Zimbabwe has witnessed a steady increase in the use of the Zimbabwe Gold (ZiG) currency in domestic transactions since its introduction in April. According to Finance Secretary George Guvamatanga, the ZiG now accounts for 39% of domestic transactions, up from 30% in April. This growth indicates a growing acceptance of the domestic currency, which replaced the Zimbabwe dollar that had become volatile.
To support the ZiG, authorities have implemented measures such as maintaining tight monetary and fiscal policies, requiring import duty on luxury goods to be paid in ZiG, and directing businesses to pay taxes in a 50-50 split between ZiG and US dollars. These efforts aim to promote the use of the domestic currency and reduce reliance on foreign currency.
Guvamatanga noted that most transactions in ZiG are electronic, but efforts are underway to increase the distribution of physical notes and coins, particularly in rural areas. However, smaller denominations are readily available at the Reserve Bank of Zimbabwe, but key economic players are not withdrawing them for public use.
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To address this, the government is exploring alternative distribution channels, including HomeLink, to improve the circulation of physical notes and coins. Additionally, efforts are being made to increase the availability of small denominations to facilitate transactions for transport fares and other small value obligations.
The introduction of the ZiG has brought stability to the market, with retailers and formal players increasingly accepting the local currency. Guvamatanga emphasized that the government has no intention of tampering with free funds from remittances, which will continue to be treated as free funds.
Overall, the growth in the use of ZiG indicates a positive trend towards de-dollarization, with the government committed to supporting the domestic currency through various measures. As the government continues to work towards increasing the circulation of physical notes and coins, the Zimbabwe Gold ZiG is expected to play an increasingly important role in Zimbabwe’s economy.
