Zimbabwe’s ruling party has officially passed a resolution to designate the bullion-backed ZiG as the country’s exclusive legal tender, marking a significant shift away from the use of US dollars.
At the annual conference of the Zimbabwe African National Union-Patriotic Front, party officials instructed the government to “accelerate efforts to dedollarize the economy and promote the ZiG as the only currency.” However, no specific timeline was provided for this transition.
The ZiG, short for Zimbabwe Gold, represents the nation’s sixth attempt in 15 years to replace the dollar as the primary currency. Current laws stipulate that the US dollar will remain legal tender until 2030, although President Emmerson Mnangagwa has suggested that this deadline might be revised.
Since its introduction in April, the ZiG has encountered significant challenges, including a 43% devaluation last month, leading to increased calls for its abandonment. Following the September devaluation, public confidence in the ZiG has weakened, resulting in a return to dollarization within the economy, according to a report by Oxford Economics.
The International Monetary Fund has also cautioned that the ZiG alone cannot address Zimbabwe’s deeper economic issues, such as high inflation and a lack of public trust in financial authorities.
Zanu-PF, which has governed Zimbabwe since its independence in 1980, often uses its resolutions to shape government policy. The party has urged the government to implement “robust measures to enhance the purchasing power of the ZiG and promote its usage.”
As of Monday, the ZiG was trading at 28.37 per dollar on the official market, while parallel market rates were reported to be between 40 and 50 per dollar.
