ZiG is my currency, your currency, everybody’s currency-FinMin

HON. MATEWU:  Thank you Madam Speaker.  I want to thank the Minister for his Statement.  I just have only two questions.  The Hon. Minister mentioned that we have in reserve about US90 million worth of Zimbabwean dollar.  Does this figure include the money that is being converted, and the Minister said there is enough money to cover that in the reserves?  Have you considered that banks are converting Zimbabwean dollars already in people’s accounts into ZiG?  Is that money covered?  How many Zimbabwean dollars do we have in circulation inclusive of that that is in the bank, inclusive of the money that people hold in their bank accounts?  Is that all covered by the reserves that we have?  

Lastly, are you going to allow citizens to purchase Central Government services such as passports, number plates, such as if you want a licence in ZiG?  Thank you.

HON. P. ZHOU:  What plans are there that will make sure that all the Zimbabweans understand the importance of ZiG which is backed by gold?  What plans are there so that all of us understand how it works and how it functions?  I am happy that we have come here, we are few, but the whole country needs to understand the medium of communication that you are going to use.  When this money was unveiled, the prices of groceries have gone up, especially sugar and all the basics.  What plans are there that these groceries should come down to where they were already because we are working with 5 April, but those people have gone further?  ZiG will come when the market has been distorted already and its value will not be recognised. I thank you.

HON. PROF. M. NCUBE: First of all, I recognise Hon. Bajila and thank him for his question regarding how things will be handled. He is under the impression that ZiG will only begin to work at the end of the month, 30th April 2024 and yet civil servants will start receiving their salaries from the middle of the month, around 18th April 2024.

I am happy to say that his understanding is incorrect. ZiG is already effective and civil servants will be able to receive their salaries on time on 18th April, 2024. What RBZ mentioned really was the issue of availability of hard cash being available later, at least by the 30th of April. That is the issue, but in terms of receiving electronic payments into their accounts, civil servants will be able to receive these by 18th April or any time because ZiG is already operational.

Hon. Mutodi posed a very good question on how we will be able to deal with external shocks if a currency is backed by hard assets such as gold. What we have done is that we will build in a mechanism in anticipation of these shocks. What is happening is that our exchange rate is being driven, not just by the price of hard assets like gold but also, we take into account what we call effective exchange rate which is the inflation differentials between our country and other countries. That inflation differential is also known as the purchasing power parity. What happens is that when there is a shock, those shocks usually show up in inflation shocks. So, by taking into account those inflation differentials, we are able to take into account part of the shocks.

The Z$100 000 is that not too low – it translates to about US$3, yes this has been raised from the public and I am pleased that we will look into it and maybe we need to raise the threshold here. It is correct that the 100 000 is on the low side. We should not be bothering depositors. Certainly, that is a good point.

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