TAPIWA MASHAKADA ON the ZIG Currency Promise and Challenges

Maji-Marefu Institute of International Relations and Security Studies

The ZiG structured currency cannot buy fuel . It is not accepted by petrol stations as legal tender .

Any currency that cannot be defended by monetary authorities won’t serve its purpose as a store of value and means of exchange, which are the key characteristics of money. The Zim dollar simply became irrelevant because it plummeted against the USD. Authorities failed to stop or reverse its free fall yet there were stockpiles of gold reserves at the Reserve Bank. What has changed?

No local currency can survive alongside the usd. It’s not possible because the economy has dollarized and consumers are transacting in USD. Goods and services are priced in USD. People will prefer to hold the stronger usd compared to the Zig.

In order to answer the question whether or not the ZiG will be accepted by the people just ask yourself a simple question: Can I buy fuel with Zig ? The answer is a big No .

If a domestic currency will not buy you fuel from the petrol station , then you should know it belongs to the dust bin. That is where the Zig story ends. It won’t work.

I don’t even need to belabour the point.

Dr Tapiwa JG Mashakada
Executive Director