Econet joins the many Zimbabwean businesses changing over to the ZiG

Econet joins the many Zimbabwean businesses changing over to the ZiG

Among the many businesses dealing with Zimbabwe’s attempt to move to a new currency last Friday was operator Econet, which last weekend said it was preparing its systems to allow trading in the new currency.

It suspended trading in Zimbabwean dollars to facilitate the changeover to the new ZiG currency on its various product platforms.

However, its statement said: “Customers can still purchase all our products and services in US dollars, using our normal sales and distribution channels.”

Bundles bought before the Zimbabwe dollar currency suspension will continue to be available for use until they either expire or are used up by the customer. The main account balance will be converted to ZiG at the going rate during the ongoing transition.

Econet joined hundreds of businesses – including banks and several retailers across the country – that issued statements to their customers last weekend notifying them of their transition to the new currency.

The AFP news service reported a chaotic start to the first day of official trading of the ZiG – short for Zimbabwe Gold. On Saturday, the central bank said new banknotes were still being printed and would become available on April 30. The old banknotes are worthless.

The central bank hopes the ZiG, which is backed by a basket of reserves comprising foreign currency and precious metals – mainly gold – would help stabilise the economy.

The UK's Financial Times newspaper says the ZiG will have an initial value of 13.56 to the US dollar. Whether Zimbabwe’s ruling Zanu-PF will continue to print money to pay for spending and to reward allies – a major reason for the previous currency’s collapse – remains to be seen.

The FT adds that there is a widespread lack of trust from ordinary Zimbabweans who have seen purchasing power and savings wiped out by years of turmoil. Nor is this the first attempt to introduce a new currency. Thus, many Zimbabweans prefer to keep their money at home.

Meanwhile, as Econet's comment about US dollar purchases implies, the US dollar is likely to remain the most trusted currency until and unless the ZiG establishes itself.