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Govt pleads with miners to ramp up gold output to support ZiG currency

Zimbabwe holds rates steady at 20 percent as new ZiG notes hit the streets

HARARE — Zimbabwe has asked gold miners across the country to ramp up output to support the ZiG currency launched last month, according to Mines and Mining Development Minister Winston Chitando.

“This new currency is anchored on gold production, we have to determine ways to increase production,” Chitando said Monday in a meeting with miners in the capital, Harare.

Zimbabwe has been accumulating gold reserves at the central bank’s vaults to back the ZiG, short for Zimbabwe Gold. The ZiG is backed by 2.5 tons of gold and $100 million. It’s the nation’s sixth attempt to have a functioning local currency in 15 years.

Since late 2022 miners have been ordered to pay a part of their royalties to the state partly in commodity and cash, to help increase reserves.

To help boost production, the government will encourage artisanal and small-scale miners to produce more gold with medium- and large-scale miners, Chitando said. “At this stage, production from medium- to large-scale miners for the first quarter was higher from same period last year,” said Chitando. — Bloomberg

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Zimbabwe’s ZiG crackdown prompts street traders to switch to WhatsApp

Zimbabwe’s street currency traders are abandoning their regular spots in city centres for messaging platform WhatsApp to evade arrest as the central bank and police crackdown on the unofficial market blamed for contributing to currency crashes.

The clampdown is the latest move to defend the new gold-backed currency, the ZiG, from being undermined by the traders who deal in US dollars.

Authorities have accused them of collapsing the defunct Zimbabwean dollar, which the ZiG, short for Zimbabwe Gold, replaced on April 5. When the unit was abandoned, it had lost more than 80% of its value against the dollar on the unofficial market this year.

Also read: South Africa’s Top Court Bars Jacob Zuma from Running for Parliament in Upcoming Election

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The dealers, who were briefly put out of business by the switch from the Zimbabwean dollar to the ZiG as banks and mobile-money operators struggled to convert their systems into the new currency, have roared back to life in recent days.

Arrests have also increased, forcing traders to use the Meta Platforms Inc.-owned messenger service to conduct transactions with clients they trust.

On Wednesday, a dollar could be exchanged for 17 ZiGs on the platform, compared with 13.40 on the official market.

Some 224 street traders have been arrested across the country under the ongoing blitz, according to police statistics provided to the state-owned Herald newspaper.

The daily publication reported Wednesday that the central bank’s financial intelligence unit has also frozen 90 bank accounts suspected of illicit transactions and fined more than 40 individuals for violation of exchange-control regulations.

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