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Zim looking to kick-start its currency

Author: Staff Reporter Updated: 11:00 26-01-2018

Zimbabweans could soon be witness to a veritable re-start of their country, following a statement made by new president, Emerson Mnangagwa, in which he explained that new gold and diamond reserves would be utilised in order to relaunch the country’s own currency.

In 2009 the country abandoned the Zimbabwe dollar due to an economic collapse. Exports slumped and international investors withdrew credit lines leaving the then ridiculed country to suffer an inflation surge of about 500 billion percent, according to the International Monetary Fund (IMF). The emergence of 100 trillion-dollar notes in the country became less of a joke, the more popular they became.

In Mnangagwa’s own words, the point of no return had been reached with the blatant mismanagement of resources. Yet, it seems that the new administration will be changing the tune.

“We are a country that is endowed with minerals, like gold and so on. The one school of though is that we must have 10% of our gold used to build our reserves and the same for diamonds”, said Mnangagwa.

For now, the process is a slow one and the country is surviving thanks to the use of a basket of currencies dominated by the US dollar which stabilised the currency in 2009. While in 2016, the introduction of bond notes was welcomed to mitigate the impending shortage of cash which had resulted.

People are currently only allowed $40 a week in hard currency or bond notes from the various banks in the capital of Harare, while ATMs seldom work.

Zimbabwe has the world’s second largest platinum reserve after South Africa. It also has deposits of chrome, iron ore, coal, diamonds and gold.

Yet, Mnangagwa has not limited himself to resolving inherited issues.

He has recently continued to purge loyalists of the former president, Robert Mugabe, while attempting to appeal to farmers and previous white and black land-owners who ran away from the country in the late 80s and early 90s to return and invest in the “new Zimbabwe”.

The world, at this moment, can only wait and see.

Published: 12:33 25-01-2018

Posted by on January 25, 2018.

Categories: World News

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Updated: 22:37 21-May-2018