Zimbabwe's New Currency

 

Zimbabwe has introduced a new currency. The Zimbabwe Gold was introduced on April 5th. The motivation is to stop inflation and move away from the US dollar. This also is a way to circumvent sanctions imposed by the European Union and the United States of America. Zimbabwe's condition would improve if there were no attempts at economic warfare. The ZiG as it is known was not the first attempt at a new currency. Six attempts have been made since 2008. The gold currency might have a better chance of survival. Gold is still valuable and having a currency backed by it could  generate trust in the public. The majority of transactions continue to be done in US dollars. The difference now is that Zimbabwe according to its central bank has 2,1 tons of gold. Zimbabwe also contains diamonds. Natural resources are the key to economic stability and development. Getting membership to the New Development Bank could provide further solutions to economic challenges. Further changes have to be made if the multi-currency system is to be discarded. The 2019 ban on foreign currencies as legal tender was designed to challenge foreign influence in Zimbabwe's economic policy. Global market inflation forced Zimbabwe to reverse the policy in 2022. Zimbabwe has been under US sanctions since 2003. The European Council has renewed restrictive measures against Zimbabwe. the claim is that it is a mere arms embargo, but most EU countries do not want to do business with Zimbabwe. The direct development cooperation ceased and that directly effects the people of Zimbabwe. When a country is blacklisted by sanctions this makes other countries hesitant to invest. They fear retaliation from other powers. The world is gradually moving into an era of de-dollarization and Zimbabwe sees this as an opportunity. If the Zimbabwe Gold is successful other African nations might try to replicate a similar economy policy.