Rédaction Africa Links 24 with The Observer
Published on 2024-04-18 16:08:27
John Mushayavanhu, the newly appointed governor of the Reserve Bank of Zimbabwe, made headlines when he displayed new banknotes of the country’s currency to reporters in Harare. The image of Mushayavanhu showcasing the new currency was captured and circulated widely, with the caption highlighting his role and the significance of the event.
The introduction of the gold-backed currency, known as Zimbabwe Gold or ZiG, was met with mixed reactions from the public. While officials touted the strength and potential of the new currency, street vendors like Chamunorwa Musengi remained skeptical. Musengi expressed doubts about the sustainability of ZiG, drawing parallels to the previous introduction of bond notes which eventually lost value on the market.
Despite the initial electronic trading of ZiG at 13.41 to the US dollar, the black market exchange rate was much higher at around 20. This discrepancy raised concerns about the future stability of the currency, especially in a country where economic challenges have been prevalent for years. The anticipation for physical notes and coins of ZiG to be released was palpable among individuals like Samson Kabwe, who saw the new currency as a solution to the scarcity of smaller denominations for daily transactions.
However, skeptics like economics professor Gift Mugano questioned the sustainability and success of ZiG. Citing past failures with the introduction of bond notes, Mugano highlighted the importance of sustained production and building confidence in the financial system to ensure the stability of the new currency. Despite these doubts, Governor Mushayavanhu remained optimistic about ZiG’s prospects, emphasizing its backing by reserves of gold and other minerals worth millions of dollars.
Mushayavanhu outlined a gradual plan to increase the usage of the local currency, aiming to restore its value and revive the economy. He envisioned a future where the Zimbabwean currency would regain prominence alongside foreign currencies in daily transactions. However, the governor’s confidence contrasted with the skepticism expressed on social media, where many users and businesses were hesitant to accept the outgoing Zimbabwe currency.
As the debate over the effectiveness and sustainability of ZiG continued, the future of Zimbabwe’s currency remained uncertain. Only time will tell whether the gold-backed currency will fulfill its promise of stability and economic revival in a country grappling with longstanding financial challenges.
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