The Zimbabwe Chamber of Small to Medium Enterprises (SMEs) has called on the government to adopt responsible fiscal policies to prevent budget deficits that could exacerbate inflation, particularly in light of the introduction of a new gold-backed currency.

Wilson Waison

During a session with the Parliament Portfolio Committee on Budget, Finance & Investments Promotion, stakeholders gathered to discuss the implications of the new currency. Last Matema, the Official Financial Advisor of the Zimbabwe Chamber of SMEs, emphasized the necessity for the government to curb unnecessary spending to maintain confidence in the newly introduced currency.

Matema expressed the organization's support for the new currency, noting its potential to stabilize the economy. "The introduction of the gold-backed currency aligns with our SMEs Policy 2020-2024 goals, which include the formalization and capacitation of SMEs as well as job creation," he stated. He highlighted the stability that gold backing provides, which could be crucial in countering inflation that negatively impacts business operations.

The Chamber, representing over 75% of Zimbabwe’s businesses and contributing more than USD 8 billion to the national GDP, also stressed the importance of accessibility to the new currency, particularly for marginalized and rural communities. Matema urged the Reserve Bank of Zimbabwe (RBZ) to prevent exploitation by ensuring widespread distribution of the new ZiG notes and coins.

Further, he advocated for the formalization of artisanal miners to bolster the formal gold supply, which is essential for the currency's backing and overall success.

The session also saw contributions from other financial leaders who supported the currency's introduction. Lawrence Nyazema, President of the Bankers Association of Zimbabwe, revealed that banks have lent approximately US$1 billion from their nostro balances to support the productive sectors, emphasizing prudent financial management.

Sandra Musevenzo, the director-general of the Zimbabwe Association of Pension Funds, highlighted the potential benefits for pension preservation under the new currency system. "If implemented effectively, the gold-backed ZiG will not only preserve the value of pensions but also enhance the convenience for our pensioners, especially those in rural areas who rely on cash transactions," she explained.

The stakeholders collectively praised the central bank's initiative but stressed that the government should focus on policy measures rather than policing to ensure the currency's successful integration and sustainability in the monetary system