New currency introduced in Zimbabwe

Zimbabwe launched a new currency on Tuesday to replace the Zimbabwean dollar, which has lost public confidence due to excessive devaluation.

The new currency zigs (ZiG) was already introduced electronically at the beginning of April, but now it is also possible to use this currency in the form of banknotes and coins.

This is Zimbabwe’s latest attempt to emerge from a long-running currency crisis that is underscoring the country’s economic woes. The government had previously considered several ideas to replace the Zimbabwean dollar, including introducing gold coins and even trialling a digital currency.

The new currency, whose name is short for Zimbabwe Gold, is backed by the country’s gold reserves. However, since the electronic implementation on April 5, it has not gained trust and even some government institutions have refused to accept it.

The zig is the sixth currency used in Zimbabwe since the collapse of the Zimbabwean dollar in 2009 amid five billion percent hyperinflation. A chaotic series of events followed, first allowing the US dollar as legal tender, then banning it, then allowing it again.

Later, gold coins and digital currency were also tried, but the US dollar is still the most reliable means of payment for ordinary citizens.

The Zimbabwean government has allowed some businesses, including gas stations, to stop accepting the new currency and accept US dollars instead. Some establishments, including passport issuing and renewal offices, only accept US dollars.

Other companies have been ordered to use only the new currency or face fines.

Many in Zimbabwe still remember that in 2009, during the hyperinflation, 100 trillion Zimbabwe dollar banknotes were printed.

At one point, a slice of bread cost more than 500 million Zimbabwean dollars. Restaurants stopped listing prices on menus because they tended to rise during the meal. People were walking around with bags stuffed with bills. Savings and pensions became worthless.

The government of Zimbabwean President Emerson Mnangagwa has resorted to harsh methods in introducing the new currency. Dozens of currency black market operatives have been arrested on charges of undermining the new currency. After the electronic introduction of the zig, the bank accounts of some companies were frozen because the government accused them of refusing to accept the new currency.

The government has said it trusts the zig because it is backed by the country’s gold reserves. In a speech on Monday, the president said trusting the zig was a matter of “our national identity and dignity.”

An online news outlet published a political cartoon of a policeman trying to prop up a crumbling house with the word ZiG on it. The cartoon was captioned “The world’s first police-backed currency”.