By Kelvin Wilson Kasiwulaya
Small to Medium Enterprises( SMEs) operating in the City of Gweru are urging the Reserve Bank of Zimbabwe (RBZ) to expedite the availability of the Zimbabwean Gold (ZiG) Currency, as they face the risk of business collapse due to the current conversion rates.
On Friday, the central bank set the foreign exchange rate at US$1 to ZWL33,903 and US$1 to ZiG13.5616.
Previously, these businesses had been using a locally conjured convenience rate of 6000 Zimbabwean dollars (ZWL) to one US dollar (USD) as a workaround for the liquidity crunch and lack of ZWL notes. However, they have recently learnt that, the conversion rate at banks would be pegged at ZWL33,903 to $USD 1
Based on the central bank’s conversion formula which involves dividing the interbank forex rate into ZWL by the foreign currency exchange rate into ZiG, $ZWL6000 is now equivalent to US$0.17644 or ZiG2.40, a great US$-ZiG balance shrink for Gweru SMEs.
The businesses are concerned that adhering to the new conversion rate before the ZiG currency becomes available on April 30th will cause prices to skyrocket, as they will have to adopt the current ZiG -ZLW conversion rate, additionally, finding enough bond notes for change will prove challenging. as if that is not enough the SMEs are unable to switch to using ZiG currency for pricing purposes, as it is not yet accessible.
Commenting on the matter , Mr Wilson Mangwiro a Tuckshop owner in Mtapa Section 6 said”If we try to meet the conversion rate between now and April 30th, prices will soar due to the interbank rate. Moreover, finding the required bond notes for change will be extremely difficult. We can’t switch to ZiG currency yet, so we are stuck in a difficult situation.”
Another business owner from Mambo Mrs Ruth Gomo shared her concerns, stating, “We were relying on the local exchange rate to keep our businesses running smoothly. The sudden switch to the interbank rate has left us in a precarious position. We need the RBZ to intervene and expedite the availability of the ZiG currency.”
Ordinary people in Gweru are also feeling the impact.Mr Emmanuel Mashamba a shopper at Mtapa Market expressed their dismay, “Prices have already started increasing, and it’s becoming difficult for us to afford basic necessities. We hope that the RBZ will address this issue promptly and provide a solution that doesn’t burden the common citizens.”
In response to the growing concerns, RBZ Governor John Mushayavanhu issued a press statement. He assured the public that progress has been made in converting ZWL balances into ZiG balances, and this conversion process will continue until April 12th for all economic sectors. Mushayavanhu emphasized that the new currency will start circulating on April 30th, allowing for an intensive educational and awareness campaign on the security features of ZiG notes and coins.
The RBZ Governor urged the public to exercise patience during this transitional period, assuring them that all necessary steps are being taken to ensure value preservation and transactional convenience. He also called on the banking sector, business community, and the rest of the economy to adapt to the new normal smoothly.
As Gweru businesses and ordinary people anxiously await the availability of ZiG currency, they hope that their pleas to the RBZ will be heard to prevent further economic instability and the collapse of local enterprises.