MPs demand explanation from Mthuli Ncube

WEDZA North MP Itai Ndudzo has formally demanded that Finance Minister Mthuli Ncube provide a ministerial statement addressing the recent devaluation of Zimbabwe's new gold-backed currency, the Zimbabwe Gold (ZWG). This request came during a point of national interest in Parliament on Tuesday, where Ndudzo expressed deep concerns over the currency's significant loss of value, which exceeded 40% last week.

Introduced in April, the ZWG faced mounting pressures from the market for the Reserve Bank of Zimbabwe (RBZ) to adopt a more realistic exchange rate. The devaluation has raised questions about the credibility and backing of a currency purportedly secured by gold, especially given the current global rise in gold prices.

"It is imperative for the Hon. Minister of Finance to bring a ministerial statement before this august House to explain the serious incongruity: how is it that a gold-backed currency devalued by 44%, even though the price of gold per ounce has seen a phenomenal increase in global markets?" Ndudzo questioned, highlighting the discrepancy between the ZWG's devaluation and the rising price of gold, which surged from US$2,350 per ounce in April to US$2,648 per ounce in September.

Ndudzo further insisted that Minister Ncube outline the interventions being implemented by both monetary and fiscal authorities to safeguard Zimbabweans, particularly vulnerable groups such as pensioners, war veterans, and civil servants, who have been hardest hit by the abrupt currency devaluation. Many of these individuals are paid in local currency, making them particularly susceptible to the economic fallout.

"Zimbabweans need clarity on the measures being taken to create demand for our local currency in all domestic transactions and the roadmap being pursued towards the ultimate goal of having our local currency as the sole legal tender in Zimbabwe," he added.

At the ZWG's launch, the currency was pegged at a rate of 13.54 ZWG to US$1, with RBZ governor John Mushayavanhu assuring the public that it would be fully backed by reserves, including gold and foreign currency.

Echoing Ndudzo's concerns, Marondera Central MP Caston Matewu expressed his intention to raise the same issue, urging Minister Ncube to urgently address Parliament regarding the sudden collapse of the currency. The ZWG's devaluation has once again shaken confidence in Zimbabwe's currency system, adding to the country's long history of failed currency experiments over the past two decades.

In a related development, President Emmerson Mnangagwa is scheduled to deliver his State of the Nation Address (SONA) on Wednesday, where the currency crisis is expected to be a focal point of discussion. As Zimbabwe grapples with its ongoing economic challenges, the demand for transparency and effective measures to stabilize the local currency remains paramount.