It is a well-known fact that the “Safe Haven” for any wealth for investors is Gold and luckily Zimbabwe has gold, plenty of it. Unlike other volatile minerals, Gold serves as a reliable store of wealth, consistently maintaining its value throughout history.
Unlike paper currencies, which can lose value due to inflation or economic turmoil, gold’s intrinsic worth endures and that has been proven for centuries.
In the case of Zimbabwe, our Motherland, we have our local currencies which haven’t been lucky leading to the transacting public preferring a much more stable currency (the US$).
Even after the introduction of the new currency – ZiG, by the Reserve Bank of Zimbabwe (RBZ) Governor, the US$ will likely remain the currency of choice since one still has to sell the new currency to buy the greenback to pay for necessities like fuel. This means the illegal Money-changing business will go on as motorists frequently and quickly need to get USD for travel.
As the ZiG (and or the structured currency) introduction debates rage on what must not be ignored is the fact that people have seen multiple new currency introductions and these have always had the same fate.
Whilst the new governor is doing all he can to instil confidence, the public has been here before so it takes more than just paper money to convince Zimbabweans that the ZiG will work.
Our Paper money and the so-called “transfer” do not have a successful track record therefore the public confidence level may be low. Confidence level however would have been much higher if the country was introduced to something new and solid, GOLD. How, one may ask?
The government can introduce smaller denominated gold coins ranging from 1 cent to 20 dollars which have gold worth the currency displayed. These should be pegged with the going rate of the international market Gold price.
Public reaction to an actual gold currency would have been a lot different if the governor had told the nation “Now we transact in gold”. Such an announcement would have instilled instant and unquestionable confidence – who wouldn’t want to have gold in their possession? Fuel stations would accept the currency because it’s gold! Even Gogo from Chirasavana would love to have coin because “It’s Gold, it’s valuable!
Even the appetite to have the hard US$ currency would likely die down.
Currently, Zimbabwe has higher-denominated gold coins which are minted by Fidelity Gold Refinery (FGR). These have performed extremely well. Their price is determined by the international market rate for an ounce of gold, plus five per cent for the cost of producing the coin.
However, for the country to have millions of coins containing gold in circulation, we need gold, lots and lots of it. It may take years to achieve such a fit however stability is guaranteed, history proves it.
One may ask what about the ZiG digital tokens and my answer is as long as Mbuya Goto from Makande or Gogo Sithole from Lupane, or Hwindi plying Mbare to Town route have never transacted or used them they have no effect whatsoever on the broader economy of Zimbabwe.
Coins are heavy one may say, BANK them!
This is an opinion piece
