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Gibson Mhaka, Politics Hub 

THE Government’s decision to mandate the acceptance of the newly introduced Zimbabwe Gold (ZiG) currency by all ministries, departments, agencies (MDAs) and the private sector is a welcome development. 

This means ZiG will become the official medium of exchange for financial transactions, goods and service payments.

Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, recently announced this policy change, highlighting the Government’s commitment to promoting the ZiG currency.

Professor Mthuli Ncube

He said as the Government continues to configure the Public Finance Management System (PFMS) to facilitate revenue collection and payment for goods and services in local currency, all MDAs and the private sector must accept and recognise ZiG as the official currency for all financial transactions and payment for all goods and services.

The collective effort in embracing ZiG will contribute to the smooth transition towards a more stable economic environment, he said.

“We call upon all MDAs and the private sector, including retailers and service providers, to accept the ZiG in all financial transactions, including payments of salaries as well as for procurement,” said Prof Ncube.

“This collective effort will contribute to the smooth transition towards a more stable economic environment.

“Furthermore, unless there is specific legislation allowing charges or fees to be collected in USD only, all collections by the Government and the private sector shall be made in ZiG or any of the currencies in the multi-currency basket without insisting on a specific type of currency or indexing invoices to the USD,” he said.

 To stabilise the value of ZiG, the Government has already introduced a liberalised foreign exchange market where the exchange rate is freely determined by the banking system based on demand and supply.

The Reserve Bank of Zimbabwe (RBZ) has also joined hands with the Ministry of Information, Publicity and Broadcasting Services and other arms of the Government to roll out a massive countrywide campaign to enhance public awareness of the ZiG.

The recently introduced ZiG currency marks another chapter in Zimbabwe’s ongoing fight for economic stability.

Beyond its role in facilitating financial transactions, goods and service payments, a successful local currency like the ZiG can have a transformative impact. It can foster a stronger sense of community and empower residents by keeping wealth circulating locally.

Its importance draws from the fact that as a local currency, it does not only facilitates transactions but also embodies national identity and pride. 

It promotes self-reliance and economic independence.

Studies show that local currencies can be powerful drivers of community development. They foster economic resilience by keeping wealth circulating locally, promote social cohesion by encouraging local exchange,and even incentivise sustainable practices. 

By channelling resources towards local businesses and initiatives, these currencies empower residents to take charge of their economic future and build thriving, vibrant communities. The potential benefits of a domestic currency like the ZiG are becoming increasingly clear.

Also, using a local currency can provide multiple benefits when engaging in, or advising clients on, international trade, business, or realty.

A movement is gaining momentum across Africa to push for local currencies over the US dollar. Kenyan President William Ruto has become a prominent voice in this “currency revolution,” outlining compelling arguments and advocating for a shift towards local currencies.

His call to action, particularly the ambitious proposal for a single African currency, underscores the commitment of African leaders to unlock the continent’s vast economic potential and build a brighter future for all Africans.

This is because reliance on the dollar hinders efforts to strengthen economic ties within the continent. 

By embracing local currencies, African nations could dismantle trade barriers, thus fostering intra-African commerce and igniting economic growth and collaboration across the continent.

The adoption of local currencies allows traders to shield themselves from the adverse effects of exchange rate fluctuations, ensuring stability and predictability in their business operations.

For many years, the US dollar or king dollar has been the world’s dominant currency, leading many American businesses to assume that all foreign trade partners prefer to do business in USD.

Studies have also shown that African countries’ dependence on the dollar often limits their access to global financial markets. 

Local currencies could bolster financial inclusion, enabling businesses of all sizes to actively participate in regional trade. 

By reducing reliance on external currencies, African nations can empower themselves to manage their monetary policies more effectively, tailor regulations to domestic needs and nurture a more independent and resilient financial ecosystem.

Adding to the debate, there have been recurring protests from former French colonies regarding the continued use of the CFA franc, a currency established by France in the 1940s specifically for its African colonies.

Protesters gathered in several West African capitals to demand their countries abandon the CFA France in favour of a common African currency. 

Critics argue that the CFA’s peg to the euro, a currency controlled by the European Central Bank, hinders economic planning for developing nations in Francophone Africa. 

However, proponents counter that the CFA stabilises the currencies of Franc Zone member countries and facilitates trade between France and these nations.

The arguments for local currencies highlight their potential to address a major challenge faced by African countries. 

Sudden fluctuations in foreign currencies can significantly disrupt cross-border trade and erode profit margins. 

Local currencies, like the ZiG on the other hand, can offer stability and predictability, allowing businesses to operate with greater confidence.

The introduction of ZiG by the Second Republic signifies its commitment to unlocking the country’s economic potential and building a more prosperous future for all Zimbabweans.

In retrospect, the power of ZiG shouldn’t lie solely in the currency itself, but rather in the spirit of building a future that it ignited.