HARARE– Zimbabwe’s cabinet has approved a comprehensive plan to transition from the US dollar to the country’s gold-backed currency, the Zimbabwe Gold (ZiG), in economic transactions.
The roadmap for this shift will be detailed by Finance Minister Mthuli Ncube.
“On modalities to operationalize the ZiG currency as legal tender for use in the economy, a de-dollarization roadmap is now in place,” Information Minister Jenfan Muswere announced at a post-cabinet briefing in Harare on Tuesday. He mentioned that the timeline for implementation would be presented by Minister Ncube but did not specify when this announcement would occur. The Treasury has not provided immediate comments on the matter.
For the past 15 years, Zimbabwe has heavily relied on the US dollar, which currently constitutes about 70% of all economic transactions, according to central bank data. When the gold-backed ZiG was launched in April, the dollar was used in 85% of transactions.
President Emmerson Mnangagwa has indicated that the ZiG might become the sole currency by 2026, ahead of the initial target year of 2030, a move that has garnered support from the banking sector.
In the interim, authorities are planning to increase penalties for those involved in “unjust price hikes, manipulation of the ZiG currency, smuggling, and all forms of unfair trade practices” to encourage the adoption of the ZiG, Muswere stated. The fines will be raised from a minimum of $200 to a maximum of $5,000 or the equivalent in ZiG.
Source: (Bloomberg)
