Zimbabwe Currency Crisis: Lawyer Questions Legality of Zimbabwe Gold Currency
Zimbabwe's Currency Crisis: Lawyer Questions Legality of Zimbabwe Gold (ZiG)Renowned lawyer Thabani Mpofu has raised concerns over the legal status of Zimbabwe's latest currency, Zimbabwe Gold (ZiG), citing the expiration of supporting legislation. Introduced in April 2024 at a rate of 13.6 ZiG per US dollar, ZiG has lost nearly 80% of its value on the black market.
Mpofu, known for representing former CCC leader Nelson Chamisa, argues that the statutory instrument that operationalized ZiG lapsed on October 4, 2024, rendering it no longer legal tender. This development has significant implications for Zimbabwe's financial stability.
ZiG was launched as part of a series of policy measures aimed at stabilizing the nation's economy, addressing exchange rate volatility, curbing inflation, and restoring macroeconomic stability. Backed by precious minerals, mainly gold, and foreign currency, ZiG symbolized a significant shift in Zimbabwe's monetary policy.
However, Mpofu's concerns highlight the urgency of addressing the currency's legal status to prevent further economic instability. With ZiG's value plummeting on the black market, the government must take swift action to restore confidence in the currency and ensure economic recovery.
The Reserve Bank of Zimbabwe had assured that ZiG was underpinned by substantial reserves, including 2.5 tonnes of gold and US$300 million in cash. However, the currency's expiration as legal tender raises questions about its continued viability.
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