ZCTU condemns Structured Currency ; fears citizens could lose out on savings and investments.

Staff Writer

THE Zimbabwe Congress of Trade Unions (ZCTU) has expressed fears of further losses for workers’ investments and savings with the introduction of a new currency.

The labour body has accused the government of introducing policies without carrying out exhaustive due diligence and consultations which has prejudiced the ordinary citizens in the past.

In a press statement, the ZCTU expressed reservations about the effectiveness of these measures on how they are going to improve the economy.

“The 2024 Monetary Policy Statement (MPS), unveiled by the new Reserve Bank of Zimbabwe (RBZ) Governor, Dr. John Mushayavanhu on Friday, April 5, 2024, comes at a time when the country’s economy has been facing severe macroeconomic instability, characterized by significant depreciation of the local currency and chronic high inflation. This inflationary pressure is a result of both volatile exchange rate developments and unsustainable growth in the money supply,” Japhet Moyo, Secretary General of ZCTU.

ZCTU also questioned the high inflation on the local currency that Zimbabwe is experiencing as this shows no confidence in the currency.

“Confidence in a currency is closely related to inflationary developments and the trust placed in the managing institution. The chronic high inflation experienced in Zimbabwe has eroded the value of the local currency and resulted in a significant loss of confidence among economic agents. The ZCTU highlights that the unsustainable growth in the money supply and the consequent depreciation of the local currency have been major contributors to the chronic high inflation,” said Moyo

The ZCTU questioned the readiness of RBZ reserves in supporting the ZiG.

“Reserves play a crucial role in supporting a country’s currency by providing liquidity, stabilizing the exchange rate, and maintaining confidence in the economy. The current reserves held by the RBZ, amounting to US$100 million in cash and 2,522 kilograms of gold (equivalent to US$185 million), might be grossly inadequate to fully back the local currency component of reserve money, which stands at ZW$2.6 trillion, requiring US$90 million in gold and cash reserves. The country would ideally need import cover of up to US$4.3 billion to sustain the ZiG, based on the Southern African Development Community (SADC) convergence criterion, which specifies up to six months of imports. Therefore, the ZCTU raises concerns about the adequacy of the current reserves to support the ZiG,” said Moyo.

“We have been there before- from agro bonds, bearer cheque, bond notes, RTGS, Nostrol, ZWL, to Gold coins among other attempts to improve the economy and tame inflation to no avail. Once beaten, twice shy. As most Zimbabweans are aware, since independence in 1980, Zimbabwe has implemented no less than 30 economic blueprints and these blue prints have dismally failed to extract ourselves from the problems the country is facing. In the process, Zimbabweans and workers have lost everything they have worked for their entire life – from pensions, insurances policies and savings,” said Moyo.

Moyo said labour feels like the “structured currency” is one of the numerous ways in which Zimbabweans are being ‘fleeced’ by high sounding promises that come to naught.

Moyo said what is more worrying to labour is this lack of consultation on serious policy issues arguing there is nothing to lose but everything to gain in national ownership of programmes.

He urged government to coordinate policy formulation, with effective stakeholder participation to engender national ownership of policies and programmes.

“How can government approve such a fundamental policy on currency without stakeholder participation and ownership? What is then is the purpose platforms like the Tripartite Negotiating Forum (TNF),” queried Moyo.