Business
Will Zimbabwe’s new currency be a hit or another failure? Economists weigh in – IOL
Zimbabwe’s new currency, the ZiG, made its debut this month and a number of economists have had their say as Harare makes a sixth attempt at introducing a revamped unit.
Zimbabwe’s Reserve Bank Governor, John Mushayavanhu introduced the ZiG as the new local medium of exchange on April 5. The notes and coins will come into circulation by the end of the month, but for now the electronic version of the ZiG was operationalised.
The ZiG is currently trading stronger than the South African rand.
The Rand was trading at R18.71 to the ZiG at 09:30am on Friday.
Trading against the dollar
Mushayavanhu set the introductory exchange rate of 13.56 per US dollar when the ZiG started trading on Monday.
On Tuesday, the currency maintained its position and traded at 13.53 to the dollar, according to data from the Reserve Bank of Zimbabwe’s website.
On Wednesday, the ZiG was trading at around 13.11 to the dollar and by the end of the week the currency traded at 13.08 to the dollar.
The Zimbabwean government has linked the ZiG to the price of gold in an attempt to reduce volatility. A single ZiG is worth around 7 US cents, the same price of a milligram of gold.
Mushayavanhu has advised that the country will not be returning to the gold standard.
Over the week the Reserve Bank has noted that the currency has gained strength each day and it should be noted that this was a stark difference to the Zimbabwean Dollar.
The Zim Dollar lost value every single trading day of 2024 and was abandoned on April 5.
What do the experts have to say?
According to Daniel B Ndlela, the managing director at Zimconsult Economic Planning Consultants, the ZiG’s gain over the week against the dollar is of no consequence.
Ndlela said that these gains were more likely to be mere fluctuations in the local currency or a reaction to the British pound gaining 0.2% at the same time specifically on Tuesday, April 9. He added that the strength is very unlikely to last.
In terms of the gold reserves to back up the currency, Ndlela said that the central bank claims that the ZiG will be fully backed by $100 million in cash and 2,522 kilograms of gold worth $185 million.
“There is no transparency to ascertain that they have enough gold reserves to back up this local ZiG currency,” according to the economist.
When asked about how the international markets will react to the new currency, Ndlela said that “these markets will certainly adopt a wait-and-see attitude for quite some time”.
The country has tried five times in the past to renew a local currency but has failed. Ndlela said that “these past attempts to manage an effective monetary and exchange rate policy have been thwarted by lax in fiscal policy and interference from the highest political system.”
“All the attempts to renew local currency have failed mainly due to the fact that the Zimbabwean post-independence experience has been characterised by policy incoherence, inconsistency and poor implementation rates,” he said.
The currency will fail
Trade economist and adjunct professor of economics at Durban University of Technology, Gift Mugano, was critical of the new currency and said that the ZiG will fail dismally.
“We want a functioning currency so that we can generate savings, investments, pensions and build a prosperous economy,” he added.
Mugano said that Zimbabwe’s money merry-go-round over the years has always been dogged by disagreements clearly drawn on political lines.
Chiedza Madzima, the head of operational risk and Africa research at Fitch Solutions said that Zimbabwe’s market stability will require fiscal discipline, re-engagement with key lenders, and economic shock absorption.
“This will bridge the confidence gap, not pictures of gold bars,” she concluded.
A fresh start for Zim
Brains Muchemwa, an economist and CEO of Oxlink Capital, said the new currency is a fresh start for the country.
“The new governor of the Reserve Bank has promised to depart from the quasi-fiscal activities of the previous regime and focus on the core mandate of the central bank. Consequently, the exchange rate has priced the sentiment and considering the thin volumes traded, it’s still too early to tell how far the government will continue to defend the exchange rate by injecting US dollars to stabilise the market,” he explained.
Speaking on the government’s ability to back up the currency with gold reserves Muchemwa said, “The reserve money component of the new currency is just about the equivalent of $90 million in an economy that is dollarised to over $10 billion including the informal market. With reserves of around $285 million, the government can easily stabilise the exchange rate if it puts sufficient safeguards to create demand for the local currency through obligating that all taxes be payable in ZiG”.
“Without such support to anchor the demand side, the reserves will not be enough to support the exchange rate,” he added.
In terms of international market reactions, Muchemwa said that the reason Zimbabwe failed five times was largely because the government resorted to printing money to fund the budget.
He still questions whether this will be a new chance for the government to be successful.
“The legacy issues loom large and hopefully this time around, the new governor will be able to advise his fiscal counterparts to slow down on running huge fiscal deficits that are monetised at the central bank, thereby creating unproductive money supply that destabilises the exchange rate,” Muchemwa said.
