SO, we finally have it, the Zimbabwe Gold currency or ZiG. The gold standard. The new currency where our owners performed some good old surgery on the Zimbabwe dollar (ZWL) by looping off some zeroes, some division and added the word gold to the mix and walla, new money!
Exactly how is this new money different from the inflation-ravaged ZWL currency that it replaced? Not by much, it seems. Because, much like the money it replaced, our owners do not want businesses to use the Zimbabwe Gold to pay tax.
Yes, Muck will yak about ZiG, again. He knows a stitch up when he sees one. It is an odd curiosity, that the authorities prefer that businesses use the hated America’s currency to pay at least 50% of Caesar’s dues.
Also, the ZiG is of no use for motorists, who still need to use other currency without the name Zimbabwe in it to pay for their petrol and diesel.
The RBZ did not help matters by releasing a statement this week saying the current US dollar denominated fuel pricing regime shall remain in place while trying to persuade locals to embrace the new currency.
“The current pricing mechanism in the fuel sector will remain in place until otherwise reviewed. As Reserve Bank and government work towards wider use of ZiG, the fuel sector will be encouraged to accept ZiG for fuel purchases.”
What use is a currency if it cannot perform a basic function of purchasing goods and services in the country of issue? It is very informative to the market that government has maintained fuel prices in USD even after the launch of the so-called gold-backed new currency.
The RBZ will ‘encourage’ businesses to accept ZiGs? Phew.
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Muck opines that the Zimbabwe Gold will just become another pile of wasted paper, money and effort. Despite being launched last week, the notes for the new currency will only be available nearly four weeks later.
So, the market has been conditioned to operate without the new currency circulating.
When it eventually enters circulation, who will want to use it?
Because it is clear that those who created the ZiG do not want it. So why should they foist it on the rest of us? Muck is so tired of government and the central bank’s muddled thinking.
All eyes on Mbare
Amid all the discussion about new currency and the rest, one key pillar has been missing from this: Mbare. It is no secret that the Mbare market determines the success or failure of any currency in this country.
All it takes is ‘Mbare haiziri kuda nezvemari nyuwani’ (Mbare wants nothing to do with the new currency) for things to fall apart. We have experienced it before. Mbare decides, which notes should circulate and the ones that should be dumped. While the ZW$100 note still has a lifespan of over two weeks, Mbare decided last week that it was no longer viable, and the market followed suit.
This week, the normally reticent Consumer Protection Commission, along with the police and the Financial Intelligence Unit allegedly launched a blitz on businesses refusing to accept the Zimdollar.
The blitz is a waste of time. Where are the businesses supposed to sell the worthless money if Mbare is no longer accepting it? The government does not want it, and the traders fear sanctions if they take piles of the money to the bank.
So, what gives?
No vote for ZiG
Staying on the ZiG, at a post-2024 Monetary Policy & Outlook Conference this week co-hosted by Muck’s favourite weekly read, businessman Nigel Chanakira asked attendees to show by a raise of hands, which currency they preferred between the US dollar and ZiG. You guessed it: no one voted for ZiG. This does not bode well with the new currency. The Zimbabwe Gold is less than a week old and already no one wants it.
It is like a new bride discovering her newlywed husband preferred Becky with the good hair down the road all along despite spending millions on a fancy wedding.
“What is the role of a currency in an economy? How do we produce goods and services and how do we measure the volume of those goods and services and compete in a global economy?” Chanakira asked.
“The government has no interest whatsoever in the local currency and I think the conversations in the monetary policy should really be between the RBZ and the Ministry of Finance. Those are the two people that should be having these conferences,” noted Oxlink Capital chief executive officer, Brains Muchemwa at the same event. “The RBZ on this side and Treasury on that side, and the RBZ trying to convince the Ministry of Finance that guys you cannot be asking us to issue a currency that you do not want to support.
“The currency is not supported by the central bank as many people would think, that’s not the case and that’s why for many years everything that they have tried has failed because the currency is supported by its issuer and in this instance, its issuer is the government of Zimbabwe.” Ok, Muck is done with this.
No tears for the Bit(i)
M
uck has long ceased to be surprised by events in the Chinhu Changu Chete (CCC) tent, but reports this week that ‘I am the best finance minister Zimbabwe ever had’ Tendai Biti has reportedly quit politics to go on a soul-searching break took him by surprise.
“Everyone has a constitutional right of controlling his own affairs, at the present moment and time as Tendai Biti, I have taken a time out in certain spaces and political spaces,” he said.
It must be painful to not be wanted in any kind of space. Who would want him?
His history suggests someone who wants power or to be at the centre of power all the time.
In 2014, Biti and his cohorts attempted to suspend Morgan Tsvangirai from the party he had led from its founding. Tsvangirai responded by expelling the rebellious lot, accusing Biti of being an opportunist.
"He (Biti) deceived us all. The man doesn't believe in anything, except his power," Tsvangirai said at the time.
CCC one time leader Nelson Chamisa eased him out of frontline politics at the earliest opportunity. On February 18 this year, he suffered the humiliation of being booed at a funeral of a CCC activist who he was supposedly close to. Muck thinks it must be maddening for Biti to find out the hard way that he had no political currency to speak of.
