Let’s be resolute in defending ZiG

19 May, 2024 - 00:05 0 Views
Let’s be resolute  in defending ZiG

The Sunday Mail

SINCE the introduction of the new currency — Zimbabwe Gold (ZiG) — on April 5, various Government arms have been noticeably determined to ensure that it does not fall victim to speculators who have traditionally driven its depreciation.

Police have been rounding up illegal foreign currency dealers who, heretofore, had the temerity to brazenly operate in the open.

And the Reserve Bank of Zimbabwe’s Financial Intelligence Unit (FIU) has been equally aggressive, as it has been pursuing individuals and corporates whose accounts would have been flagged by banks.

This should be the norm.

Not many people know that when former US President Abraham Lincoln established the Secret Service on April 14, 1865, the primary motivation was to defend the US dollar.

To this day, the US government continues to aggressively go after those who pose a threat to its currency and, by extension, its economy.

This is why the punishment for financial crimes is deterrently stiff.

So, news that the Ministry of Finance, Economic Development and Investment Promotion has committed additional resources to enhance the capability of the FIU is both comforting and encouraging.

In an interview last week, FIU director-general Oliver Chiperesa said: “We also have a strategic plan that guides us in terms of what we want to achieve over a five-year period and whether we have the resources.

“So, the resources that we have to achieve our current strategic plan are quite there and we have no complaints at all in terms of resources. The central bank, like I said, and the Ministry of Finance have always been supportive in that regard.”

This is welcome news.

The flagging of suspicious transactions and subsequent freezing of the offending bank accounts should, therefore, continue.

Far too often, some bank accounts were being conveniently abused with seeming impunity by illegal foreign currency dealers, and, so, too, were debit cards that were being offered to shoppers at the entrance of major supermarkets.

Surely, this should be easy to track.

But the support should not be limited to the FIU alone, but it has to be extended to the other agencies and departments that deal with financial crimes — if that is not the case already.

Fighting financial crimes has become a global expectation as it helps to eliminate money laundering and boost transparency.

We need to give ZiG, which is already supported by reserves that include gold and cash, a fighting chance.

The advantage of using our own stable local currency has already become apparent as it has led to an upsurge in consumer demand, which is helpful in oiling local economic activities.

The multiplier effect can be felt up and down the value chain.

But business also needs to unlearn the unhelpful habit of adopting pricing models that disproportionately promote sales in foreign currency and discourage the use of ZiG.

This is counterproductive and would likely make the journey to de-dollarisation long, painful and arduous.

The central bank continues to reiterate that banks are in a position to fully finance those who genuinely need foreign currency.

We all have a role to play in ensuring that we jealously guard and support our own currency.

On its part, the central bank has made assurances that it intends to do “the right thing” consistently enough to engender confidence.

It has also made an undertaking not to print money that is not supported by adequate reserves at any given time, as well as scrupulously stick to the prudential management of monetary policy.

As part of its ambitious de-dollarisation plan, it envisions that 30 percent of local transitions will be in local currency by the end of the year.

This is expected to rise to 40 percent by the end of 2025, before jumping to 50 percent the following year.

This is achievable if we all make a commitment to make this a reality.

Overall, we should be resolute in defending ZiG.

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