Harare, Zimbabwe – The government is trying to persuade citizens to use its own currency more widely, with the longer-term aim of reducing reliance on the US dollar. But after years of currency instability, many remain reluctant to trust the latest attempt. The Zimbabwe Gold (ZiG), introduced in April 2024, is a government effort to restore confidence in the local currency.
The Reserve Bank of Zimbabwe (RBZ) says the currency is backed by foreign currency and precious metal reserves, including gold. Yet the challenge extends beyond introducing a new currency or strengthening its reserves. Zimbabweans who have watched their savings lose value and their wages shrink through successive currency crises remain cautious about holding money in a currency whose purchasing power they fear could deteriorate.
Zimbabwe abandoned its local currency in 2009 after a period of hyperinflation and adopted a multicurrency system dominated by the US dollar. A domestic currency returned in 2018, but repeated instability has made rebuilding public confidence difficult. For primary school teacher Charles Mbwandarikwa, the experience of earlier currency crises remains a warning.
He receives about a third of his salary in ZiG and says he exchanges it quickly rather than holding on to it. His caution stems from the losses he suffered when Zimbabwe’s previous currency collapsed. He lost his pension savings during the 2009 crisis.
When the local currency was reintroduced in 2018, he says, the value of his salary fell from the equivalent of $540 to $40 by the end of that year. Such experiences help explain why official assurances about the ZiG have not necessarily translated into confidence among earners. The RBZ has sought to strengthen the currency’s credibility.
On April 7 , the bank introduced an upgraded series of ZiG banknotes with revised designs and security features. According to the RBZ, annual ZiG inflation stood at 3.7 percent last month. But relatively low inflation alone does not guarantee that people will choose to save in the currency or use it for everyday transactions.
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