The launch of Zimbabwe’s newest currency, ZiG, inspired a reggae artist to record a song praising the currency. Despite the government’s efforts to promote the ZiG through public rallies and commercial jingles, public mistrust and structural barriers persist, with many still preferring to use U.S. dollars. The currency has faced challenges on the black market, where it has tumbled in value. Authorities have taken forceful measures to support the ZiG, including arresting street currency dealers and freezing the accounts of businesses that undermine the new currency.
The crackdown on street currency dealers has led to the arrest of over 200 individuals, including twin brothers who were charged with selling airtime at a rate higher than the official exchange rate. Despite the government’s efforts to enforce the use of the ZiG, many businesses continue to prefer U.S. dollars, with some even listing their fees in dollars. The government has imposed fines on businesses that do not comply with the official exchange rate and has frozen the accounts of those trading at higher rates. Zimbabwe has a history of monetary instability, with the ZiG being the sixth currency introduced following the collapse of the Zimbabwe dollar in 2009.
The governor of Zimbabwe’s central bank has emphasized the ZiG as a step towards de-dollarization, aiming to reduce the dominance of the U.S. dollar in the country’s transactions. However, the dollar remains widely used for everyday transactions, leading many citizens to seek dollars on the black market. Economists and business groups have warned that the government’s use of force is unlikely to build confidence in the ZiG or deter black market traders. Street currency dealers have moved their operations underground, using social media platforms to connect with clients and continue trading in dollars.
Despite receiving their earnings in ZiGs, many individuals still rely on U.S. dollars for rent, school fees, and groceries, leading to a continued demand for dollars on the black market. Economists believe that building public confidence in the local currency is crucial to addressing the issue, as long as people remain hungry for dollars. The disparity between the official exchange rate and the market rate, as well as the continued use of U.S. dollars for transactions, highlight the challenges facing the government’s efforts to promote the ZiG as Zimbabwe’s primary currency.
