The long wait is over. The RBZ has announced that they started disbursing the new ZiG and notes to banks on Saturday 27 April 2024. Banks will then distribute the money to their ATMs and branches across the country, the hope is that people can start making withdrawals starting Monday 30 April 2024. In addition to the announcement, the RBZ also revealed the new ZiG withdrawal limits. These limits are as follows:
RBZ ZiG withdrawal limits and their USD equivalent on Wednesday, 8 May 2024
| Account Category | Weekly Limit | ZiG Weekly Limit in USD | Monthly Limit | ZiG Monthly Limit in USD |
|---|---|---|---|---|
| Individuals | 3 000.00 ZIG | US$219.53 | 30 000.00 ZIG | US$2 195.34 |
| Corporates | 30 000.00 ZIG | US$2 195.34 | 250 000.00 ZIG | US$18 294.51 |
| Schools, Hospitals, Clinics, Local Authorities | 30 000.00 ZIG | US$2 195.34 | 250 000.00 ZIG | US$18 294.51 |
| Government Ministries and Departments | 70 000.00 ZIG | US$5 122.46 | 300 000.00 ZIG | US$21 953.41 |
The limits appear generous at least at the time of writing. The table above will continue to show the current USD equivalent of these limits.
The Zimbabwean local currency is only used in about 20% of all transactions. The United States dollar which, along with a set of other currencies, was first adopted in 2009, dominates. The local currency, however, has an important role it plays in the economy. It is used to give out change by informal businesses.
The significant issue of providing change remained. Shops, vendors and kombis have struggled to provide change for everyday purchases. This caused significant disruption in the informal sector, where transactions are often less than US$1.To cope, some resorted to bartering or offering unconventional forms of change, such as sweets. Others created a complex system of mental ledgers, tallying transactions across different vendors to avoid needing change.
A rushed introduction
The new ZiG currency was launched like a bomb on 5 April. Banks and other Financial institutions were told to convert their ZWL balances to ZiG immediately. So the following week all banks and mobile money platforms were offline as they dealt with the conversation. Even though the smaller banks completed the transition early, the bigger banks own most of the point-of-sale machines. So even customers from the smaller banks couldn’t transact.
Initially, there were mixed messages about the legal tender status of bond notes, leading to uncertainty amongst businesses and the public. The RBZ said members of the public had until 26 April to convert their ZWL notes to ZiG. Then the Minister of Finance came along and said that ZWL notes would be legal tender until 30 April. It also seems like the RBZ had, the RBZ had not finalised the denominations of the coins to be minted, opting instead to delay their release and prioritise banknotes.
The end of cash shortages?
One of the reasons why the local currency fell out of favour was because of cash shortages. The Zimbabwean government was so determined to avoid giving the impression that they were printing excess money that the largest note before the introduction of the ZiG currency was officially worth less than US cents. This forced people to use the US dollar for most transactions because there were simply not enough ZWL notes for everyone. At first, people spend hours in line waiting for the note before simply giving up and going for the US dollar.
Will this end with the introduction of the ZiG? It is hard to tell. The government has been using words like “drip fed” implying that they will only release small amounts of notes and coins into the economy. The ZiG might be stronger on paper but unless people have ZiG notes they can use there will be limits to the usefulness of the currency. If the ZiG can solve the change problem it can be chalked up as a success.
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