ZiG New Currency Brings Economic Stability to Zimbabwe, Says IMF

The International Monetary Fund (IMF) has praised Zimbabwe’s new currency, the Zimbabwe Gold (ZiG), for bringing an end to a period of economic instability in the country. The ZiG, which was introduced in April 2024, has helped to stabilize the economy and curb inflation, according to a recent report by the IMF.

Prior to the introduction of the ZiG, Zimbabwe had been using the Zimbabwe dollar, which had lost significant value due to hyperinflation. This had led to a sharp rise in prices, particularly in the first three months of 2024. However, since the introduction of the ZiG, the economy has begun to show signs of stability, with the currency maintaining a stable exchange rate and inflation rates declining.

The IMF has concluded a recent mission to Zimbabwe, led by Wojciech Maliszewski and conducted from June 18 to 27, 2024.

MBAMALI had earlier reported this month that the IMF would send a consultation team to the country on a mission to assess the country’s economic performance following the introduction of the new Zimbabwe Gold (ZiG) currency.

The mission’s findings indicate that if Zimbabwe sustains its current macroeconomic stabilization efforts, the country is likely to achieve a cumulative inflation rate of around 7% for the remainder of the year. This would be a significant achievement, as Zimbabwe has not seen inflation rates this low in years.

The Reserve Bank of Zimbabwe (RBZ) introduced the ZiG as part of a broader effort to reform the country’s economy and address issues of corruption and fiscal mismanagement.

Persistence Gwanyanya, a member of the RBZ Board, noted in an interview that while there are still isolated cases of corruption, there have been significant improvements in fiscal management and accountability in the country.

“We think that there have been some notable improvements with regard to … fiscal accountability.”

“Whilst there are isolated cases of corruption that we acknowledge, the overall picture is that there has been significant improvement in fiscal management in the country. And unsurprisingly, we continue to improve.”

“But to achieve the ambitions, we reduce the leakages, we improve… accountability further in the economy.” He added.

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The IMF also noted that Zimbabwe’s economic governance still has significant weaknesses, and that corruption poses a risk to economic performance that needs to be addressed. Loice Matanda-Moyo, Zimbabwe’s prosecutor general, has estimated that corruption costs the country nearly US$2 billion annually.

Economists agree that corruption is a major obstacle to economic growth in Zimbabwe, and that it must be addressed in order for the country to achieve its economic goals. Godfrey Kanyenze, an economist and founding director of the Labour and Economic Development Research Institute of Zimbabwe, noted that corruption is a cancer that must be dealt with, and that there must be political will to address the issue.

The ZiG has maintained a stable exchange rate with the US dollar, and inflation rates have remained low. The Zimbabwe Statistics Agency (ZIMSTAT) reported that the month-on-month ZiG inflation rate for June 2024 was 0%, indicating that prices have remained constant on average between May and June.

The IMF’s report suggests that Zimbabwe is on the right path towards achieving economic stability and growth.