The gold-backed currency that ZANU PF promised would bring economic stability to Zimbabwe has crumbled in spectacular fashion. On Friday the ZiG fell by 44 percent against the US dollar on the official market after the Reserve Bank of Zimbabwe suddenly announced it was introducing greater exchange rate flexibility. This is not reform. This is collapse. This is what happens when a regime builds illusions instead of real economic foundations.
When the ZiG was introduced in April the government painted it as the miracle cure for our currency chaos. Backed by gold they said. Immune to speculation they claimed. Stable they promised. And yet less than six months later the truth has revealed itself. The Reserve Bank governor John Mushayavanhu sat with his monetary committee on Friday and after reviewing what he called the microeconomic and financial developments decided to open the currency to more market-based pricing. Translation the system is falling apart and they are scrambling.
The ZiG crashed from 14 to 25 against the US dollar in just a few hours. And that was on the official market. On the black market where ordinary Zimbabweans actually trade the ZiG had already slumped from 35 to 50. This is not a managed transition. This is a free fall. The supposed stability of the ZiG was never real. It was a fantasy created by a regime desperate to buy time.
Economist Tapiwa Mupandawana said it plainly. The value of a currency is a reflection of a country’s productive capacity. You cannot have a stable currency if you do not have a stable economy. And Zimbabwe’s economy is anything but stable. Corruption is rampant. Production is low. Investment is almost non-existent. We are a country run on propaganda not policy. On control not competence.
Prosper Chitambara from the Labour and Economic Development Research Institute tried to put a positive spin on it. He said letting the ZiG drop could show the central bank is starting to allow market forces to decide currency value. But even he admitted it would not make much difference to pricing because most businesses were already pegging their ZiG prices to the black market rate. In other words the black market is the real market. The official rate is just political theater.
This is the sixth time Zimbabwe has tried to invent a new currency since 2009. Each time it has failed. Each time ZANU PF blames something or someone else. But the root cause is always the same. A government that refuses to change. A leadership that refuses to be held accountable. And a system that serves only those at the top while the rest of the nation suffers.
The fall of the ZiG is not just about numbers on a screen. It is about broken trust. It is about families who watched their savings vanish. It is about pensioners who cannot afford food. It is about youth who see no future in a country where even the currency cannot survive.
ZANU PF wants the world to believe that Zimbabwe is on the rise. That the gold-backed ZiG was proof of that. But now the gold has faded and the truth shines through. There is no economic miracle. There is only manipulation.
This collapse must be a wake-up call. Zimbabweans must reject fake solutions and demand real reform. Until we have leaders who put the people first no currency will ever hold value because the problem is not the money. The problem is the system. And the system must go.
About The Author
