ZiG: Scars of the past linger, casting a shadow over its successful rollout

The cynicism expressed by the public is founded on the basis of history that left the banking publics’ savings depleted as a result of policies that had been instituted by the Reserve bank of Zimbabwe.

THE rollout of Zimbabwe’s new currency Zig has sparked a range of responses from the public, encompassing cautioned optimism and a great deal of scepticism.

The cynicism expressed by the public is founded on the basis of history that left the banking publics’ savings depleted as a result of policies that had been instituted by the Reserve bank of Zimbabwe.

It would appear that the generality of the public has been less concerned about the fact that ZiG is backed by 2 522 kilogrammes of gold valued at US$185 million and US$100 million in cash, and more about if the gold reserves are in existence in the first place, given widespread leakages in the gold industry that is well documented.

It must be emphasized that the relationship between citizens and their money is sacrosanct. It is a fundamental bond of trust that underpins the functioning of a society and its economy. Money is not just a medium of exchange, it represents the value of one's labour, time and resources.

When citizens entrust their money to banks or financial institutions, they do so with the expectation that it will be safe, secure, and accessible when needed.

This trust is essential for the smooth operation of the financial system and the economy as a whole. When value of money banked diminishes on the watch of those entrusted to keep it at the same value or even make it appreciate, trust is lost and will be difficult to restore. As a result, the ZiG has landed in an environment of mistrust, wariness, suspicion and doubt.

While some view the introduction of ZiG as a step towards economic stability and independence, others express concerns about its impact on inflation, purchasing power, and overall economic well-being. The divergent viewpoints underscore the need for a comprehensive dialogue among stakeholders to address these concerns and foster a shared understanding of the implications of the new currency.

But first, let us briefly trace the history of the loss of confidence in the introduction of new currencies in Zimbabwe.

Loss of trust in the banking system

Trust in the banking system is indeed akin to a fragile substance like spilled milk. Once it is lost, it is incredibly challenging to restore. Trust is built on a foundation of reliability, credibility, honesty, and integrity. When these attributes are compromised or absent, the public's faith in the system is shaken and rebuilding that trust becomes a Herculean task.

The erosion of trust in the banking system during the 10-year era of Gideon Gono as governor of the Reserve Bank of Zimbabwe (RBZ) up to November 20, 2013 when he stepped down.

This era serves as a poignant example of how fragile this relationship between the banking citizenry and the banking industry with the central bank at the top can be. Gono's tenure at the central bank was marked by a series of controversial policies and interventions that had far-reaching consequences for the country's financial system and its citizens.

One of the most notorious episodes during Gono's tenure was the widespread loss of money in individuals' accounts due to hyperinflation and the arbitrary revaluation of the Zimbabwean dollar. The hyperinflation crisis in Zimbabwe in the early 2000s was one of the worst in modern history, with prices doubling every day and the currency becoming virtually worthless.

As a response to this crisis, Gono implemented drastic measures such as printing money in large quantities, imposing price controls, and devaluing the currency.

These policies led to a situation where the value of people's savings and earnings rapidly evaporated, wiping out the life savings of many Zimbabweans. The loss of money in people's accounts not only had devastating financial consequences but also shattered the trust and confidence that people had in the banking system.

The sense of betrayal and helplessness experienced by ordinary citizens further deepened the rift between the public and the financial institutions that were supposed to safeguard their money.

Gono is on record indicating that he was working on the explicit instructions from his principals. He even wrote a book entitled, Zimbabwe’s Casino’s Economy – Extraordinary measures for extraordinary challenges, which accounts the Reserve Bank of Zimbabwe’s response to the casino ethic that had bedevilled the economy.

Banking is about the intangibles

Banking is not just about physical currency or transactions; it is essentially about intangibles such as trust, credibility, integrity and reputation.

Banks and financial institutions rely on the trust of their customers to function effectively. Trust is what enables individuals to deposit their money, take out loans and invest in financial products with the confidence that their interests will be protected and their assets will be safe.

When trust in the banking system is eroded, the consequences are far-reaching. People become wary of keeping their money in banks, leading to a loss of deposits and liquidity in the financial system.

This, in turn, can exacerbate economic instability, as banks struggle to meet the demands of their customers and maintain the flow of credit to businesses and individuals.

The scars of the past

The loss of trust in the banking system during Gono's tenure had profound implications for the country's economy. The collapse of the Zimbabwe dollar and the erosion of confidence in the financial sector contributed to a broader economic crisis characterised by hyperinflation, unemployment, and widespread poverty.

The scars left by that period continue to linger in the collective memory of Zimbabweans, shaping their attitudes towards the financial system and the government.

The introduction of a new currency, the Zimbabwean dollar (ZWL), in the form of the ZiG is a critical step in the government's efforts to restore stability and credibility to the country's monetary system. However, the compromised trust resulting from past failures and mismanagement poses a significant challenge to the acceptance and adoption of the new currency.

The success of a new currency depends not only on its physical attributes but also on the intangible factors of trust and confidence. If people do not believe in the stability and reliability of the currency, they will be reluctant to use it, leading to a lack of circulation and acceptance in the economy.

