WHEN IN A HOLE, STOP DIGGING: ZIMBABWE’S NEW CURRENCY IS IN TROUBLE

There is a popular saying: “When you are in a hole, stop digging.” This simple advice is now perfect for the problems of Dr. John Mushayavanhu, the new Governor of the Reserve Bank of Zimbabwe. At a time when Zimbabwe needs smart and careful leadership, Mushayavanhu seems to be making things worse with how he is handling the new Zimbabwe Gold (ZiG) currency.

The ZiG was introduced on April 8, 2024. From the beginning, it faced problems. The biggest one is the things Mushayavanhu keeps saying in public. One big statement he made was that past claims that bond notes were backed by a US$200 million African Export-Import Bank facility were lies. This shocked many people. It raised questions about whether the Reserve Bank has been lying to Zimbabweans for years. If what he said is true, then the Reserve Bank has no credibility. If it is false, then Mushayavanhu himself is making things up.

The bond notes story has made people suspicious. Some insiders say the US$200 million deal was real, but it failed because of bad government policies. Investigative journalists from The NewsHawks are still digging to find out the truth.

Then came another shocking claim: Mushayavanhu said the World Bank helped Zimbabwe create the ZiG currency. He said that Zimbabwe didn’t know much about creating a “structured currency,” so they got a World Bank consultant to help. This was meant to make the ZiG look good. But it could cause big problems. If the World Bank denies being involved, Mushayavanhu’s reputation will be damaged, and trust in ZiG will fall even more.

These statements have created confusion. Instead of helping the new currency, they have made things worse. People are asking: is ZiG really backed by anything? Or is it just another version of the Zimbabwe dollar, which lost its value years ago?

Mushayavanhu also promised there would be no printing of money under his leadership. This is hard to believe because the ruling Zanu PF government is known for printing money to fund its spending. Many people think this promise won’t last long, especially with elections, drought, and debt all putting pressure on the economy.

The ZiG is supposed to be backed by gold and foreign currency. But Zimbabwe only has about 2.5 tons of gold and US$285 million in reserves. This is a small amount for a country that says it wants a strong new currency. Most people in the market don’t believe these reserves are enough.

Mushayavanhu has spoken many times in public to defend the ZiG. But his words have not been convincing. People still remember bond notes, bearer’s cheques, and other fake money that lost value quickly. The ZiG looks and feels like another bad idea.

So far, the ZiG has not changed much. Prices are still high, and people still prefer to use US dollars. Some stores are not accepting ZiG, and many Zimbabweans are not confident in the new currency.

The truth is that Mushayavanhu is making the situation worse. He should stop making risky statements. He should stop blaming others, like the World Bank. He should stop acting like Zimbabweans will believe anything just because it is said with confidence.

Zimbabwe has been through too many failed currencies. People are tired. They want a real solution. Not another lie. Not another fake currency.

In the end, Governor Mushayavanhu must listen to the old advice: when in a hole, stop digging. If he doesn’t, both he and the ZiG may sink deeper. And Zimbabweans, as always, will be left paying the price.