For traders and commuters, ZiG isn’t coming fast enough

12 May, 2024 - 00:05 0 Views
For traders and commuters, ZiG isn’t coming fast enough Courage Tasago

The Sunday Mail

Emmanuel Kafe

SINCE their introduction on April 30, new Zimbabwe Gold (ZiG) banknotes and coins have been as elusive as the mineral they are named after.

Individuals and businesses have had to adapt to a life without the jingle of loose change in their pockets.

Small businesses are still grappling with the problem of inadequate notes and coins for change.

“I am yet to see the new ZiG currency,” said Courage Tasago, who runs a tuckshop in downtown Harare.

“This is making business extremely difficult.

“We are forced to charge to the nearest US$1 to avoid the issue of change.”

His small business has taken a hit as a result.

Cash-reliant public feels the pinch

Others who rely on cash transactions are facing the same challenge.

In some cases, the shortage of physical notes and coins has unfortunately led to price hikes for some essential goods and services.

Intra-city commuters have not been spared either.

Fares often land awkwardly between round dollar amounts, triggering a frustrating game of “pooling change” with strangers.

Exploiting this chaos, some unscrupulous commuter omnibus operators have seized the opportunity to profiteer by raising fares.

Fares on some routes previously set at US$1 have inexplicably jumped to US$1,50.

Commuters have had to pool fares in order to meet the new inflated figure or overpay for their journey, potentially spending US$2 for a one-way trip.

Fears

There are fears that this scarcity may have the adverse effect of putting a premium on cash as compared to electronic money, as was the case during the previous RTGS monetary dispensation.

Two exchange rates coexisted — a stronger one for cash and a weaker one for electronic transactions.

On the day ZiG was launched, for instance, US$1 could fetch ZWL6 000 in cash, but a whopping ZWL33 000 electronically. Unsurprisingly, this imbalance pushed most transactions in the economy towards digital platforms like mobile money and point-of-sale systems.

Zimbabwe’s historical struggle with cash shortages further worsened the situation.

Divisibility

Confederation of Zimbabwe Retailers president Mr Denford Mutashu said monetary authorities should consider injecting more liquidity into the market.

“While we acknowledge and understand that currency should be scarce, we also recognise our failure to bridge the gap and ensure the wider availability of ZiG, considering the important role it is meant to play,” he said.

“Unlike the US dollar, which lacks smaller denominations, we embraced this new currency precisely because of its inherent value backed by gold and its divisibility characteristics. Unfortunately, most retailers have yet to obtain it.”

Reasonable

However, Bankers Association of Zimbabwe president Mr Lawrence Nyazema believes it is a matter of time before ZiG becomes widely available.

“Since ZiG is a completely new currency, it will naturally take time to circulate and reach the average person in all the 10 provinces, considering that most financial activities are concentrated in urban areas,” he said.

“It is too early to conclude whether the money has reached its intended destinations, as the new notes were introduced on April 30, and we are only a few weeks into the process.

He said the May salaries are expected to result in increased activity as people withdraw the new currency.

“It also provides an opportunity for those who were previously demanding only foreign currency to consider being paid in the local unit.

“Therefore, while the supply of ZiG from the central bank seems reasonable, I believe the main constraint lies in the demand. I would challenge anyone who claims they have enough money to withdraw ZiG3 000 every week.”

For many observers, Zimbabwe’s path forward demands a multi-pronged approach that ensures ZiG lives up to its promise as a symbol of a truly stable and inclusive currency.

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