De facto Currency Or Change?

As ZiG currency tumbles….

By Shingirai Vambe

The introduction of the new Zimbabwe Gold (ZiG) has seriously affected the day-to-day smooth running of business as citizens loose their hard earned money in transacting and commuting to and from work as they struggle with change.

The Reserve Bank of Zimbabwe later called in the continuation of the previous bond/RTGS currency into the market, after the April 30 deadline. he call was a mitigatory measure as there is hunger and thirsty for the new currency which hasn’t exchanged hands as yet with a few coins, 10 and 20 ZiG only circulating in the market, the idea being to fight inflation.

Influx of money into the market has earlier caused inflation through plastic and electronic transfers by money changers who will be in search of the green back.

Zimbabwe Republic Police has arrested over 200 money changers, a move former legislator and minister of finance and economic development, Tendai Biti has described as a wild goose chase.

Biti said exchanging local currency and US dollars is legal as both have been declared legal tender by the law. he said all those arrested committed no crime.

The Zimbabwe Government said there was high indiscipline in the market with forex dealers changing and increasing exchange rate in the market, making it difficult for the local currency to stabilise and be used as the main currency across the market, however, the argument by scholars and citizens was the inability by ZiG to buy fuel, legal tender for customs duty and passports.

Civil Servants continue to get their salaries in US dollars and ZiG however not enough to pay rentals, school fees and other basic necessities like medication which require US dollars. citizens would then exchange their ZiG for USD to atleast cushion their monthly requirements while others will be in search of the local currency for other transactions.

The commuting public has however been put in a fix, with the only option other than being given snacks and drinks as change, to and from work, they have been given return tickets and or voucher, as their change.

The Zim price check has declared, it is illegal and they are being used as a de facto currency.

However, with the shortage of ZiG in the market, coupons and change vouchers have made life easier for many who are forced to pay US$1 to a destination that cost less than that amount or US$0.50c.

In his introduction of the Bond Note, former Governor, John Mangudya said it was meant for change and it was later introduced and the Zimbabwe currency, forced to and for citizens to use as legal tender as they get their salaries in the same currency. the change of salary denomination from USD to Bond/RTGS made life difficult and easy for few individuals and big wigs who were/ are exchanging it for the US dollars.

The Government has declared war against the market force, manufacturers and retailers are forced to trade at a prescribed rate of ZiG $14 : USD$1 which has resulted in changes of the prices of goods and services in the supermarkets and other shops as the RBZ has failed to sufficiently and adequately provide US dollars for those who import various goods from out of the country.

According to statistics, the USD still dominate the market with a rough estimation of having over a billion dollars circulating and exchanging hands in Zimbabwe. Economic analysts have pegged the current parallel inflation rate of over 2000 % while the official government rate is at 57.5%.

Proffesor Gift Mugano told the Post On Sunday that at this present moment, the Government has no power to control the market, as long as there is lack of confidence and trust.

Legal Practitioner and Former Legislator for Harare East, Fadzai Mahere commented on X that citizens trust the de facto currency more that the ZiG with confidence and trust that they will be able to come and transact again in the same shop or supermarket.