IOL BUSINESS
Business
Breaking news. – The Herald
Welcome to The HeraldOnline live blog of the Zimbabwe International Trade Fair! We’re thrilled to bring you real-time updates from one of the world’s most anticipated events in the business calendar.
Held annually in the City of Kings, Bulawayo, the Zimbabwe International Trade Fair is a vibrant showcase of the best in trade and industry, not just from Zimbabwe, but from across the globe.
This event is a melting pot of innovation, collaboration, and business excellence, attracting exhibitors and visitors from various sectors and countries.
Today’s programme startedwith the signing of a number of MOUs, an event witnessed by President Emmerson Mnangagwa and his Kenyan Counterpart Dr William Ruto.
Thousands of people have thronged the ZITF grounds for the official opening of this year’s edition to be presided over by President Mnangagwa and Kenyan President William Ruto.
11:30 hours – Meanwhile Vice President Mohadi has arrived for the official opening, followed by the First Lady Dr Auxillia Mnangagwa and her counterpart, Kenyan First Lady Rachel Ruto.
11:34 – Both Heads of State have arrived for the official opening.
11:36 – President Ruto is now inspecting the guard of honour.
President Ruto Inspecting the Guard of Honor at the Zimbabwe International Trade Fair.
FAST FACTS ON ZITF
- Birthed 1899 by the Rhodesia Farmers Association
- Became Bulawayo Agricultural Society
- Bulawayo Agricultural Society opened May 1899.
- Became Central African Trade Fair to cater for industry.
- First Fair opened by Queen Elizabeth 11 May 1899.
- Renamed Trade Fair Rhodesia in 1969.
- Changed to Zimbabwe-Rhodesia Trade Fair in 1979.
- Became Zimbabwe International Trade Fair in 1980.
- Main purpose-connect business, market Zimbabwean products.
- The ZITF Company was established in 1986.
- The ZITF has become Zimbabwe’s premier international trade show.
- President William Ruto of Kenya is officially opening the ZITF this year.
12:00 – Minister of Industry, Commerce, and Enterprise Development Honourable Mangaliso Ndlovu is now giving his remarks. He says Zimbabwe and Kenya have a lot in common.
12:02 – He adds that Zimbabwe has always been a land of innovation and commerce.
12:06 – Minister Ndlovu paves the way for a poem recited in honour of President Ruto, the Guest of Honour before inviting him to the podium to deliver his keynote address.
12:08 – As a result of President Mnangagwa’s policies, together with strategies of supporting farmers the seeds of transformation are there for all to see.
He says Zimbabwe is destined for greatness and Kenya will stand shoulder to shoulder with it.
12:10 – Zimbabwe has always been a nation of innovation, and under President Mnangagwa’s leadership the positive changes taking place under his leadership are testimonials of a people who have won against powerful adversaries.
12:12 – The economic transformational changes taking place across the country are evidence of a country ready to transform its challenges into opportunities towards poverty reduction, employment creation and reduction of inequality thereby ushering in economic development and incisive prosperity.
12:15 – President Ruto asserts that as a result of President Mnangagwa’s policies of Agricultural revitalization, together with strategies of supporting farmers, the seeds of transformation have been sawn for Zimbabwe.
12:17 – He adds that it’s such fruits of transformation which leads to rural wealth and employment creation – leading to the maturing of various agro-industrial value chains which attract investment into expansion in manufacturing and growth in exports thereby creating more jobs for the people of Zimbabwe.
He adds that the restoration of agriculture as the cornerstone of Zimbabwe’s economic growth and the re-birth of the country as a famous bread basket is visible.
12:20 – The second visible effects of Zimbabwe’s commitment of embarking on a new ambitious journey of development is its infrastructural development, which has enhanced Zimbabwe’s transport, energy and ICT sectors towards bolstering domestic and regional connectivity, increasing productivity, promoting trade and attracting investment.
12:25. He notes the recent visit to Kenya by Zimbabwe’s Minister of Information Communication Technology, Postal and Courier Services honorable Tatenda Mavetera where she participated in the Connected Africa Summit on behalf of President Mnangagwa as part of thought leaders in shaping the future ICT landscape of the continent. He adds that he held robust conversations with her and many others on how Africa should be connected and the benefits of this vision.
He says these efforts which clearly show how Zimbabwe is pursuing regional integration show how the country is determined to capitalize on domestic, regional, and pan-Africa trade – and in all this Kenya will stand shoulder-to-shoulder with Zimbabwe.
12: 34 – Zimbabwe’s introduction of a new currency backed by gold and other minerals is another clear indication to committed efforts to economic recovery and transformation.
12:37 – These bold decisions by the country, constitute a bold and radical economic recovery and reform agenda based on an ambitious vision to see the country prosper despite the daunting challenges experienced by the country, said President Ruto.
