Products such as petrol and diesel will soon be sold in the recently introduced ZiG currency as transactions shift from being largely US dollar-denominated to local currency, the Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mushayavanhu has said.
In addition, the RBZ Governor warned the few companies that are not accepting the ZiG currency, that a time will come when they will need the local currency to settle their tax obligations.
This comes as the ZiG continues to inspire confidence across all markets as the legal tender of choice, following its introduction early last month, with notes and coins having started circulating on Tuesday.
In an interview after a closed-door meeting with Vice President Kembo Mohadi at his Munhumutapa Offices yesterday, Dr Mushayavanhu said as the year progresses, more products and services would be sold in the ZiG.
Thus, he cautioned businesses from selling exclusively in US dollars, as it would prove detrimental to their operations going forward.
“Currently, we are operating in an environment where 80 percent of the transactions are in US dollars and 20 percent in ZiG, so we are going to gradually allow a situation where we move from 80-20 to 70-30 to 60-40 to 50-50 as we go along and move towards 2030.
“As we do that more and more, products will be sold in the local currency, but beyond that, I want to say to those people refusing to sell their products in ZiG that they will find themselves in a situation where they will be hunting for this ZiG but will not be able to find them.
“If you recall Government said that in the June QPD (Quarterly Payment Date), they want 50 percent of taxes to be paid in ZiG so if you are a taxpayer and you are selling all your goods in US dollars, where are you going to get the ZiG to pay the tax? And when you then want to buy it from the market, it will be expensive,” he said.
“So, I am just warning them, if I were a fuel dealer I would sell some of my fuel in ZiG now so that I have enough money to pay tax when it falls due.”
Dr Mushayavanhu said the new currency had inspired confidence among Zimbabweans and business owners, especially following the introduction of notes and coins into the market.
“The new structured ZiG has been widely accepted by the market, if you recall on April 5, we had phase 1 of the introduction of ZiG, which involved the conversion of bank balances into ZiG, that was successfully done.
“We then moved to the second stage, which was educating the masses on the features of the ZiG notes and coins, and that went on until April 29. On April 30 we launched ZiG notes and coins, we introduced 1 ZiG, 2 ZiG, 5 ZiG in coins and 10 ZiG in notes and that has been widely accepted by the market. They are using it. That has alleviated the problem of change. We had situations where people were being told there is no change in a kombi but now, if you give them US$1, you get your 7 ZiG change, so we have solved the problem of change in the market,” he said.
Quizzed further on businesses selling products and services exclusively in US dollars, the Governor said it was “illegal”.
If business owners do not comply, he said, the Central Bank would move in to penalise them.
“Well, that is not allowed, that is illegal but we have also done our rounds, the majority of the retailers are selling in ZiG and US$ because we are in a multi-currency arrangement and we have also been monitoring the exchange rate that these retailers are using.
“Most are complying and those that are not complying have been cautioned by FIU (Financial Intelligence Unit) and, if they continue doing that, they stand to be fined or even have their accounts frozen,” he said.
Dr Mushayavanhu said the parallel market cannot sustain its operations as the ZiG was proving to be a strong and stable currency by the day.
“The black market will not come again because ZiG is a stable currency backed by gold, precious metals, and the foreign exchange balances that we have. For every ZiG that we have, there is an equivalent if not more cover in the form of reserves, so there is no reason why anyone would go and sell their ZiG and get a value which is less than the reserves that are backing that currency.
“If you do that you are just being cheated by these unscrupulous people,” he said.
VP Mohadi said he had directed the Governor to protect the currency’s stability as it would resultantly inspire confidence among Zimbabweans.
“So he was telling me that we seem to be on track, things are going smoothly and I was saying to him, let’s maintain that and guard against anything that is going to disrupt our currency.
“Let us speak good of our currency, let the people speak well about our currency, the party (Zanu PF) as well should also speak well about our currency. We should propagate that information to our people so that the people use our currency and then we develop a trust for our currency, that is what we were discussing,” he said.
VP Mohadi said Dr Mushayavanhu had apprised him well in terms of how the ZiG was performing since it was introduced.
“He came up with quite several measures, among them being the introduction of the ZiG, he was just briefing me on how far they have gone on the issue of the currency,” he said.