The compromised trust in the banking system and the government's handling of the economy in the past creates a significant barrier to the widespread adoption of the new currency.

Rebuilding trust in the banking system and the currency requires a concerted effort to address the root causes of past failures and to demonstrate a commitment to transparency, accountability, and good governance.

This includes implementing sound monetary policies, strengthening regulatory oversight, and fostering a culture of integrity and ethical conduct within financial institutions.

Most importantly, communication and education play a vital role in rebuilding trust and confidence in the financial system. The government and financial institutions must be transparent about their policies and actions, engage with the public to address their concerns, and provide clear information about the benefits and risks of using the new currency.

Zimbabwe government authorities are not in the habit of conducting consultations with the citizenry. The authorities believe in a top-down approach and over the past two decades, the introduction of new currencies, first the bearer cheques and then the RTGS/bond note have realised unintended consequences.

Without widespread stakeholder consultations, the ZiG might suffer the same fate. It defeats the whole purpose of buy-in to introduce the currency then try and persuade the public to buy into set unconvincing narratives. A stakeholder summit ought to have been held before the introduction of ZiG.

Going back to the drawing board

Stakeholder engagement is crucial in navigating complex economic transitions such as the introduction of a new currency.

By convening a stakeholder conference, the government, financial institutions, businesses, civil society organisations, and the general public can come together to exchange ideas, voice concerns, and collaboratively seek solutions that prioritize the interests of all involved parties.

Engaging stakeholders in a transparent and inclusive manner fosters trust, enhances decision-making processes, and promotes sustainable economic development. The key stakeholders ought to include the following:

Key stakeholders

Government: The government plays a central role in the introduction and management of the new currency ZiG. Engaging government officials in a stakeholder conference provides an opportunity to clarify policy objectives, address governance issues, and demonstrate accountability to the public.

Financial institutions: Banks and financial institutions are key stakeholders in the implementation of the new currency. Their participation in the conference can facilitate discussions on operational challenges, regulatory compliance, and financial stability in the context of ZiG.

Business community: Businesses are directly impacted by changes in the currency system, affecting pricing, transactions, and overall market dynamics. Involving the business community in the conference enables a dialogue on economic competitiveness, investment opportunities, and strategies for mitigating risks associated with the introduction of ZiG.

Civil society organisations: Civil society plays a critical role in advocating for the interests of marginalised groups, promoting transparency, and holding decision-makers accountable. Their participation in the conference ensures that diverse voices are heard and that the concerns of vulnerable populations are addressed in the currency transition process.

General public: Ultimately, the general public is the most important stakeholder in the introduction of a new currency. A stakeholder conference provides a platform for citizens to express their views, raise questions, and participate in shaping the future of the country's economic landscape.

Communication and transparency are essential components of rebuilding trust in the banking system and the new currency. The government and financial institutions must be open and forthcoming in their communications with the public, providing clear and accurate information about the state of the economy, the policies governing the currency, and the measures being taken to ensure its stability.

By engaging with the public in a transparent and inclusive manner, authorities can demonstrate their commitment to rebuilding trust and fostering a sense of accountability and responsibility.

Ultimately, rebuilding trust in the banking system and the new currency is a multifaceted and long-term endeavour that requires a comprehensive approach.

It is not enough to simply introduce a new currency or implement regulatory reforms - trust must be earned through consistent and ethical behaviour, transparency, and accountability.

Most importantly, every institution, particularly government institutions, in the country must use the new currency if it is to gain any confidence within the citizenry.

For example, you cannot arrest illegal forex traders for illegally trading in forex and when they are now paying fines at the police station, a law and order enforcement arm of government, the police station refuses to accept the fine in local currency.

The lessons learned from past failures and crises must guide the efforts to rebuild trust and confidence in the financial system, ensuring that the mistakes of the past are not repeated.


The relationship between citizens and their money is a sacred bond that forms the bedrock of a healthy and functioning economy.

Trust in the banking system is a critical component of this relationship, built on a foundation of integrity, credibility, and honesty.

When this trust is compromised, as was the case in the past, the consequences can be far-reaching and long-lasting.

While the introduction of a new currency such as the ZiG represents an opportunity to reset and rebuild the monetary system, its success ultimately depends on the ability of the government and financial institutions to earn back the trust of the public.

By demonstrating a commitment to good governance, ethical conduct, and transparency, authorities can begin the long and challenging process of rebuilding trust and confidence in the financial system, ensuring a more stable and prosperous future for Zimbabwe and its citizens.

It is not too late to engage the banking public in all its diversity and take into consideration their aspirations, fears and contributions.  That is why going back to the drawing board, without being defensive about it, is a logical first step in arresting the depreciation of ZiG. 

Ndoro-Mkombachoto is a former academic and banker. She has consulted widely in strategy, entrepreneurship and private sector development for organisations that include Seed Co Africa, Hwange Colliery, RBZ/CGC, Standard Bank of South Africa, Home Loans, IFC/World Bank, UNDP, USAid, Danida, Cida, Kellogg Foundation, among others, as a writer, property investor, developer and manager. — @HeartfeltwithGloria/ +263 772 236 341.

Related Topics