ZiG can only last if Mnangagwa puts his foot down

Zimbabwe central bank governor John Mushayavanhu can shout “not under my watch” as much and as loudly as he wants but this will not sustain the newly introduced Zimbabwe Gold local currency unless President Emmerson Mnangagwa puts his foot down.

Mnangagwa knows the people that manipulate the local currency. He has known them since he came to power nearly seven years ago but he has failed to bring them to book because they are “in high places and in places of trust”. 

In short, they are in his government, in the ruling party, and maybe close business associates or even relatives. They are people that view themselves to be above the law because they enjoy some form of protection.
Writing in his first weekly column for the Sunday Mail in October 2018, Mnangagwa said: “Reports and submissions before me on illicit currency dealings point to an intricate network of currency speculators mostly in high places and in places of trust.

“In a number of cases which have now been brought to government’s attention, some of our guardians of the financial services sector have either not discharged their roles fully, or have not done so honestly.

“In other cases, some have colluded with negative elements, both inside and outside the banking system, to aid and abet these illicit transactions. Considering that more than $9 billion is passing through different electronic platforms and leaving an ‘electronic trail’, it is inconceivable that these illicit transactions have and can ever go on undetected or unnoticed.

“It simply cannot be. Someone somewhere sees this, or simply winks.

“Overall, it is a story of sins of both omission and commission. Our whole financial sector risks disrepute, and therefore sanity has to be restored.

“In most economies, sudden huge movements of money or unexplained ‘swelling’ of deposits raise eyebrows. Millions have been moved unexplained in our financial services sector, with no one batting an eyelid.”

Then Central Bank governor John Mangudya confirmed that those playing havoc with the local currency were not small players – the sphatheleni that police always chase around.

“The people moving money onto the black market, the people behind the money changers, are not your ordinary Zimbabwean,” Mangudya said at the time.

“These are influential people with access to huge sums of cash. It has been discovered that one character has been pushing onto the black market as much as US$48 million in foreign currency.

“This person has access to cash and it is difficult to understand how this could have happened without the knowledge of the CIO, the FIU (the RBZ’s Financial Intelligence Unit), the police as well as the commercial bank.”

Despite Mnangagwa’s promise that sanity should be restored, nothing has changed. Instead, the situation has gotten worse. The Zimbabwe dollar was trading at 6:1 when Mnangagwa and Mangudya complained about the saboteurs. It had fallen to 40 000:1 by Friday, 5 April 2024 when new governor John Mushayavanhu decided to change the local currency to the ZiG, which he said was pegged at nearly 14:1.

If the culprits who have been fiddling with the currency, who Mangudya said were influential people, are not reined in, arrested and exposed, the ZiG will go the way other local currencies – bearer’s cheques, bond, RTGS- have gone.

Only Mnangagwa can stop this. He has nothing to lose but everything to gain by putting the economy right. But then, the question is why has he failed to do this over the past six years? The only plausible explanation is that those involved have got a hold on him. If that is the case then Zimbabwe and its ZiG are doomed.

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