President Emmerson Mnangagwa has unveiled an ambitious plan to phase out the US dollar and establish the Zimbabwe Gold (ZiG) as Zimbabwe’s sole currency.
Speaking in Mutare on Thursday, Mnangagwa emphasized the need for economic self-sufficiency, warning against the dangers of relying on foreign currencies.
“We can’t continue to use someone else’s currency; it’s like being in a marriage where one partner doesn’t love the other,” Mnangagwa remarked. “Biden doesn’t love us, so we can’t keep using his money. What if one day they decide to sabotage us and we’re left with no choice? That’s why we now have the ZiG.”
The President’s announcement comes amid ongoing efforts to stabilize Zimbabwe’s economy, which has faced currency instability and hyperinflation for decades. On April 5th, the country introduced the ZiG, a gold-backed currency, as part of these efforts.
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However, economist Professor Gift Mugano has urged caution, highlighting the need for careful planning and consideration before fully transitioning to the new currency. “The introduction of a local currency requires careful planning and consideration of economic factors,” Mugano stated. “We must establish the minimum requirements for the introduction of a new currency if we want our currency to succeed.”
Mugano emphasized the importance of meeting basic economic prerequisites, such as achieving a current account surplus, fiscal consolidation, and a productive economy. He also stressed the need for confidence-building measures, nationwide consultations, and evidence-based policies to support the introduction of the ZiG.
“The sudden introduction of a new currency could lead to market disarray and erosion of trust in government policies,” Mugano warned. “The government must develop a culture of seeing through its policies to the expiration date before making conflicting statements.”
Reflecting on Zimbabwe’s history with currency changes, Mugano pointed out that the adoption of the US dollar in 2009 was a response to market forces, while the introduction of bond notes in 2019 faced significant resistance. “In February 2009, the government adopted the USD as the main currency, and in June 2019, the government introduced bond notes. We must learn from these experiences and develop a well-thought-out plan for the introduction of the ZiG,” he added.
As Zimbabwe moves forward with its plans to adopt the ZiG, the nation watches closely to see if this new currency can bring the stability and economic independence that Mnangagwa envisions. The success of this bold initiative will depend on meticulous planning, economic reform, and the ability to inspire confidence both domestically and internationally.
