Currency: Zimbabwe relies on the ZIG to counter hyperinflation

The new Zimbabwean currency, Zimbabwe Gold, or ZiG, for Zimbabwe Gold, has officially entered circulation.

ZIG notes and coins now replace the Zimbabwean dollar, the value of which collapsed in 2023, leading to rampant inflation.

Takawira Madzimbanyika is already looking forward to breaking his 10 ZIG note: “Now I can get my change back in coins. Before, when we bought with US dollars only, we were given change with salt or matches, we were forced to buy useless things instead of getting our change back.”

The launch of this new currency was chaotic, particularly at the level of the banks which had to ensure their transition to ZiG in record time. The same cannot be said of their customers who will have to make a major effort to adapt to make good use of this new currency.

Susan Chikumene, a customer of a local bank, is already confused: “I'm afraid that some people will defraud me because I don't understand the value of Zig. We need someone to explain to us, I asked them at the bank and they told me they didn’t know,” she says indignantly.  

Zimbabwe has been plagued for twenty years by a deep economic crisis marked by shortages of money and food. 

Happiness Zengeni, an economist, believes that the country's policy, which has long relied on money printing by the central bank, will have to change if confidence in this new currency is to be sustainable. “It's really up to the government to be able to self-regulate and be disciplined enough to stay away from the printing press and then people will slowly and gradually begin to accept the currency. local and there will be no need for an alternative market", underlines the expert. 

The value of ZiG is based on reserves including 100 million US dollars in cash, as well as 2 and a half tonnes of gold. Zimbabwe's finance ministry has promised to add its own $300 million reserves to shore up the currency.