Zimbabwe’s latest attempt at stabilizing its currency, the Zimbabwe Gold (ZiG), is facing widespread rejection just days after the Reserve Bank devalued it by 40%. Businesses, public transport operators, and civil servants are increasingly refusing to accept the currency, highlighting a growing crisis of confidence in the country’s financial system.
The currency devaluation, announced last Friday, was intended by the government to ease inflationary pressures and stabilize the economy. However, the move has had the opposite effect, as many Zimbabweans now fear further devaluation, recalling the country’s troubled history with currency instability.
“Why should we accept a currency that our suppliers won’t take? This devaluation only worsens the situation,” said a farmer from Bulawayo, Zimbabwe’s second-largest city. His sentiment reflects the broader reluctance among merchants and traders who are skeptical about the ZiG’s reliability. According to the Consumer Council of Zimbabwe (CCZ), traders are either rejecting the currency outright or imposing inflated exchange rates, sometimes charging more than ZiG25 per US dollar, well above the official rate of ZiG24.88 to the dollar.
Public transport operators, including taxi drivers, are similarly turning their backs on the currency. “If I cannot buy fuel, pay levies, and the currency keeps losing value, why should I accept it?” one taxi driver asked, pointing to the practical challenges the devaluation has created. Without a stable currency, these operators struggle to keep their businesses running, forcing them to demand payments in US dollars or other stable alternatives.
Civil servants, who are paid partially in ZiG, are among the hardest hit by the devaluation. A secondary school teacher in Arcadia, who received his salary in ZiG, explained how the value of his pay halved within days. “I didn’t even get the chance to use my salary before its value dropped, but the prices on the shelves remain the same,” he said.
The Amalgamated Rural Teachers Union of Zimbabwe (ARTUZ) has called for an immediate adjustment of salaries to reflect the devaluation. “Since the ZiG has officially been devalued by 40%, the ZiG component of salaries should automatically be adjusted,” ARTUZ stated. Many civil servants fear the worsening inflation will continue to erode their incomes, leaving them unable to meet basic living expenses.
This marks yet another chapter in Zimbabwe’s long struggle with currency stability. After abandoning its national currency in 2009 amid hyperinflation, the country has experimented with various forms of currency, from the US dollar to the Zimbabwean bond note, and now the Zimbabwe Gold (ZiG). However, each attempt has been met with similar challenges, as rapid devaluations undermine public trust.
The government and the Reserve Bank of Zimbabwe now face the daunting task of restoring confidence in the ZiG. Without tangible measures to stabilize the currency and control inflation, Zimbabweans remain skeptical that the ZiG can survive much longer.
As inflation rises and businesses and individuals reject the currency, the government must act swiftly to reassure the public and prevent further economic deterioration.
