The efficacy of the use of ZiG money as a sole legal tender in Zimbabwe. The case of Chinhoyi Town, Zimbabwe.
Keywords:
zig, legal tender, market confidence , fiscal descipline, Researve Bank of ZimbabweAbstract
To decide on the acceptability and usability of ZiG on the Zimbabwean market, the paper traces the history of the use of the local currencies and the operation of the Reserve Bank of Zimbabwe’s monetary policy dating back to 1980. The history made it clear that there was poor monetary policy by the Reserve Bank of Zimbabwe which compelled the people to lose confidence in the use of any future local currencies. This research adopted a qualitative research approach. Primary data supplemented secondary data. The research population consists of all Chinhoyi residents above 18 years and a convenience sampling method was chosen to select respondents. Four focus group discussions (FGDs) were done, and a questionnaire was distributed to key informants. Observations were also done to argument FGDs and the questionnaire. The research revealed that populace does have confidence in the use of ZiG instead prefers to use foreign currencies. The main drivers for this lack of confidence in the use of ZiG was noted as emanating from citizens past experiences in the use of local currency and the high inflation rates associated with local currencies. The paper, thus, provides some policy recommendations on how best to boost the acceptability and usability of ZiG.
References
Alafarika for Studies and Consultancy. (2024). Why Zimbabwe’s gold-backed currency experiment is flawed. Retrieved from https://alafarika.org.
Beigut, S. (2015). The effect of Zimbabwe’s multi-currency arrangement on bilateral trade: Myths vs reality. International Journal of Economics and Financial Issues, 5(3), 690–700.
Bishop, C. (2020, April 18). The birth of Zimbabwe 40 years ago: The days when the Zimbabwe dollar cost $1.60 US dollars. CNBC Africa. Retrieved from https://www.cnbcafrica.com/2020/the-birth-of-zimbabwe-40-years-ago-thedays-when-the-Zimbabwe-dollar-cost-1-60-us-dollars/.
Bulawayo News 24 Staff Reporter. (2024, July 21). Zimbabwe shops continue to reject ZiG. Bulawayo News 24. Retrieved from https://bulawayo24.com/indexid-news-sc-national-byo-244131.html.
Business Weekly Writer. (2024, May 10). Market sceptical of ZiG despite Government push for adoption. Business Weekly. Retrieved from https://businessweekly.co.zw/market-sceptical-of-zig-despite-govt-push-for-adoption.
Carmody, M. (2019, February 5). What caused hyperinflation in Venezuela: A rare blend of public ineptitude and private enterprise. The Conversation. Retrieved from https://theconversation.com.
Chipinda, B. (2024, May 27). Public trust and confidence: Zimbabwe’s currency reform hurdles. ISS African Futures. Retrieved from https://issafrica.org.
Conkling, T. S. (2010). Analysis of the Zimbabwe hyperinflation crisis: A search for policy solutions (Undergraduate thesis). The Pennsylvania State University, Schreyer Honors College.
Coomer, J., & Gstraunthaler, T. (2011). The hyperinflation in Zimbabwe. The Quarterly Journal of Austrian Economics, 14(3), 311–346.
Gono, G. (2008, September 10). Exchange control press statement: Launch of foreign licensed warehouses and retail shops (FOLIWARS). Reserve Bank of Zimbabwe.
Hanke, S. H., & Kwok, A. K. F. (2009). On the measurement of Zimbabwe’s hyperinflation. Cato Journal, 29(2), 353–364.
Harari, Y. N. (2014). Sapiens: A brief history of humankind. New York: Random House.
Haussmann, R., & Rodríguez, F. (2014). Venezuela before Chávez: Anatomy of an economic collapse. Pennsylvania: The Pennsylvania State University Press.
Hungwe, B. (2014, July 17). Zimbabwe’s multi-currency confusion. BBC News. Retrieved from https://www.bbc.com/news/world-africa-26034078.
Hungwe, C. (2014). Understanding monetary systems in modern economies. Harare: Economic Review Press.
Imoikor, J. (2024, May 29). From ZWD to ZiG: A look at Zimbabwe’s latest attempt at currency stability. Alafarika for Studies and Consultancy. Retrieved from https://alafarika.org/4720/from-zwd-to-zig-a-look-at-zimbabwes-latestattempts-at-currency-stability
Institute for Security Studies. (2024, April 19). Zimbabwe’s new ZiG doomed by overall lack of transparency. Retrieved from https://issafrica.org.
Kairiza, T. (2009). Unbundling Zimbabwe’s journey to hyperinflation and official dollarization. GRIPS Policy Information Centre Discussion Paper 09–12, Minato-ku, Tokyo, Japan.
