HARARE,
ZIMBABWE
—
With
the
price
of
gold
up
globally,
the
Reserve
Bank
of
Zimbabwe
in
April
put
the
gold
coins
it
stopped
minting
a
year
earlier
back
on
the
market.
But
interested
investors
had
to
act
fast.
By
mid-June,
the
sale
of
coins
from
its
accumulated
stock
was
abruptly
concluded
and
another
chapter
of
the
currency
chaos
that
has
characterized
the
nation’s
economy
for
decades
was
in
the
books.
This
time,
at
least,
economists
say
the
experiment
had
little
effect.
The
short-lived
sale
is
just
the
latest
example
in
a
long
line
of
inconsistent
policies,
says
Ithiel
Mavesere,
a
lecturer
in
the
economics
and
development
department
at
the
University
of
Zimbabwe.
Storing
value
in
a
gold
coin
is
not
a
viable
option
for
the
majority
of
the
population,
he
adds.
“Ideally,
what
they
should
have
done
is
come
up
with
low-value
coins,
with
denominations
as
low
as
equivalent
to
US$20
for
the
majority
of
the
population
to
afford,”
Mavesere
says.
However,
Reserve
Bank
of
Zimbabwe
Governor
John
Mushayavanhu
says
in
a
written
response
to
Global
Press
Journal
that
the
gold
coins
were
effective
as
an
alternative
investment
instrument
and
there
was
huge
demand
from
both
corporations
and
individuals.
According
to
RBZ
data,
corporations
bought
about
79%
of
the
gold
coins
and
individuals
bought
about
21%.
About
US$12
million’s
worth
sold
The
lowest
denomination
of
the
coins
represents
a
tenth
of
an
ounce
of
gold,
equivalent
to
9,299.13
in
Zimbabwe
gold,
or
ZiG,
the
national
currency,
or
about
US$347.
The
highest
denomination
of
the
coins
represents
one
ounce
of
gold,
equivalent
to
ZiG
92,991.34
or
about
US$3,470.
In
all,
the
central
bank
has
sold
gold
coins
worth
ZiG
343
million,
or
about
US$12.8
million,
according
to
Mushayavanhu,
who
says
the
recent
sale
happened
after
the
bank
noted
increased
demand
following
the
rise
in
international
gold
prices.
“In
this
context,
the
Reserve
Bank
re-issued
an
accumulated
parcel
of
gold
coins
from
a
combination
of
gold
coins
which
had
been
bought
back
from
the
market
through
redemptions
and
some
coins
which
were
still
being
held
at
the
Reserve
Bank
from
the
previously
minted
stock,”
the
governor
wrote.
A
statement
from
the
bank
in
mid-June
announcing
the
halt
to
the
sale
indicated
it
had
been
intended
to
clear
the
stock
of
gold
coins
it
had
and
those
that
had
been
cashed
in
by
their
holders.
Mushayavanhu
says
the
bank
stopped
minting
gold
coins
in
April
2024
to
prioritize
its
gold
reserve
which,
along
with
foreign
currency
reserves,
backs
the
Zimbabwe
gold
currency.
He
says
foreign
reserves
increased
from
US$270
million
in
April
2024
to
US$731
million
as
of
the
end
of
June.
The
central
bank
first
introduced
the
Mosi-oa-Tunya
gold
coins
—
which
share
an
indigenous
name
for
Victoria
Falls
—
in
2022
at
a
time
when
the
country
was
experiencing
currency
instability
with
high
inflation
and
continued
devaluation
of
what
was
then
the
national
currency,
the
Zimbabwe
dollar.
The
coins
aimed
to
reduce
dependency
on
the
US
dollar
and
help
stabilize
the
economy.
The
coins
helped
mop
up
excess
cash
in
local
currency
that
was
circulating
in
the
market.
Coupled
with
other
monetary
measures
in
2022,
the
monthly
inflation
rate
dropped
from
about
31%
in
June
to
about
12%
in
August
that
year.
