Zimbabwe’s cabinet has announced the approval of a plan to transition from using US dollars to the new gold-backed currency for transactions, the details of which will be presented by the country's Finance Minister, Mthuli Ncube.
“On modalities to operationalise the ZiG currency as legal tender for use in the economy, a dedollarisation roadmap is now in place,” said Information Minister Jenfan Muswere on Tuesday at a post-cabinet briefing held in Harare.
He added that the finance minister will present the timeframe for its implementation but did not specify when Ncube would make the announcement.
The southern African nation is attempting to reduce its heavy reliance on the Dollar, which has dominated economic activity for the past 15 years.
Currently, Dollars make up approximately 70% of all economic transactions within the economy, according to central bank data. When the gold-backed currency ZiG, or Zimbabwe Gold, was launched in April, Dollars were used in 85% of transactions, Bloomberg reports.
President Emmerson Mnangagwa suggested that the ZiG might become the sole currency as soon as 2026, ahead of the original 2030 deadline, a proposal that has received support from bankers.
In the meantime, authorities plan to increase penalties against individuals involved in “unjust price hikes, manipulation of the ZiG currency, smuggling, and all forms of unfair trade practices” to promote its use, Muswere stated.
Fines will be revised to range from a minimum of $200 to a maximum of $5,000, or the ZiG equivalent, he went on to say.
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