Kulesza, M. (2017). Inflation and hyperinflation in Venezuela (1970–2016): A post-Keynesian interpretation. Working Paper No. 93/2017.
Langa, V. (2024, October 30). Zimbabwe: Five reasons why ZiG currency faces doom. The Africa Report. Retrieved from https://www.theafricareport.com.
MacKinnon, J. (2024, February 5). How hyperinflation took hold in Argentina and Venezuela. Financial Pipeline. Retrieved from https://www.financialpipeline.com.
Mbofana, R. (2024a, October 10). Zimbabwe government’s continued web of lies on ZiG gold backing exposed. The Zimbabwean. Retrieved from https://www.thezimbabwean.co/2024/10/zimbabwe-governments-continued-webof-lies-on-zig-gold-backing-exposed/.
Mbofana, R. (2024b, September 29). The Zimbabwe government is the biggest threat to its own currency. Nehanda Radio. Retrieved from https://nehandaradio.com/2024/09/29/the-zimbabwe-government-is-the-biggest-threat-to-its-own-currency/.
Monaldi, F. (2016, June 6). Weathering collapse: An assessment of the financial and operational situation of the Venezuelan oil industry. Financial Times.
Mundell, R. (1998). Gresham’s law: A study in the development of monetary policy. Journal of Monetary Economics, 41(1), 33–55.
Ncube, T. (2024, May 2). ZiG will stand or fall on public trust, nothing else. NewsDay. Retrieved from https://www.newsday.co.zw
Ndoro, N. (2024, August 9). Zimbabwe rated worst investment destination amid currency fluctuations. Nehanda Radio. Retrieved from https://nehandaradio.com/2024/08/09/zimbabwe-ranked-worst-investment-destination-amidcurrency-fluctuations/.
Nyarota, S., Kavila, W., Mupunga, N., & Ngundu, T. (2016). An empirical examination of the dynamics of negative inflation in Zimbabwe. RBZ Working Paper Series No. 1/2.
Ocampo, E. (2021). A brief history of hyperinflation in Argentina. Serie Documentos de Trabajo No. 787, Universidad del Centro de Estudios Macroeconómicos de Argentina.
Pindula News Editor. (2024, July 5). Plans to make ZiG sole legal tender unsettles banks. Pindula News. Retrieved from https://www.pindula.co.zw/2424/07/05/mnangagwa-says-zimbabwe-could-adopt-zig-as-sole-currency-before-2030/
Reserve Bank of Zimbabwe. (2014, January 29). Monetary Policy Statement. Retrieved from https://rbz.co.zw.
Reserve Bank of Zimbabwe. (2019). Monetary Policy Statement: Statutory Instrument 142 of 2019. Government of Zimbabwe. Retrieved from https://rbz.co.zw. Reserve Bank of Zimbabwe. (2024, April 5). Questions and Answers. Retrieved from https://rbz.co.zw
The Weekender Reader. (2023). Zimbabwe Coalition on Debt and Development (ZIMCODD). Retrieved from htps://zimcodd.org/weekend-reader/.
The Weekender Reader. (2024). Building economic resilience through diversification. Retrieved from https://theweekender.co.zw
The Weekender Reader. (2024). Currency promises and economic realities: Zimbabwe’s repeating cycle. Retrieved from https://theweekender.co.zw.
The Weekender Reader. (2024). Government credibility and the collapse of local,currencies. Retrieved from https://theweekender.co.zw.
Zim GBC News Business Correspondent. (2024, August 21). Masvingo supermarkets refuse ZiG payments, leaving civil servants stranded
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Upon acceptance and publication, authors grant The Dyke a non-exclusive licence to publish and distribute their article in all formats and media. This means: Authors may freely share, deposit, and republish their work (e.g., in institutional repositories, websites, or future publications), provided proper citation and acknowledgment of The Dyke as the original publisher.
This work is licensed under a Creative Commons Attribution 4.0 International License.
All articles in The Dyke are published under the Creative Commons Attribution 4.0 International License (CC BY 4.0).
Under this licence:
- Others may copy, redistribute, remix, transform, and build upon the work for any purpose, even commercially.
- Appropriate credit must be given to the original author(s) and source (The Dyke), along with a link to the license.
- Any changes made must be indicated.
Full licence details: https://creativecommons.org/licenses/by/4.0/
Archiving and Preservation
The Dyke supports long-term preservation of scholarly work through partnerships with digital repositories and indexing services, including Sabinet African Journals. Authors are also encouraged to deposit a copy of their published article in institutional or subject-specific repositories.