However,
the
exchange
rate
of
the
Zimbabwe
dollar
drastically
fell
against
the
US
dollar
and
the
government
replaced
it
with
the
new Zimbabwe
gold
currency in
April
2024.
Since
its
introduction,
the
currency’s
value
has
been
cut
in
half.
A
‘drop
in
the
ocean’
Lyle
Begbie,
an
economist
with
Oxford
Economics
Africa,
believes
the
sale
of
the
gold
coins
when
they
were
introduced
in
2022
was
more
of
a
revenue-generating
scheme,
as
it
happened
at
a
time
when
inflation
was
very
high.
He
says
it
makes
sense
that
the
recent
sale
of
gold
coins
was
influenced
by
the
increase
in
gold
prices
on
the
global
market.
But
he
adds
that
the
value
of
gold
coins
was
too
little
to
have
an
impact
on
the
economy.
Begbie
says
the
US$12.8
million
in
coins
the
central
bank
reported
selling
is
less
than
1%
of
Zimbabwe’s
gross
domestic
product
—
which
the
World
Bank
estimates
at
US$44
billion
—
a
“drop
in
the
ocean”
when
it
comes
to
the
country’s
macroeconomic
picture.
Prosper
Chitambara,
an
economist
based
in
Harare,
agrees
the
impact
of
the
recent
sale
was
minimal.
He
says
gold
coins
don’t
have
a
significant
impact
on
currency
stability
in
an
economy
like
Zimbabwe’s,
which
is
highly
informal
and
also
highly
dollarized
—
meaning
it’s
heavily
reliant
on
the
US
dollar
as
a
currency.
“Most
economic
agents
in
our
economy
prefer
to
transact
using
their
US
dollars
because
it’s
a
highly
tradable
and
highly
liquid
asset.
…
So
there’s
a
huge
confidence
and
trust
in
the
USD
than
in
the
gold
coins
or
even
in
the
Zimbabwe
gold,”
Chitambara
says.
Samuel
Wadzai,
the
executive
director
of
Vendors
Initiative
for
Social
and
Economic
Transformation,
an
organization
in
Harare
that
advocates
for
the
informal
business
sector,
says
there
have
been
a
few
instances
where
members
have
tried
to
use
gold
coins
for
everyday
transactions,
but
it
hasn’t
been
widespread.
“Most
traders
still
prefer
cash
due
to
the
challenges
of
acceptance
and
the
limited
understanding
of
gold
coins
in
everyday
trade,”
he
says.
Isheanesu
Kwenda,
31,
a
Harare
street
vendor
with
a
sociology
degree,
says
the
recent
sale
of
gold
coins
didn’t
offer
any
benefit
for
him.
Like
many
Zimbabweans,
he
has
heard
about
the
gold
coins,
but
has
never
seen
or
opted
to
buy
them.
The
vendor
is
part
of
Zimbabwe’s
informal
economy,
which
sustains
over
80%
of
Zimbabwe’s
population
and
contributes
nearly
72%
to
the
country’s
GDP.
“Street
economics
informs
that
you
should
not
attempt
to
get
something
you
are
not
sure
of
or
do
not
understand.
…
I
prefer
to
sell
my
goods
and
keep
my
money
in
US
dollars
because
it
holds
value,
or
I
can
keep
my
money
in
stock,”
Kwenda
says
of
the
clothing
he
sells.
Last
year,
Kwenda
lost
more
than
half
his
earnings
after
Zimbabwe
gold
was
introduced.
After
being
paid
the
equivalent
of
US$1,000
in
Zimbabwe
dollars,
he
only
managed
to
salvage
US$360
and
lost
the
rest
in
exchange
rate
losses.
For
Kwenda,
restoring
confidence
is
simple:
The
government
must
stick
to
a
plan,
without
making
sudden
U-turns.