Measures announced by Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mushayavanhu in his maiden monetary policy statement on Friday should go a long way in containing prices and reducing inflation, amid calls for the public to speak and think positively about the new currency as its value is determined by their perception.
Dr Mushayavanhu introduced a new currency, the ZiG that will be largely backed by the country’s gold reserves, foreign currency reserves and precious metals.
The notes and coins of the ZiG will start circulating on April 30 but the electronic banking systems should be operational soon and other systems by Friday at the latest.
Confederation of Zimbabwe Retailers president, Mr Denford Mutashu said their members had embraced the new currency and were working round the clock to reconfigure their prices in line with the RBZ pronouncements.
“As CZR we have embraced the new currency, the ZiG as announced by the RBZ, and one of the steps we have taken is to discontinue use of the old Zimbabwe dollar.
“During this transitional period, we are accepting the US dollar. It has been a busy weekend due to the reconfiguring of our systems and we hope we will complete the process to meet the timelines set by the RBZ,” he said.
A number of institutions began converting their systems last Friday with financial institutions and payment systems providers notifying their clients of suspension of transactions in the Zimbabwe dollar.
Here and there, there have been technical glitches but shops and banks were working flat out to solve the issue.
Yesterday, United Family International Church leader Prophet Emmanuel Makandiwa, told congregants during his church service in Harare that the nation should support the newly introduced ZiG currency.
“Enter into the business world with the mindset that people have money. Otherwise if you don’t do that it won’t work. lt’s like saying ZiG harishande ( it doesn’t work ),” said Makandiwa laughing.
He said it was crucial to speak and think positively about the new currency as its value is determined by the people’s perception.
“Do you know that once people say that it doesn’t work it might not work not because it wasn’t going to work but because they said it will not work.
“All that is needed is for people to believe and to trust and if people are to put their confidence even in something that doesn’t work, it will work.
“When an idea is put forth it is now up to the people to vote for that idea into its effectiveness. If we become negative and negative things turn out to be negative too. We have to agree,” said Prophet Makandiwa to at least 30 000 congregants that attended the church service yesterday.
To buttress his point, he gave an example of minerals and said it was people who voted gold into power for it to have the value it carries .
He gave another of the power of the US dollar, saying its power was derived from the Americans hence it’s important as Zimbabweans to adopt the same culture.
“So any piece of paper that is introduced and if we are to agree and we transfer value into any piece of paper it will work for the economy.
“It’s up to us the people. We agree that there is value in this thing then value is transferred,” said Makandiwa.
The preacher also quoted Mathew 23:16 where Jesus was talking about the gold in the temple and saying it is the temple that gives value to the gold and in a similar manner as Christians, they are the temple, they give value to any currency and things that they do.
With the huge conversion in progress by banks and mobile money platforms of all local currency accounts, all digital platforms have been unavailable since Friday except prepaid Mastercard transactions. But messages from banks suggest that they could be up and running in the new currency from as early as today.
Dr Mushayavanhu noted on Saturday that banks and payment system providers had made satisfactory progress in converting the Zimbabwe dollar balances into ZiG balances since announcement of the changover.
“The conversion process will continue for other economic sectors until Friday, 12 April, 2024. Thereafter, the RBZ expects that all the online payment platforms will be operating smoothly for all transactions in the economy,” he said in a statement.
Following the announcement of the monetary policy, President Mnangagwa gazetted Statutory Instrument 60 of 2024, which gave the transacting public a transitional period of up to 21 days to convert their Zimbabwe dollar notes and coins to ZiG. “Accordingly, the ZW$ notes and coins will continue to be used for transactional purposes at the ZiG: ZW$ conversion factor of 2498.7242 applicable on April 8 within the 21-day transitional period,” Dr Mushayavanhu said.
The new ZiG notes and coins will start circulating in the economy on April 30, to allow the RBZ to undertake an intensive educational and awareness campaign on the key security features of the ZiG notes and coins.
The campaign is expected to reach out to a wide spectrum of society consistent with the bank’s financial inclusion thrust.
“The Reserve Bank further advises the public that the issuance of new currency is always preceded by this important process. The Reserve Bank is taking all the necessary steps to ensure that the public is not prejudiced and there is value preservation and transactional convenience during this transitional period,” said Dr Mushayavanhu.
Economist Persistence Gwanyanya urged Zimbabweans to be optimistic.
“For now, all I can say is it is not advisable to win by arguments, but results. Let us see how ZiG performs. But personally, I am more confident and hopeful about the effectiveness of ZiG to solve our currency challenges. Stability will definitely support the continued growth of Zimbabwe’s economy.’’ he said
Ms Tatenda Dzumbunu of Tafara said she was optimistic that the new measures would help in containing prices of basic commodities.
“I hope the new currency will enable the country to start on a new page especially in containing the rampant price increases we have been experiencing,” she said
Prince Tamburayi of Mufakose expressed confidence that the measures announced would address the plight of the general public.
“I am optimistic that the measures, including the new currency, will address the plight of the ordinary person especially prices of basic commodities which have risen beyond the reach of many this year,” he said.
Madzibaba Obey Mapuranga of Vapostori and MaZion for ED welcomed the measures and urged the nation to rally behind the MPS.
“The leaders of Vapostori and Mazion for ED have already activated their internal communication protocols to announce their divine endorsement on the ZIG,” he said.
“Vapostori and MaZion are playing a pivotal role to pray for and encourage the nation to put all hands on the deck to recover and resolve all recent and present sanctions-induced economic hardships. We need to clear the fog of criminals who accelerate inflation through parallel markets.
“Surely we applaud the RBZ Governor for taking this promising measure and also needs the support of every citizen not sabotage.”
Most business operators were yesterday still transacting exclusively in US dollars as financial institutions and mobile money platforms continued with the conversion process of the Zimdollar to the ZiG.
Business was low in supermarkets visited by The Herald in Harare’s CBD with till operators at Pick n Pay along Sam Nujoma Street, and OK Mart in Hillside saying business was lower than usual.
“We are not serving as many people as we usually do, which could be due to the fact that electronic payments are down. This is what most customers use here,” the operator who declined to be named said.
Other economic commentators felt that the reduction in business over the weekend was an indication that more people, than the suggested 20 percent, conducted business in local currency.
“If it was 80 percent USD as suggested, how come business is low.
Others urged the central bank to ensure a smoother transition process to avoid current inconveniences.
