Moral suasion key for currency survival

THE Consumer Protection Commission said this week that it would team up with the Financial Intelligence Unit and the police on a blitz against traders that are rejecting the Zimdollar. The rejection of the Zimdollar comes after Reserve Bank of Zimbabwe (RBZ) governor John Mushayavanhu last week launched a new currency, Zimbabwe Gold (ZiG), to replace the battered local unit.

The rollout of ZiG notes and coins, which was scheduled for this week, has been pushed to April 30 to allow the central bank to conduct an awareness campaign to promote the currency.

This has left consumers stranded as traders and commuter omnibus crews shun the Zimdollar.

Consumer Protection Commission research and public affairs manager Kudakwashe Mudereri confirmed that they received complaints from customers of unscrupulous businesses refusing to accept ZWL$ notes, in violation of government policy.

“It is important to note that the ZWL$ remains legal tender and the country’s citizens have been given 21 days to change their ZWL$ notes and coins to ZiG,” Mudereri said.

He warned: “The penalty is going to be heavy on those found violating Exchange Control Regulations by refusing to accept ZWL$ notes.”

With allies like these, who needs enemies?

There is no need to exert the mighty force of government over a currency that is heading to the grave. Authorities should allow the Zimdollar to “rest in peace”.

Before the introduction of ZiG, the Zimdollar was on its way out with over 80% of transactions being done in United States dollars. The notes were mainly used for change.

If there is one constituency which should take the flak for the crisis, it is RBZ for putting the cart before the horse. This is not the first time that RBZ has launched a new currency. We expected it to ride on previous launches so that ZiG has a smooth landing and capitalise on the confidence accruing by virtue of the demise of the Zimdollar.

The opportunity was squandered. What Mushayavanhu requires now are constituencies that help him in building confidence in the local currency.

Moral suasion not the belligerent approach adopted the Consumer Protection Commission will do the trick.

RBZ seems to have now resorted to the carrot.

“… the Reserve Bank would like to reiterate that ZWL$ notes currently in circulation are still valid and remain legal tender until April 30, 2024. Accordingly, the ZWL$ should continue to be used for transactional purposes at the announced ZiG/ZWL$ conversion factor of 2498,7242,” Mushayavanhu said.

The silver lining this week was the announcement that over 90% of banking institutions and mobile banking service providers have configured their systems and transitioned to ZiG from Zimdollar. This enables the public to transact in the new currency.

As for the release of new notes and coins, April 30 seems too far.