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Zimbabwe's Ruling Party Defends New Gold-Backed Currency Against Critics

ZANU-PF Secretary for Information Chris Mutsvangwa has lashed out at economists who question the value and efficacy of Zimbabwe's newly introduced Zimbabwe Gold (ZiG) currency. He argues that the gold-backed currency aligns with the country's economic history and deserves public trust.

Rutendo Maraire

"Gold has always been our currency," Mutsvangwa asserted during a press conference. "Why the obsession with the US dollar, a more recent invention? Economists like Gift Mugano would have us believe the dollar is the ultimate solution, but we disagree."

Mugano and other economists have expressed skepticism about the ZiG's potential. "We're repeating the errors of the past," Mugano warns. "To solve our economic issues, we need increased production and a way to address the vast informal sector that operates by its own rules."

The ZiG's introduction comes as Zimbabwe grapples with high inflation and the instability of its previous Zim dollar (ZWL). Mutsvangwa urges citizens to "trust their president" and have faith in the new currency, arguing it represents a return to traditional economic principles.

He also blamed past currency instability on a lack of gold reserves, offering a historical narrative to support the gold-backed approach.

However, residents express concerns about the delayed circulation of the ZiG, leading to difficulties with transactions. "We expected immediate access to ZiG," one vendor stated, "but the lack of availability is hurting sales of small items."

Despite some skepticism, other economists hold a more optimistic view. Kudzai Mutisi believes the ZiG could stabilize the exchange rate and curb inflation. "The structured currency has the potential to bring much-needed stability after a long period of depreciation," he stated.

Reserve Bank of Zimbabwe Governor John Mushayavanhu, in his 2024 monetary policy statement, acknowledged recent market speculation and rising inflation as factors driving the ZiG's adoption.


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