I’m looking for ways to persuade Zimbabweans to love ZiG- says Mushayavanhu

Reserve Bank of Zimbabwe (RBZ) governor John Mushayavanhu says he is exploring new ways of boosting demand for the local currency Zimbabwe Gold (ZiG).

Speaking to the Zimbabwe Independent, he concurred with government to compel companies to pay 50% of corporate tax in ZiG, with the remainder in foreign currency.

In theory, policymakers predicted the strategy would fire up appetite for ZiG – indexed transactions and place the currency on a firm footing.

However, upheavals in the past few weeks — which forced authorities to devalue ZiG by 43% last Friday — exposed weak points in the central bank’s plans.

Apparently, critics are on record condemning the way the Finance Ministry and RBZ have been conducting their functions.

The monetary authorities have been accused of addressing the symptoms without working on the economic fundamentals.

Mushayavanhu stands accused of failing to instil public confidence in the local currency.

Most Zimbabweans have little confidence in the ZiG currency and its ability to ease the country’s chronic economic difficulties, a new Afrobarometer survey revealed .

From its inception, there were major warning signs that the currency was being rolled out too quickly, without addressing the structural issues that had caused Zimbabwe’s economic instability in the first place.

Confidence in the new currency and trust in its management is central to its success, economic analysts say, however from the outset, the ZiG’s introduction has been messy.

Few days ago, the central bank had to devalue the currency as inflation skyrocketed especially on the black market.

Zwnews