competitive exchange rates/black market rates which will definitely kill the formal businesses.
The irony is that we have been on this road before and it didn’t work! GOZ must develop a culture of carrying out impact assessments of its policies and come up with improved policies.
The informal sector is a menace and fluid – we must apply critical thinking not emotions if we are to redirect the economy on the right path.
In my previous instalments, I proffered solutions which GOZ must consider to save the ZiG but authorities ignored the advice.
It is high time that we undertake a comprehensive assessment of the root causes of our economic problems. We must never be prescriptive.
At the moment I humbly suggest that authorities stop issuing press statements and statutory instruments because it is not taking us anywhere.
Let us undertake a 360-degree investigation of our economic crisis and come up with comprehensive solutions which must include political remedies!
Otherwise, we are going nowhere.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Penalising Companies For Charging Prices Above Official Forex Rate Will Kill Formal Businesses - Mugano

The Zimbabwe Government will penalise individuals and companies charging prices above the prevailing official foreign exchange rate.
The official exchange rate in the economy is set daily by the Reserve Bank of Zimbabwe (RBZ).
Offending firms and individuals will be fined ZiG200 000, but if the foreign currency taken in is higher in value, then the penalty equals that foreign currency.
Furthermore, the 10 per cent premium that retailers were allowed on the official exchange rates between foreign currency and the ZiG has now been abolished.
The changes were made through Statutory Instrument 81A of 2024, Exchange Control (Amendment of Schedule to Exchange Control Act) Notice, 2024, gazetted on Thursday, 09 May. Reads the Statutory Instrument:
<blockquote>
Exchange Control (Amendment of Schedule to Exchange Control Act) Notice, 2024
THE Minister of Finance, Economic Development and Investment Promotion, in consultation with His Excellency the President, in terms of section 11(2) of the Exchange Control Act [Chapter 22:05], hereby makes the following notice: —
Title
1. This notice may be cited as the Exchange Control (Amendment of Schedule to Exchange Control Act) Notice, 2024.
Substitution of Paragraph 2(12)
2. Paragraph 2 (“Power of Reserve Bank to issue civil penalty order”) of the Schedule (“Civil Penalty Orders”) to the Exchange Control Act [Chapter 9:23] is amended by the repeal of subparagraphs (12) and (13) and the substitution of the following subparagraphs —
“(12) A natural or legal person shall be guilty of a civil infringement if he or she, being a seller of goods or services, offers such goods or services at an exchange rate above the prevailing average interbank foreign currency selling rate published by the Reserve Bank of Zimbabwe.
(13) In the event of default in complying with subparagraph (12), the civil penalty shall provide for-
(a) a combination of-
(i) a fixed penalty of two hundred thousand ZiG or an amount equivalent to the value of the foreign currency charged for the goods or services in question (whichever is the greater amount); and
(ii) a cumulative penalty over a period not exceeding ninety days of five per centum of the outstanding amount of the fixed penalty for each day (beginning on the day after the service of a civil penalty order) that the fixed penalty or any outstanding amount thereof remains unpaid by the defaulter;
(b) the suspension of the operation of the civil penalty order for a period of 48 hours from the date of its issuance to enable the alleged defaulter to show cause to the designated officer why the order should not have been issued:
Provided that-
(i) if no such cause is shown within that period the order shall be deemed to have been issued with effect from the beginning of such period;
(ii) if within that period, good cause is shown why the order should not have been issued, the designated officer shall withdraw the order and make the appropriate notation of withdrawal in the civil penalty register.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

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