President Ruto says it’s well-known that economies that possess technologies get much more out of their resources. It’s also a fact that innovation is the recipe for transformation.
Innovation empowers technology and processes to achieve more making it easier to satisfy demand through efficiency in productivity.
Innovation guarantees competitiveness, he said.
He adds that Zimbabwe exemplifies Africa’s best-case scenario – a young nation with a robust literacy rate of 89,89% and populated by well-educated and highly skilled young people to drive the nation forward.
Zimbabwe’s natural resources are diverse – including coal, cobalt, gold, iron, lithium, platinum, and many others – therefore there is no doubt that these present an opportunity for them to be deployed to preserve the new currency.
The sky is surely the limit for Zimbabwe’s transformation agenda, said President Ruto.
Innovation will enable every economic sector to harness the power of automation and robotics which are revolutionizing productivity and redefining the future of work globally.
Innovation will simply transactions, enhance financial inclusion, and promote e-commerce. With innovation barriers become bridges, borders transform into portals and challenges transform into opportunities.
There is no doubt that the ZITF represents Zimbabwe’s preparedness to usher in a new era of development driven by the country’s human and natural resources.
Potential investors must start paying close attention to the economic reforms underway lest they lose out on highly beneficial incentives that are clear for all to see.
President Ruto concludes by encouraging participants to take advantage of the ZITF to forge partnerships, collaborate, and exchange ideas about the most innovative means of achieving mutual benefits.
Business
LIVE: “Official Opening of Zimbabwe International Trade Fair 2024: A Beacon of Global Business Innovation Unveiled – The Herald
LIVE: Official Opening of Zimbabwe International Trade Fair 2024 – A Beacon of Global Business Innovation Unveiled
Welcome to The HeraldOnline live blog of the Zimbabwe International Trade Fair! We’re thrilled to bring you real-time updates from one of the world’s most anticipated events in the business calendar.
Held annually in the City of Kings, Bulawayo, the Zimbabwe International Trade Fair is a vibrant showcase of the best in trade and industry, not just from Zimbabwe, but from across the globe.
This event is a melting pot of innovation, collaboration, and business excellence, attracting exhibitors and visitors from various sectors and countries.
Today’s programme startedwith the signing of a number of MOUs, an event witnessed by President Emmerson Mnangagwa and his Kenyan Counterpart Dr William Ruto.
Thousands of people have thronged the ZITF grounds for the official opening of this year’s edition to be presided over by President Mnangagwa and Kenyan President William Ruto.
11:30 hours – Meanwhile Vice President Mohadi has arrived for the official opening, followed by the First Lady Dr Auxillia Mnangagwa and her counterpart, Kenyan First Lady Rachel Ruto.
11:34 – Both Heads of State have arrived for the official opening.
11:36 – President Ruto is now inspecting the guard of honour.
President Ruto Inspecting the Guard of Honor at the Zimbabwe International Trade Fair.
FAST FACTS ON ZITF
- Birthed 1899 by the Rhodesia Farmers Association
- Became Bulawayo Agricultural Society
- Bulawayo Agricultural Society opened May 1899.
- Became Central African Trade Fair to cater for industry.
- First Fair opened by Queen Elizabeth 11 May 1899.
- Renamed Trade Fair Rhodesia in 1969.
- Changed to Zimbabwe-Rhodesia Trade Fair in 1979.
- Became Zimbabwe International Trade Fair in 1980.
- Main purpose-connect business, market Zimbabwean products.
- The ZITF Company was established in 1986.
- The ZITF has become Zimbabwe’s premier international trade show.
- President William Ruto of Kenya is officially opening the ZITF this year.
12:00 – Minister of Industry, Commerce, and Enterprise Development Honourable Mangaliso Ndlovu is now giving his remarks. He says Zimbabwe and Kenya have a lot in common.
12:02 – He adds that Zimbabwe has always been a land of innovation and commerce.
12:06 – Minister Ndlovu paves the way for a poem recited in honour of President Ruto, the Guest of Honour before inviting him to the podium to deliver his keynote address.
12:08 – As a result of President Mnangagwa’s policies, together with strategies of supporting farmers the seeds of transformation are there for all to see.
He says Zimbabwe is destined for greatness and Kenya will stand shoulder to shoulder with it.
12:10 – Zimbabwe has always been a nation of innovation, and under President Mnangagwa’s leadership the positive changes taking place under his leadership are testimonials of a people who have won against powerful adversaries.
12:12 – The economic transformational changes taking place across the country are evidence of a country ready to transform its challenges into opportunities towards poverty reduction, employment creation and reduction of inequality thereby ushering in economic development and incisive prosperity.
