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Marshall Ndlela

ZIMBABWE is on the verge of a bold monetary move. Today, the nation will introduce a “structured currency”. Experts believe it will likely function as a basket currency, tethered to a collection of assets with inherent value. Gold, a mineral in which Zimbabwe boasts rich reserves, is a strong candidate for inclusion in this basket.

This approach aims to create a more stable currency by anchoring its worth to a diversified set of real-world commodities. Imagine a seesaw: if the value of one asset dips, the value of another in the basket might rise, offering some level of balance. This mechanism is designed to curb the wild fluctuations that have plagued the Zimbabwean dollar in recent times, a period where its value plummeted dramatically.

While structured currencies offer a path toward stability, the very existence of a national currency carries significant symbolic weight. A nation without its own currency relies on external forces to control its monetary policy, leaving it vulnerable to global economic shifts and limiting its ability to tailor economic responses to specific needs. Zimbabwe, with its own currency, gains the power to steer its economy in ways that directly benefit its citizens. 

The introduction of a national currency represents the country’s sovereignty, asserting independence in monetary matters. It signals that Zimbabwe  is no longer reliant on foreign currencies or external monetary policies. The structured currency becomes a tangible symbol of Zimbabwe’s self-determination and its ability to shape its economic destiny. It stands as a testament to the nation’s resilience and commitment to charting its own course, free from external constraints.

A currency serves as a tangible symbol of a nation. It depicts its landmarks, historical figures and cultural icons on banknotes and coins. These images become a constant reminder of the nation’s unique identity and path as they circulate throughout the country. Imagine Zimbabwean dollars featuring the majestic Victoria Falls, the captivating Great Zimbabwe Ruins, or portraits of revered figures like King Mzilikazi? With every transaction, these images would spark a connection to the nation’s heritage.

Abandoning the Zimbabwean dollar in 2009, during a period of hyperinflation that rendered it practically worthless, was a necessary but painful step. Reintroducing a stable national currency would mark a turning point, signifying Zimbabwe’s resilience in the face of immense economic hardship. It would be a tangible symbol of progress, a new chapter where Zimbabwe takes control of its economic destiny and builds a sound economy that benefits all its citizens.

Structured currencies are a relatively new concept, but some nations have experimented with similar models. The Hong  Kong dollar is pegged to a basket of currencies dominated by the US dollar. This approach has helped maintain Hong Kong’s currency stability and fuelled its economic growth. Bulgaria’s Lev was pegged to the German Deutschmark before adopting the Euro. This provided much-needed stability during Bulgaria’s transition to a market economy. 

The success of Zimbabwe’s structured currency will depend on the specific design of the basket, its management and the overall economic strategy. Transparency and clear communication will be key in building public trust. While the path to a stable and prosperous economy is long, a well-structured national currency can be a powerful symbol of Zimbabwe’s journey towards self-reliance. It can represent not just economic stability, but also the nation’s unique cultural identity and unwavering spirit. The reintroduction of a Zimbabwean dollar, backed by a sound economic strategy and a diversified basket of assets, would be a testament to the nation’s ability to overcome past challenges and build a brighter future.

*Marshall Ndlela is a Zimbabwean based in South Africa. He is a holder of a Master’s Degree in Finance and Accounting from the University Of Chichester, England. He can be contacted via [email protected].