Justice Minister Ziyambi Ziyambi, addressing parliament, stressed the need to prioritise the Zig to bolster confidence in the national currency. Introduced in April last year, the Zig replaced the bond notes, which had become worthless due to soaring inflation.

Zimbabwean economist and Bullion Group founder Persistence Gwanyanya noted that despite initial fluctuations, the uptake of the Zig has been on the rise. “Since its introduction on April 5, 2024, we have seen increased circulation and acceptance of the Zig. The level of Dollarisation, which stood at approximately 85% when Zig was launched, has now dropped below 70%,” he explained.

However, concerns have emerged over the government’s efforts to legislate its use. Critics question why authorities are pushing new regulations if the currency's adoption has been positive. In response, Gwanyanya pointed out that legal backing is necessary for any national currency, as seen in South Africa, where the rand is exclusively recognised for local transactions. “While we cannot legislate the exclusive use of the Zig due to our multiple currency system, we can introduce regulations to give it preference in the economy,” he said.

Ziyambi also raised concerns over the black-market use of the US Dollar, warning that an abrupt ban could drive more transactions underground. Gwanyanya acknowledged these risks, highlighting how the US Dollar fosters economic informalisation and reduces tax revenues.

The government has set a target to phase out the multiple currency system by 2030, at which point a decision will be made on whether to adopt the Zig as Zimbabwe’s sole legal tender.

--ChannelAfrica--