ZIMBABWE’S major predicament is its currency sovereignty ego with government clutching on to a failing local currency at all costs thereby leading the country to a perpetual economic crisis, it has been revealed.
Development practitioner, economic commentator and human rights activist Nkanyezi Ndlovu said the country’s major problem was on currency issues attached to the sovereignty of the country.
Ndlovu, who is also the spokesperson of the Tsholotsho Community Parliament said this during a virtual discussion organised by Bubi Community Parliament on Sunday returned from South Africa recently after 10 years to pursue development work and human rights advocacy.
“As a fanatic of economics, I can safely say our major and worst predicament is currency sovereignty. The reason why right now we are using the Zimbabwe Gold currency while we know that it is a failing currency is simple because of the issue of sovereignty, we want to maintain our sovereignty,” Ndlovu said.
“Even the Minister of Finance, and the Reserve Bank of Zimbabwe know that the independent economists have said that the best that Zimbabwe can do to solve our financial predicaments is to adopt the United States dollar full time or the South African rand full time.
“This tells you that currency sovereignty is what is keeping us with the ZiG or whatever currency we have. We just want to maintain our State sovereignty, whether it benefits us as a country is a story for another day.”
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Ndlovu said it was prudent for the country to budget in US dollars, arguing that budgeting in ZiG was difficult to follow up or monitor as its value tumbled time and again.
The ZiG, Zimbabwe’s sixth attempt to introduce a stable currency in 15 years, has been losing value since it debuted in April following the demonetisation of the Zimdollar this year.
Renowned lawyer, Thabani Mpofu recently said the ZiG was operationalised by the promulgation of the Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act and Issue of Zimbabwe Gold Notes and Coins) Regulations, 2024, which lapsed after six months.
But government has since denied the claim, saying the ZiG still remains legal tender.
“The Reserve Bank of Zimbabwe wishes to advise the public and all stakeholders that there is no gap at law regarding the Zimbabwe Gold currency. The Zimbabwe Gold currency, (ZiG) was established through Presidential Powers (Temporary Measures) proclaimed under SI [Statutory Instrument] 60 of 2024, which constitutes a one-time Act of currency reform,” the central bank said on Monday.
“Currency reform measures by their nature do not lapse simply because the instrument that introduced the reforms has lapsed. The lapsing of the Presidential Temporary Powers that established the currency does not, therefore, create a gap in the law. Legally, currency reform measures are only revoked by another legal instrument.
“Meanwhile, it should be noted that The Finance Act which has since been gazetted into law, simply declares the provisions of SI 60 of 2024 and is not meant to validate them. Thus, ZiG remains the country’s legal tender and the Reserve Bank will continue to consolidate its use and stability.”
President Emmerson Mnangagwa has since signed into law legislation that supports the introduction of the ZiG.
The Finance Act amended the principal legislation to accommodate the introduction of the ZiG with notes and coins deemed to have been prescribed by the Minister in terms of section 44D(2) of the principal Act.
The Bill had passed through the Senate about two weeks ago.
During the launch of the ZiG in April, RBZ governor John Mushayavanhu said the currency would be in high demand as companies scrounge for it to pay quarterly taxes in June.