Zimbabwe approves roadmap to abandon US dollar for new bullion-backed currency

The Zimbabwean government has given the green light to a roadmap that will see the phase-out of the U.S. dollar in favor of its new bullion-backed currency, the ZiG, for transactions within the country.

Facing a prolonged currency crisis over the past decade, the southern African nation has heavily relied on the U.S. dollar, which currently dominates about 70 percent of all economic transactions in the nation.

Encouraged by the positive performance of the ZiG in curbing inflation and maintaining a stable exchange rate, the Zimbabwean government is considering advancing the timeline for the adoption of a single currency, possibly before the initial target of 2030.

Introduced in April, the ZiG is supported by gold reserves.

“The use of the local currency is always the best way for any country to operate, we are no exception. However, when you have the kind of instability that is currently prevailing, the market defaults to a more stable currency, in this case the U.S. dollar. And unless the fundamentals underlying the local currency itself are fixed, the market will always run to safety,” said Farai Mtambanengwe, chairman of the SMEs Association of Zimbabwe.

To transition successfully, Zimbabwe will need to boost exports and restore public trust in its new currency.

In Zimbabwe’s predominantly cash-based informal economy, the preference for conducting business in U.S. dollars remains strong, with many hoping the multi-currency system will continue.

“The ZiG has maintained its value unlike the previous currency. If it remains as strong then it should continue to circulate with the U.S. dollar,” said Pachawo Kativhu, an informal trader.

“I import the goods I sell, so using the U.S. dollar works for me. I am concerned that if we start using the ZiG only, I might not be able to access foreign currency to import,” said Patience Chawanda, another informal trader.

Zimbabwe adopted the U.S. dollar in 2009 after hyperinflation decimated its local currency. This legacy could make it challenging to completely eliminate the greenback from the economy.

“The market dollarized on its own and it does not need the authorities to tell it not to use U.S. dollars. 50 to 70 percent of our market is a cash market, you cannot take away the dollars from people’s pockets, from underneath their mattresses, that’s where the dollars are,” said Tinashe Murapata, an economic analyst.

China Media Group (CMG), the country’s flagship broadcaster, aired a gala celebrating the traditional Qixi Festival, also known as the Chinese Valentine’s Day, on Saturday, offering a visual feast and a romantic atmosphere for viewers nationwide.

The Qixi Festival falls on every seventh day of the seventh month according to the Chinese lunar calendar. It celebrates the legend of the annual dating between the mythological figures of the Cowherd and the Weaver Girl. This year’s Qixi Festival falls on Saturda.

The gala’s main stage was situated in Yunxi County, within Shiyan City in Hubei Province, central China. Yunxi, as the ancestral home of the Cowherd and the Weaver Girl, is regarded as an important birthplace and inheritance place of Qixi culture.

This year’s gala featured a diverse range of performances, including songs, dramas, dances, recitations, and musicals.

“Although widely viewed as Chinese Valentine’s Day, Qixi is not solely focused on love. It is about pursuing and building a better life, involving endeavors such as seeking skills and wisdom to make oneself stronger. This is the essence of Qixi,” said Gu Zhigang, the gala’s chief director.

Apart from show on CMG’s TV channels including CCTV-1, CCTV-3, and CCTV-15, the gala is available on CMG’s official website, new media platforms such as CCTV news app and Yangshipin app, as well as radio programs.