New ZiG rocks the South African rand
Late Jamaican reggae icon Bob Marley’s son Ziggy was trending in Zimbabwe going into the weekend, not because of anything linked to music but as the butt of jokes directed at Zimbabwe’s new currency, the Zimbabwe Gold (ZiG).
His name Ziggy rhymes with the currency abbreviation, while his surname phonetically sounds like the local IsiNdebele and ChiShona words for money, which are “imali” and “mari.”
The jokes also include a long-forgotten defunct pop music band from Zimbabwe, the Zig Zag Band. That’s what pessimists made of the country’s new currency.
“To be honest, I couldn’t help but laugh. What they simply did was what they used to do: cut zeros off the currency and present it as something new. Only this time they gave it a new name,” said Tongai Dube, a secondary school math teacher.
The ZiG has become the country’s sixth currency since its independence in 1980.
The new currency, officials say, is backed by foreign currency and gold reserves held at the reserve bank.
According to the new reserve bank governor, John Mushayavanhu, Zimbabwe has 2.5 tons of gold and foreign currency reserves worth about R5.4 billion.
To gain trust in the ZiG, Mushayavanhu vowed to stop a culture of wanton printing of money at the Reserve Bank of Zimbabwe (RBZ), which in the past created hyperinflation, which killed the local currency.
The physical notes are not yet available; they will be on the market by 30 April.
However, the currency debuted stronger than the South African Rand when it became available in electronic form.
Officially, ZiG 1 was equivalent to ZAR 1.83 by the end of the day on Wednesday. But the rand, alongside the United States dollar, plays a bigger role in the Zimbabwean economy than the ZiG.
For example, one cannot buy fuel using the ZiG, and it can’t be used to pay for a passport application, which is pegged at about R3 000 or US$170.
In a statement, the Reserve Bank of Zimbabwe (RBZ) said: “The current pricing mechanism in the fuel sector will remain in place until otherwise reviewed.”
The RBZ promised to make the ZiG more attractive and acceptable internationally.
“ZiG is a local currency that has just been launched and has not yet achieved convertibility. The bank will work to strengthen the currency to attain full convertibility, consistent with the regional agenda for macroeconomic convergence under the SADC Protocol on Finance and Investment,” the RBZ said.
Before the introduction of the ZiG, the Zimbabwean dollar, also known as the Real Time Gross Settlement Dollar (RTGS), had lost 80% of its value, trading at ZAR1 to RTGS 14 000. News24
