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New currency: Mthuli summoned



PARLIAMENT has summoned Finance minister Mthuli Ncube to appear before lawmakers and issue a ministerial statement on the newly introduced ZiG currency.


The minister must explain how the currency will be sustainable in the wake of the crisis it has already plunged the country into since its launch last week.

Marondera MP Caston Matewu rose on a point of national interest on Tuesday to raise concern over the crisis caused by the Zig currency.

“On the 5th of April 2024, that is last Friday, the Reserve Bank Governor, Dr John Mushayavanhu issued the Monetary Policy Statement in terms of the Reserve Bank Act, [Chapter 22:15] which was followed by the Presidential Powers and Temporary Measures, [S.I. 60 of 2024].

“We expect the minister of Finance, Economic Development and Investment Promotion to come to this House and explain to us how the new currency is going to work. We owe it to the people, whether we are also going to amend the Finance Act which we voted for in December of 2023 because if the new currency is going to work, the common denominator must be confidence.

“We must be confident that it will work, the people of this country, the region, and the international community must be confident in the new currency. However, confidence will only come if the government is confident in our currency,” he said.

The legislator added that the nation needs to know if the Finance Act which put everything in US dollar terms with respect to government services like passport fees, fuel and every service that the government offers, must then follow suit and be accessible in Zimbabwe Gold (ZiG).

“Otherwise this will remain a damn spat and it will not work. So, we expect the minister of Finance to come to this House and amend the Finance Act to ensure that we can now pay for anything in central government using ZiG, otherwise we are wasting our time,” he said.
Speaker of Parliament Jacob Mudenda ruled that Ncube must present a ministerial statement on ZiG.

“Your request is accepted and will ask the Honourable Minister to present a ministerial statement to explain so that after his explanation, as representatives of the people, you will be able then to go back and explain equally, in equal measure, to the people you represent,” he said.

On Wednesday, Norton MP Richard Tsvangirai again raised the issue.

“My question is in connection with the ministry of Finance, Economic Development and Investment Promotion. What assurance can the minister give this House and the nation at large that the new currency [ZiG] will succeed, given the history of excessive printing of money at the central bank and the confidence deficit that we have in the market?” he asked.
Mudenda said the matter would be settled when Ncube presents the ministerial statement.

“That question will arise once the ministerial statement is tabled. Every member of Parliament will have time to ask such questions in that context,” he said.

The introduction of the new ZiG currency has unleashed chaos in the market, with the poor and vulnerable locked out of the financial system since last Friday.

Ordinary people using RTGS, bond notes and EcoCash were during the weekend were unable to transact, meaning they could not buy basics for daily sustenance.

New Reserve Bank of Zimbabwe governor John Mushayavanhu said banks would transition in a few days, but the authorities now say it may take up to the end of the month.

While Econet says the EcoCash mobile money platform has now been reconfigured to handle ZiG, thus completing the conversion process, transactions in RTGS and bond notes are still not possible.

Even with EcoCash, people are still wary about exchange rates and value, worried about losing out through arbitrage.

Zimbabwe has a labyrinth of local currencies operating in a complex and chaotic system and fears are that this creates huge room for arbitrage. Banks are still struggling to reconfigure their systems.

The new currency has triggered panic on the market as some informal retailers immediately began rejecting bond notes or inflated prices. Public transport operators are now charging US$1 per local commuter trip, taking advantage of the chaos.

The new currency has been greeted with scepticism and lack of confidence.
Mushayavanhu said the currency, which on Friday traded at US$1:ZiG13.5616, will replace bond notes which had been in the system since 2016.

Before his presentation of the much-anticipated Monetary Policy Statement, retailers were asking for ZW$3 500 as an equivalent of US$0.50.

However, after news of a new currency filtered through, US$0.50 cents is now worth ZW$5 000 bond notes as arbitrage-seekers cash-in before the phasing out of the old currency later this month.

Some retailers were now demanding up to ZW$10 000 for goods worth US$1. 

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