Zimbabwe’s government has approved a roadmap to transition from using US dollars to the gold-backed ZiG currency, which was introduced several months ago in an effort to stabilize the southern African country’s economy.
Information Minister Jenfan Muswere announced the move during a media briefing on Tuesday, following a cabinet meeting in the capital, Harare.
“On modalities to operationalize ZiG as legal tender for use in the economy, a de-dollarization roadmap is now in place with a time frame, as presented by the minister of finance, economic development, and investment promotion,” the minister told reporters.
Zimbabwe has relied heavily on the US dollar amid a currency crisis that has persisted for more than a decade. The greenback currently accounts for around 70% of all economic transactions, Bloomberg reported, citing data from the country’s central bank.
Prior to the unveiling of ZiG (Zimb Gold) in April, the Zimbabwean dollar had depreciated against the US currency on every trading day this year. The ZiG launch, reportedly the government’s sixth attempt to stabilize the local currency in 15 years, is backed by 2.5 tons of gold and $100 million in foreign currency reserves.
In a late June press release, the International Monetary Fund (IMF) reported that the ZiG official exchange rate has so far remained stable, ending a bout of macroeconomic instability that Harare experienced in the first three months of the year.
Zimbabwean President Emmerson Mnangagwa said last month that the new currency could become the country’s sole legal tender by 2026, ahead of the projected 2030 deadline.
On Tuesday, Information Minister Muswere announced the government’s plan to increase penalties for “perpetrators of unjust price hikes, manipulation of ZiG currency, smuggling, and all forms of unfair trade practices.”
He said the authorities will review fines for various offenses, ranging from a minimum of $200 to a maximum of $5000, or the ZiG equivalent.