God-given resources will help us achieve success

OVER the past five years, the Second Republic has been clear on its strategy to modernise and industrialise Zimbabwe, especially against the backdrop of unique circumstances the country finds itself in, where it is buffeted by sanctions from the United States, the United Kingdom and Europe. It also unequivocally stated that growth and development will be driven by agriculture and mining, among other critical sectors.

Since then, we have recorded incredible milestones in agriculture, where production of crops such as wheat has risen to record highs.

Not only have we also resuscitated dormant and mothballed mining operations, we have since attracted new investments, not least in sub-sectors such as lithium, where cumulative capital investments are now nearing US$1 billion.

All these successes have concomitantly driven the country’s overall economic performance.

We now proudly stand as one of the fastest-growing economies in the region, which is no mean feat.

But most of our successes over the past five years have also been blighted and overshadowed by continued price increases and an unstable exchange rate due to a depreciating local currency.

The Government has had to intervene in various instances to foster a modicum of stability.

But these peculiar challenges and experiences (peculiar because we are still living under sanctions) have helped shape both our response and resolve.

This has naturally led to the birth of a new currency, Zimbabwe Gold (ZiG), which was recently unveiled by Reserve Bank of Zimbabwe Governor Dr John Mushayavanhu.

Most critically, ZiG is a structured currency whose value is backed by gold, a mineral that is found in abundance in this country.

If the central bank strictly sticks to its mandate, as it has promised to do, there is no way ZiG will fail.

For centuries, gold has been, and still is, the most durable and sustainable store of value and medium of exchange compared to any other currency in the world, the US dollar included.

It, therefore, becomes incumbent on all of us to defend our currency from attack.

It is in our best interest. President Mnangagwa could not have made this any clearer in his speech at the main 44th Independence Day celebrations in Buhera, Manicaland province, on Thursday. “Government is alive to the adverse impact suffered by our people as a result of currency volatility and inflation,” he said. “Last week (a fortnight ago), my administration launched a new structured gold-backed currency, the Zimbabwe Gold (ZiG). Nyika yedu iri kuenderera mberi. Ilizwe lethu liya phambili.

“Our ZiG currency is anchored by our God-given gold and other strategic mineral resources, as well as foreign currency reserves. This development will boost our confidence and pride in our own national currency and further help protect our currency from attack by the country’s detractors.

” The benefits of a stable currency are quite apparent.

It will help drive demand for goods and services in the economy, thereby fuelling economic activity, which essentially has a multiplier effect.

It will also help promote a culture of saving, which can potentially create a pool of funds that can be used to drive development.

In addition to sustainably cushioning pensioners, a stable currency could add impetus to the ongoing infrastructure development programmes, which at times were disrupted due to reluctance by some contractors to be paid in a depreciating currency.

Encouragingly, ZiG is gradually gaining acceptance in the market. But we still need to remain vigilant. Elsewhere in this paper, we carry a report of 11 companies whose bank accounts were recently frozen by the central bank’s Financial Intelligence Unit for sins ranging from refusing to transact in the new currency and trading exclusively in United States dollars. So, the RBZ must remain resolute in defending the new currency.

However, its biggest challenge will be re-establishing confidence in monetary authorities.

Granted, confidence cannot be earned in one day, but Governor Mushayavanhu has shown his sincerity and commitment to walk the talk.

He deserves to be given a chance. Without a stable local currency, our journey to 2030, by which time we expect to have built a modern and prosperous country, would become difficult.

Also, within that period, Zimbabwe is expected to exit the multicurrency regime.

But the journey begins now.