Authorities overlooked the fact that it could take longer for banks to switch to Zimbabwe Gold (ZiG) transactions when the new currency was introduced two weeks ago, triggering glitches that grounded payments, including to the tax agency, the Reserve Bank of Zimbabwe governor, John Mushayavanhu has said.
Officials also disclosed at the post monetary policy breakfast organised by Alpha Media Holdings that the switchover was also affecting the Zimbabwe Revenue Authority (Zimra), leading to some businesses refusing to transact in ZiG.
The ZiG was introduced following the rapid depreciation of the Zimbabwe dollar (ZWL).
Responding to questions about problems that industries have encountered since the introduction of ZiG, Mushayavanhu said sanity had returned and that banks were now operating normally, with transactions going through.
“I need to say we may have taken it for granted that converting to a new currency was simply a case of converting ZWL (Zimbabwe dollar) by a factor of 2 500 and the problem is done,” Mushayavanhu said. “We realised that it was a complicated process especially for banks as they use core banking systems that are sold to them by vendors. It is only the vendors who can give you the conversion scripts,” the RBZ chief noted.
He said banks were currently converting thousands of Zimbabwe dollar account balances and loans to the structured currency.
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“It was a nightmare, when you look at simple things like a loan or an overdraft. You cannot do a wholesale conversion of loans because each loan is a separate contract that is going to be looked at. So, imagine if a bank has got 100 000 loans and you are revisiting each loan as a contract, it's a complicated process. But I am pleased to say as we speak now, all the banks are alive. There may be one or two things that they still want to fine tune, but they are alive,” he added.
He said he would be engaging Zimra to see how the conversion process was progressing.
Mushayavanhu was responding to Busisa Moyo, chief executive officer at United Refineries, who indicated that businesses were not accepting ZiG as the taxpayer’s system was “not in line”.
“We are in a very difficult situation and what choice do we have? ZiG is here,” Moyo, said.
“I think from a practical point of view, governor, the reality is that today we can't accept ZiG for our business today because Zimra is not ready,” he said.
“So even if we were going to sell cooking oil in ZiG, it is not practically possible because the Zimra system is not yet in line.”
Commenting on restoring the public’s confidence in the local unit, the RBZ boss noted that rebuilding trust would require the apex bank to adhere to its core mandate.
“It is us who must rebuild that confidence. And the way we build that confidence is by walking the talk. You cannot legislate confidence. It is not possible. Even if you go around beating up people, they will still not be confident if you do not walk the talk,” Mushayavanhu said.
When the new structured currency was launched, banks and retail outlets temporarily suspended operations leaving the public in limbo.
However, most banks and retailers are now conducting business in the new currency but some businesses were still facing difficulties.
The central bank has pinned its hope on the new currency which it expects to stem the tide of hyperinflation.
ZiG notes and coins will be rolled out on April 30.
After a decade of dollarisation, a local currency, the ZWL, was reintroduced in 2019, but it collapsed in under five years from hyperinflation before it was replaced by the ZiG on April 5.
The rapid devaluation of the ZWL accelerated this year, by 74% in the first quarter alone, forcing some firms to reject the currency in favour of the US dollar.