12:15 – President Ruto asserts that as a result of President Mnangagwa’s policies of Agricultural revitalization, together with strategies of supporting farmers, the seeds of transformation have been sawn for Zimbabwe.
12:17 – He adds that it’s such fruits of transformation which leads to rural wealth and employment creation – leading to the maturing of various agro-industrial value chains which attract investment into expansion in manufacturing and growth in exports thereby creating more jobs for the people of Zimbabwe.
He adds that the restoration of agriculture as the cornerstone of Zimbabwe’s economic growth and the re-birth of the country as a famous bread basket is visible.
12:20 – The second visible effects of Zimbabwe’s commitment of embarking on a new ambitious journey of development is its infrastructural development, which has enhanced Zimbabwe’s transport, energy and ICT sectors towards bolstering domestic and regional connectivity, increasing productivity, promoting trade and attracting investment.
12:25. He notes the recent visit to Kenya by Zimbabwe’s Minister of Information Communication Technology, Postal and Courier Services honorable Tatenda Mavetera where she participated in the Connected Africa Summit on behalf of President Mnangagwa as part of thought leaders in shaping the future ICT landscape of the continent. He adds that he held robust conversations with her and many others on how Africa should be connected and the benefits of this vision.
He says these efforts which clearly show how Zimbabwe is pursuing regional integration show how the country is determined to capitalize on domestic, regional, and pan-Africa trade – and in all this Kenya will stand shoulder-to-shoulder with Zimbabwe.
12: 34 – Zimbabwe’s introduction of a new currency backed by gold and other minerals is another clear indication to committed efforts to economic recovery and transformation.
These bold decisions by the country, constitute a bold and radical economic recovery and reform agenda based on an ambitious vision to see the country prosper despite the daunting challenges experienced by the country.
Business
LIVE: “Official Opening of Zimbabwe International Trade Fair 2024: A Beacon of Global Business Innovation Unveiled – The Herald
LIVE: Official Opening of Zimbabwe International Trade Fair 2024 – A Beacon of Global Business Innovation Unveiled
Welcome to The HeraldOnline live blog of the Zimbabwe International Trade Fair! We’re thrilled to bring you real-time updates from one of the world’s most anticipated events in the business calendar.
Held annually in the City of Kings, Bulawayo, the Zimbabwe International Trade Fair is a vibrant showcase of the best in trade and industry, not just from Zimbabwe, but from across the globe.
This event is a melting pot of innovation, collaboration, and business excellence, attracting exhibitors and visitors from various sectors and countries.
Today’s programme startedwith the signing of a number of MOUs, an event witnessed by President Emmerson Mnangagwa and his Kenyan Counterpart Dr William Ruto.
Thousands of people have thronged the ZITF grounds for the official opening of this year’s edition to be presided over by President Mnangagwa and Kenyan President William Ruto.
11:30 hours – Meanwhile Vice President Mohadi has arrived for the official opening, followed by the First Lady Dr Auxillia Mnangagwa and her counterpart, Kenyan First Lady Rachel Ruto.
11:34 – Both Heads of State have arrived for the official opening.
11:36 – President Ruto is now inspecting the guard of honour.
President Ruto Inspecting the Guard of Honor at the Zimbabwe International Trade Fair.
FAST FACTS ON ZITF
- Birthed 1899 by the Rhodesia Farmers Association
- Became Bulawayo Agricultural Society
- Bulawayo Agricultural Society opened May 1899.
- Became Central African Trade Fair to cater for industry.
- First Fair opened by Queen Elizabeth 11 May 1899.
- Renamed Trade Fair Rhodesia in 1969.
- Changed to Zimbabwe-Rhodesia Trade Fair in 1979.
- Became Zimbabwe International Trade Fair in 1980.
- Main purpose-connect business, market Zimbabwean products.
- The ZITF Company was established in 1986.
- The ZITF has become Zimbabwe’s premier international trade show.
- President William Ruto of Kenya is officially opening the ZITF this year.
12:00 – Minister of Industry, Commerce, and Enterprise Development Honourable Mangaliso Ndlovu is now giving his remarks. He says Zimbabwe and Kenya have a lot in common.
12:02 – He adds that Zimbabwe has always been a land of innovation and commerce.
12:06 – Minister Ndlovu paves the way for a poem recited in honour of President Ruto, the Guest of Honour before inviting him to the podium to deliver his keynote address.
12:08 – As a result of President Mnangagwa’s policies, together with strategies of supporting farmers the seeds of transformation are there for all to see.
He says Zimbabwe is destined for greatness and Kenya will stand shoulder to shoulder with it.
12:10 – Zimbabwe has always been a nation of innovation, and under President Mnangagwa’s leadership the positive changes taking place under his leadership are testimonials of a people who have won against powerful adversaries.
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