The newly launched Zimbabwe Gold-backed ZIG currency has been reported to be faced with low acceptance rate by Zimbabweans, as credibility doubt lingers.
The currency was introduced by the Reserve Bank of Zimbabwe in early April 2024, to replace the old note that has been battered by depreciation against major currencies, and has faced outright rejection by the people.
Since the rollout of ZIG, the currency appears to be heading down the same path of mistrust and credibility concerns as some government departments as well as businesses have refused to accept it.
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Several business owners said they would rather forgo a sale than accept the ZIG, preferring the U.S. as a safer currency. This spurred the Zimbabwe government to freeze the bank accounts of several businesses, accusing them of rejecting the ZIG currency, thereby sabotaging the growth of the economy.
Meanwhile, reports reveal that the government has allowed some businesses, such as gas stations, to refuse to accept the ZiG in favor of US dollars. Some departments, like the office that issues and renews passports, accept only US dollars.
Commenting on ZIG’s mistrust among citizens, Zimbabwe’s president Emmerson Mnangagwa has urged the citizens to embrace the newly launched currency, describing it as a matter of “national identity and dignity”. He however commended Zimbabweans who have adopted and are protecting the use of the country’s currency.
As the ZiG enters circulation, its fate remains uncertain, with Zimbabweans torn between the allure of a new currency and the safety of the tried and trusted U.S. dollar. Across Zimbabwe, the US dollar is still widely used, from paying rent and school fees to buying groceries. Many take their local currency earnings to the black market to exchange for dollars.
This forced the government to take a hard-line approach to arrest several black market currency who were accused of trying to undermine the new currency. While the issue of mistrust lingers, Zimbabwe authorities say they have faith in the ZiG because it’s backed by the country’s gold reserves.
The ZiG is the sixth currency Zimbabwe has used since the 2009 collapse of the Zimbabwe dollar amid hyperinflation of 5 billion percent, one of the world’s worst currency crashes to date. The government had previously floated various ideas to replace the Zimbabwe dollar, including introducing gold coins to stem inflation and even trying out a digital currency.
The gold-backed ZIG is the southern African country’s latest attempt to halt a long-running currency crisis underlining its persistent economic troubles.