Explosive Interview: RBZ Governor Dr John Mushayavanhu Details Potential Future for Fuel Sales in ZiG

Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mushayavanhu has explained the potential future of fuel sales in ZiG.

The Public Warming Up To The ZiG

It has been almost a month since the central bank chief announced the Zimbabwe Gold as the replacement for the worthless Zimbabwe Dollar. On Tuesday, the Bank poured the new notes into the market to complement the US dollars.

As of May 2, 2024, US$1 is worth 13.4190 ZiG, according to Zimpricecheck.comZimpricecheck.com. On the black market, the ZiG is trading at 18 against the “green like.”

Because of the scarcity of the USD in the formal money market for retailers, some are using the 14.5 rate for the ZiG.

Trust Issues Against The New Currency

Introducing a new currency poses the potential for convenience. US$0.50 in ZWL could not fit inside the pocket, as inflation had wretched the old currency .

However, the public bashed the ZiG when Dr Mushayavanhu said traders would continue selling fuel in US dollars. Taxes, passport fees and other essential government services run on US dollars. In one classic example, a Monetary Policy Statement breakfast meeting explaining the ZiG had attendees paying in USD. The organisers scurried to correct the PR disaster after a public outcry.

ALSO READ: Reserve Bank Governor Explains Why He Won’t Force Fuel Stations to Accept ZiG

The shunning of ZiG for taxes, passport fees and fuel sales made some question the value of the ZiG.

RBZ Governor On The Future Of Fuel Sales In ZiG

Dr Mushayavanhu was on Star FM yesterday, and listeners were furious. Civil servants getting 100% ZiG salaries, tenants paying rentals in USD and motorists buying fuel in forex asked the Governor where they will get the greenback when banks have no USD and the ZRP is arresting money changers.

ALSO READ: Zimbabwe Dollar (ZWL) Still Legal Tender, No Longer Expiring

Without revealing an absolute plan to make dealers sell fuel in ZiG, Dr Mushayavanhu explained the possibility:

“Currently, we are operating in an environment where 80% of the transactions are in US dollars and 20 percent in ZiG, so we are going to gradually allow a situation where we move from 80-20 to 70-30 to 60-40 to 50-50 as we go along and move towards 2030.

“As we do that more and more, products will be sold in the local currency, but beyond that, I want to say to those people refusing to sell their products in ZiG that they will find themselves in a situation where they will be hunting for this ZiG but will not be able to find them.”

The Governor added that the Government will armtwist businesses to pay part of their taxes in ZiG:

“If you recall Government said that in the June QPD (Quarterly Payment Date), they want 50 percent of taxes to be paid in ZiG so if you are a taxpayer and you are selling all your goods in US dollars, where are you going to get the ZiG to pay the tax?

“And when you then want to buy it from the market, it will be expensive. So, I am just warning them, if I were a fuel dealer I would sell some of my fuel in ZiG now so that I have enough money to pay tax when it falls due.”

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