In a surprising turn of events at the Zimbabwe International Trade Fair in Bulawayo, Vice-President Constantino Chiwenga was exposed for misleading the public about the origins of the recently abandoned bond notes. Contrary to Chiwenga’s claims, these notes were not a relic from the colonial era but rather a modern financial attempt that failed. The bond notes were introduced to stabilize Zimbabwe’s failing economy but quickly lost value due to high inflation and unstable exchange rates, leading to their swift removal.
Chiwenga wrongly said that the bond notes dated back to Ian Smith’s time and were connected to the Unilateral Declaration of Independence. This misinformation adds to the confusion and mistrust among the people, especially now as the government rolls out its new currency, the Zimbabwe Gold, or ZiG.
The introduction of ZiG has been chaotic, with officials making unhelpful and often conflicting statements, hurting confidence in the new currency even before it hits the market. For example, Zanu PF spokesperson Chris Mutsvangwa incorrectly called ZiG a gold currency, wrongly suggesting that Zimbabwe had historically used gold as currency. Reserve Bank of Zimbabwe governor John Mushayavanhu added to the confusion by claiming that ZiG was developed with the World Bank’s help, and said that criticizing ZiG was like criticizing the World Bank. He also admitted that previous claims about the bond notes being backed by a US$200 million loan from Afrexim Bank were false.
These statements have seriously damaged the credibility of ZiG and eroded public confidence. The government’s desperate measures to stabilize the currency through force have also proven useless. Despite claims of large gold and foreign exchange reserves, these strategies have yet to show success.
Historically, while Zimbabwe has a strong tradition of gold mining and trading, it has never used gold as its sole currency. The myth that gold was Zimbabwe’s economic backbone is false. Agriculture has always been the mainstay of Zimbabwe’s economy, not gold. During colonial times, Zimbabwe participated in the gold standard by trading gold but never used gold as its currency.
Officials often oversimplify or distort Zimbabwe’s monetary history. A more accurate account, as given by Dr. Tinashe Nyamunda, a lecturer in Economic and Social History at the University of Glasgow, shows that Zimbabwe’s monetary systems have changed a lot over time. From using Sterling during the colonial period to the Rhodesian dollar, which matched the British pound until Zimbabwe’s independence in 1980, the journey has been complex.
The Rhodesian dollar was introduced shortly before Rhodesia became a republic in 1970, a move prompted by Rhodesia’s exclusion from the Sterling area and ceasing participation in the International Monetary Fund. The currency was mainly a result of political circumstances rather than economic stability.
As Zimbabwe faces another economic challenge with ZiG, it is crucial to address these historical inaccuracies and misrepresentations that prevent genuine understanding and trust among the people. The ongoing economic instability, driven by misleading statements and unclear policies, continues to challenge the country’s financial system.
In conclusion, while introducing new currencies like ZiG is an attempt to stabilize the economy, the success of such measures depends on honest and clear communication from government officials. As Zimbabwe navigates through these difficult economic times, correcting the narrative around its monetary history is essential. This is not just about setting the historical record straight but about restoring faith in the systems that govern the nation’s economy.