BY NOKUTHABA DLAMINI
“It remains the duty of all of us to respect and abide by measures and instruments intended to maintain economic stability and tame inflation,” President Mnangagwa said in his State of the Nation Address at the New Parliament Building in Mt Hampden on Wednesday.
He emphasized the importance of embracing the Zimbabwe Gold (ZiG) currency, which was adopted in April 2024 to stabilize the domestic currency.
“The adoption of the ZiG was an important step towards stabilising the domestic currency anchored by our gold and 8 precious metal reserves,” he noted.
However, Zimbabwe has been facing economic challenges, including hyperinflation, which has eroded the value of the currency and made it difficult for citizens to afford basic goods and services.
The country has been using a multi-currency system since 2009, but the RTGS dollar has struggled to maintain its value, leading to high inflation rates.
In response, the government has implemented measures to stabilize the currency, including the adoption of the ZiG and the willingness to allow greater flexibility in the foreign exchange market.
Despite these efforts, parallel market activities driven by speculative tendencies have resurfaced, causing concerns about economic disruptions.
President Mnangagwa assured Zimbabweans that the government remains committed to backing the currency through setting aside 50% of royalties for building reserves.
“Foreign currency inflows from exports have increased from US$7 billion in 2023 to US$8 billion in 2024,” he reported.
He also highlighted the government’s efforts to deepen the foreign exchange market and promote effective price discovery.
“The increased flexibility on the foreign exchange market is expected to further promote effective price discovery and encourage holders of foreign exchange to participate in the willing-buyer willing-seller market,” he explained.
In conclusion, President Mnangagwa urged Zimbabweans to work together to lay a solid foundation for economic prosperity, peaceful development, and freedom from undue external interference.
“Let us respect and abide by measures intended to maintain economic stability and tame inflation,” he emphasized.