The introduction of the Zimbabwe Gold currency (ZiG) nearly five months ago has been met with a degree of stability and low inflation, a feat attributed to the relentless measures implemented by the Reserve Bank of Zimbabwe (RBZ) and the Second Republic under the stewardship of President Mnangagwa.
These measures include controlling the money supply, accumulating gold and foreign reserves, and channelling necessary foreign currency for approved imports into the banking sector and also arresting and closing bank accounts of ZiG saboteurs.
RBZ's Financial Intelligence Unit (FIU) and the police recently issued a stern warning saying there are no sacred cows in the countrywide crackdown on people, including political heavyweights and businesses violating the Exchange Control Act.
Recently, the FIU froze 522 bank accounts belonging to companies and individuals, while 140 entities and individuals were heavily fined as part of an ongoing clampdown on those who violate exchange control regulations.
Focus is now on suspicious transactions that include use of multiple bank cards dealing in foreign currency and inconsistent shopping behaviour.
This has relatively brought stability in the market and firming of the ZiG in formal transactions.
However, beneath this veneer of stability lies a significant challenge, the informal market, which poses a threat to the currency's integrity.
Despite the Government's efforts, the informal market has emerged as a hotbed for ZiG currency sabotage.
Investigations by the Zimpapers Politics Hub indicate that tuckshop owners and vendors are increasingly refusing to accept 7 ZiG coins as equivalent to 50 cents. Instead, they are demanding 10 ZiG notes.
The practice has cascaded to most of the informal traders who are now pegging their rates at 20 ZiG to US$1.
Their conduct not only disrupts daily transactions for ordinary citizens but also threatens to undermine the very foundation of the new currency.
If the FIU and other law enforcement agencies do not take action against these informal traders, the ZiG coin could become scarce, leading to a dearth of the currency in circulation.
The implications of this situation are dire.
As some businesses in the informal market continue to reject the ZiG, the public may find themselves facing higher prices and limited options for transactions.
This could incite discontent, as citizens struggle to navigate a market that is supposed to be stabilising.
To combat this growing issue, the Government has been urged to take stern measures against tuck-shops, restaurants, vendors, and other informal market operators refusing to accept the ZiG or are engaged in black market activities.
Such measures could include fines, penalties, or even imprisonment, similar to the actions being taken against illegal money changers.
This will send a clear message that the Government is serious about maintaining the integrity of its currency and protecting the welfare of its citizens.
In a recent interview, the FIU director general, Mr Oliver Chiperesa announced that the RBZ crack team has also taken its war to the informal sector, which has been identified as a hot-spot of currency manipulation meant to sabotage the ZiG.
The FIU said compliance from retail shops and the local manufacturing sector has been encouraging. However, it is within the informal sector where compliance was still problematic.
Sectors targeted by the FIU include tuck-shops, restaurants, vendors, commuter omnibus operators, grocery shops, saloons, hardware shops and some manufacturers who are refusing the ZiG or using outrageous black market rates.
"Yes, as far as the blitz is concerned; even when you have wide acceptance, you still have a few errant players, so our blitz continues to make sure that everyone complies.
"What I can say is that while we have wide acceptance by formal businesses, there is still some limited acceptance by the informal sector. Although we are seeing increasingly positive signs even from that sector, we are still seeing some bit of resistance among some of the players, some small businesses and the informal sector," Mr Chiperesa said.
The FIU launched a blitz after the introduction of the ZiG, when it realised that saboteurs were targeting the new currency.
Consumers are having a raw deal from tuckshop owners in Harare's downtown area, where goods are being sold exclusively in foreign currency.
He said some manufacturers, who supply goods to retailers, were still limiting the quantities sold in ZiG.
"They are splitting their invoices to say if a retailer is buying from them, they would say 15 or 20 or 30 percent is payable in ZiG and then the rest they are demanding foreign currency in US dollars," he said.
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The Government should also consider implementing educational campaigns to inform informal traders about the benefits of using the ZiG currency.
Providing incentives for compliance, such as tax breaks or access to business grants, could encourage acceptance of the new currency and foster a more cooperative environment.
Before the introduction of the ZiG currency, Zimbabwe's economy had been affected by hyperinflation, rampant currency devaluation, and widespread distrust in the financial system.
The current low inflation rates and relative stability reflect the success of these measures, but the threat posed by the informal market cannot be ignored.
The stability of the ZiG currency requires ongoing vigilance and cooperation from both the Government and the public. As Zimbabwe navigates this complex landscape, it is crucial for authorities to address the challenges posed by the informal market while fostering an environment that encourages compliance and supports economic growth.
Decisive action and promoting a culture of cooperation will ensure that the ZiG currency remains a viable and stable medium of exchange, ultimately benefiting all citizens. -@muponderichard.
