BY GAMUCHIRAI MASIYIWA

With the price of gold up globally, the Reserve Bank of

Zimbabwe in April put the gold coins it stopped minting a year earlier back on the

market.

But interested investors had to act fast.

By mid-June, the sale of coins from its accumulated stock was abruptly concluded

and another chapter of the currency chaos that has characterized the nation’s

economy for decades was in the books. This time, at least, economists say the

experiment had little effect.

The short-lived sale is just the latest example in a long line of inconsistent policies,

says Ithiel Mavesere, a lecturer in the economics and development department at theUniversity of Zimbabwe. Storing value in a gold coin is not a viable option for the

majority of the population, he adds.

“Ideally, what they should have done is come up with low-value coins, with

denominations as low as equivalent to US$20 for the majority of the population to

afford,

” Mavesere says.

However, Reserve Bank of Zimbabwe Governor John Mushayavanhu says in a written

response to Global Press Journal that the gold coins were effective as an alternative

investment instrument and there was huge demand from both corporations and

individuals. According to RBZ data, corporations bought about 79% of the gold coins

and individuals bought about 21%.

About US$12 million’s worth sold

The lowest denomination of the coins represents a tenth of an ounce of gold,

equivalent to 9,299.13 in Zimbabwe gold, or ZiG, the national currency, or about

US$347. The highest denomination of the coins represents one ounce of gold,

equivalent to ZiG 92,991.34 or about US$3,470.

In all, the central bank has sold gold coins worth ZiG 343 million, or about US$12.8

million, according to Mushayavanhu, who says the recent sale happened after the

bank noted increased demand following the rise in international gold prices.

“In this context, the Reserve Bank re-issued an accumulated parcel of gold coins from

a combination of gold coins which had been bought back from the market through

redemptions and some coins which were still being held at the Reserve Bank from

the previously minted stock,

” the governor wrote.

A statement from the bank in mid-June announcing the halt to the sale indicated it

had been intended to clear the stock of gold coins it had and those that had been

cashed in by their holders.

Mushayavanhu says the bank stopped minting gold coins in April 2024 to prioritize its

gold reserve which, along with foreign currency reserves, backs the Zimbabwe gold

currency.

He says foreign reserves increased from US$270 million in April 2024 to US$731 million

as of the end of June.

The central bank first introduced the Mosi-oa-Tunya gold coins — which share an

indigenous name for Victoria Falls — in 2022 at a time when the country was

experiencing currency instability with high inflation and continued devaluation of

what was then the national currency, the Zimbabwe dollar.

The coins aimed to reduce dependency on the US dollar and help stabilize the

economy. The coins helped mop up excess cash in local currency that was circulatingin the market. Coupled with other monetary measures in 2022, the monthly inflation

rate dropped from about 31% in June to about 12% in August that year.

However, the exchange rate of the Zimbabwe dollar drastically fell against the US

dollar and the government replaced it with the new Zimbabwe gold currency in April

2024. Since its introduction, the currency’s value has been cut in half.

A ‘drop in the ocean’

Lyle Begbie, an economist with Oxford Economics Africa, believes the sale of the gold

coins when they were introduced in 2022 was more of a revenue-generating scheme,

as it happened at a time when inflation was very high.

He says it makes sense that the recent sale of gold coins was influenced by the

increase in gold prices on the global market. But he adds that the value of gold coins

was too little to have an impact on the economy. Begbie says the US$12.8 million in

coins the central bank reported selling is less than 1% of Zimbabwe’s gross domestic

product — which the World Bank estimates at US$44 billion — a “drop in the ocean”

when it comes to the country’s macroeconomic picture.

Prosper Chitambara, an economist based in Harare, agrees the impact of the recent

sale was minimal. He says gold coins don’t have a significant impact on currency

stability in an economy like Zimbabwe’s, which is highly informal and also highly

dollarized — meaning it’s heavily reliant on the US dollar as a currency.

“Most economic agents in our economy prefer to transact using their US dollars

because it’s a highly tradable and highly liquid asset. … So there’s a huge confidence

and trust in the USD than in the gold coins or even in the Zimbabwe gold,

”

Chitambara says.

Samuel Wadzai, the executive director of Vendors Initiative for Social and Economic

Transformation, an organization in Harare that advocates for the informal business

sector, says there have been a few instances where members have tried to use gold

coins for everyday transactions, but it hasn’t been widespread.

“Most traders still prefer cash due to the challenges of acceptance and the limited

understanding of gold coins in everyday trade,

” he says.

Isheanesu Kwenda, 31, a Harare street vendor with a sociology degree, says the recent

sale of gold coins didn’t offer any benefit for him. Like many Zimbabweans, he has

heard about the gold coins, but has never seen or opted to buy them. The vendor is

part of Zimbabwe’s informal economy, which sustains over 80% of Zimbabwe’s

population and contributes nearly 72% to the country’s GDP.

“Street economics informs that you should not attempt to get something you are not

sure of or do not understand. … I prefer to sell my goods and keep my money in US

dollars because it holds value, or I can keep my money in stock,

” Kwenda says of theclothing he sells.

Last year, Kwenda lost more than half his earnings after Zimbabwe gold was

introduced. After being paid the equivalent of US$1,000 in Zimbabwe dollars, he only

managed to salvage US$360 and lost the rest in exchange rate losses.

For Kwenda, restoring confidence is simple: The government must stick to a plan,

without making sudden U-turns

This story was originally published by Global Press Journal

BY NOKUTHABA DLAMINI 

A historic installation ceremony is set to take place on Friday, as Silibaziso Mlotshwa, daughter of the late Chief Mvuthu, Nyangayezizwe Mlotshwa, is scheduled to take over as the new chief.

The installation comes after a prolonged dispute over the chieftaincy, which had been held up since Chief Mvuthu’s passing in 2014.

According to Paulos Ntini, the Prosecutor General at the Mvuthu’s monarchy, preparations for the ceremony are underway. “Preparations are going on well. So far, the road has been graveled to the homestead, and on Thursday, all the village heads, including myself, will be collecting gifts from the villagers for the ceremony,” he said.

The late Chief Mvuthu’s family had initially nominated his brother, Sanders Mlotshwa, as the successor in December 2014. However, Silibaziso challenged this decision in court, arguing that she was the rightful heir to the throne.

The dispute had resulted in Headman Bishop Matata Sibanda acting as the chief until now.

Chief Mvuthu was a respected traditional leader in Matabeleland North and chaired the Hwange Community Share Ownership Scheme. He was also a retiree of Hwange Colliery Company, having left his job in 2008 to take over the chieftaincy.

BY STAFF REPORTER 

Hwange Colliery Company Limited has announced that its Alcohol Monitoring Program will officially resume on Wednesday, across all areas.

According to a memo , the program is a critical part of the company’s commitment to safety, health, and productivity. It is implemented in line with the company’s workplace policies and legal obligations.

The memo stated that ensuring a substance-free work environment, especially in high-risk areas, is essential to the wellbeing of all employees and the overall performance of the organization.

All employees are expected to comply fully with the requirements of the program. Testing will be conducted randomly and routinely as stipulated in the Alcohol & Drug Monitoring Procedure (SHEQP 2.09).

The memo also warned that appropriate disciplinary procedures will apply in cases of non-compliance or policy violation.