The Standard (Zimbabwe)

ZiG fails to solve change woes

THE Reserve Bank of Zimbabwe (RBZ) recently introduced the Zimbabwe Gold (ZiG) as the o cial currency, a move aimed at stabilisin­g prices and the exchange rate.

Backed by foreign exchange reserves, precious metals, and valuable minerals, the ZiG was presented as a solution to Zimbabwe’s longstandi­ng economic woes.

However, a month into its implementa­tion, the ZiG is failing to address one of the country’s most persistent problems — the change asco.

For years, Zimbabwean­s have struggled with a severe shortage of small change, leading to widespread frustratio­n among consumers and businesses alike.

The introducti­on of the ZiG promised to alleviate this issue by providing a stable and reliable currency. Yet, the reality on the ground paints a di erent picture.

The persistent problem

Despite the introducti­on of the ZiG, the shortage of small denominati­ons remains a signi cant challenge.

Retailers and consumers are frequently forced to resort to barter systems or the use of vouchers in place of actual currency.

This situation undermines con dence in the new currency and perpetuate­s economic ine ciencies.

Businesses, particular­ly small enterprise­s, are hit hardest by this shortage. Many have reported declining sales as customers are unable to make exact payments.

This, in turn, a ects overall economic activity, exacerbati­ng the country's economic stagnation. The informal sector, where many transactio­ns are conducted in cash, is especially vulnerable.

Underlying issues

Several factors contribute to the ongoing change crisis. Firstly, the RBZ’s distributi­on of the ZiG has been uneven, with a greater emphasis on higher denominati­ons.

This focus overlooks the daily transactio­nal needs of the average Zimbabwean who requires smaller denominati­ons for routine purchases.

Secondly, there is a lack of con dence in the new currency. Many Zimbabwean­s, scarred by past experience­s with hyperin

ation and currency devaluatio­n, remain skeptical about the ZiG’s long-term stability. This skepticism leads to a reluctance to fully adopt the ZiG, further entrenchin­g the change problem.

Gendered impacts

The change asco also has signi cant gendered impacts. Women, who dominate the informal sector and small-scale retail operations, are disproport­ionately affected. Their businesses often rely on small transactio­ns, and the inability to provide or receive exact change hampers their operations. This issue underscore­s the broader gendered implicatio­ns of macroecono­mic policies that fail to consider the unique challenges faced by women.

The way forward

Addressing the change asco requires a multifacet­ed approach. Firstly, the RBZ must ensure a more balanced distributi­on of the ZiG, prioritisi­ng smaller denominati­ons to meet everyday transactio­nal needs. This can be achieved by increasing the minting and circulatio­n of coins and lowervalue notes.

Secondly, public con dence in the ZiG needs to be bolstered through transparen­t and consistent economic policies. Ensuring that the currency retains its value and purchasing power is crucial. The RBZ should also engage in public awareness campaigns to educate citizens on the bene ts and stability of the ZiG.

Thirdly, inclusive economic policies that consider the unique needs of women and the informal sector are essential. This includes facilitati­ng access to nancial services and providing support mechanisms for small businesses.

Conclusion

The introducti­on of the ZiG was a bold move aimed at stabilisin­g Zimbabwe’s economy. However, its failure to solve the change asco highlights deeper systemic issues that need to be addressed. The path to economic stability requires not just bold initiative­s, but also attention to the everyday realities faced by all Zimbabwean­s.