Introduction of ZiG Inspires Reggae Song Amid Economic Challenges

Spread the love

HARARE, Zimbabwe — The introduction of Zimbabwe’s newest currency in April has inspired reggae artist Ras Caleb to record a song praising the ZiG, or Zimbabwe Gold. The catchy tune, titled “Zig Mari,” has been widely broadcast on state television and radio.

Ras Caleb was rewarded with a car and $2,000—ironically paid in U.S. dollars—by a businessman with close ties to Zimbabwe’s ruling party and President Emmerson Mnangagwa, who praised the song as a patriotic act.

Despite the promotional efforts, including public rallies and commercial jingles, the ZiG faces significant public mistrust. Zimbabwe’s sixth national currency in 15 years was introduced to halt a money crisis, replacing the Zimbabwe dollar, which had depreciated severely. However, the ZiG has struggled to gain acceptance. On the black market, $1 can be exchanged for up to 17 ZiGs, despite its relatively stable value on the official market.

Authorities have taken stringent measures to support the new currency, arresting more than 200 street currency dealers and freezing the accounts of businesses accused of undermining the ZiG by using higher exchange rates than the official one. National police spokesman Paul Nyathi stated that these actions are aimed at maintaining the currency’s stability.

The crackdown has affected numerous individuals, including twin brothers Tapiwa and Justice Nyamadzawo, who were arrested for allegedly selling cellphone airtime at an unfavorable exchange rate. They remain in pretrial detention, facing charges that carry a maximum prison term of 10 years.

This crackdown is at odds with Zimbabwe’s history of street currency trading, where unofficial rates often prevail. Many businesses and vendors, especially in the informal sector, still prefer U.S. dollars. Even some official entities, such as gas stations and passport offices, accept only U.S. dollars, highlighting the persistent demand for foreign currency.

The government has announced fines of up to 200,000 ZiGs (about $15,000) for businesses not adhering to the official exchange rate, and some accounts have been frozen for rejecting the new currency or trading at higher rates. The Reserve Bank of Zimbabwe has not disclosed the names of affected businesses.

Zimbabwe’s monetary instability has been a longstanding issue, with the ZiG being the latest attempt to stabilize the economy since the Zimbabwe dollar’s collapse in 2009 due to hyperinflation. Central bank governor John Mushayavanhu has promoted the ZiG as a step towards reducing reliance on the U.S. dollar, which currently accounts for more than 80% of transactions. Mushayavanhu aims to reduce this to 50% by 2026.

However, the U.S. dollar remains widely used for rent, school fees, and groceries. Many citizens, including government workers, exchange their earnings for dollars on the black market. The government plans to open bureau de changes for small transactions in dollars, but economists and business groups caution that forceful measures alone will not build confidence in the ZiG.

“The solution is to build public confidence in the local currency. Otherwise, arrests will not work as long as people are hungry for U.S. dollars, which they cannot get from official channels,” said economist Prosper Chitambara.

Street currency dealers, once a common sight in Zimbabwe’s urban areas, have now gone underground, using social media and messaging platforms to conduct their business. Maxwell Chisanga, a Harare resident, said he needs U.S. dollars for everyday transactions despite being paid in ZiGs. “My landlord needs her rent in dollars so I have no choice but to look for it on the black market,” Chisanga said.

As Zimbabwe continues to grapple with economic instability, building public trust in the new currency remains a formidable challenge. – AP