Staff ReporterA Zimbabwean lawmaker has called on the country’s finance minister to explain why the nation’s new gold-backed currency has dramatically lost value, despite rising global gold prices.
Itai Ndudzo, MP for Wedza North, raised the issue in parliament on Tuesday, requesting that Finance Minister Mthuli Ncube present a ministerial statement on the matter.
The Zimbabwe Gold (ZWG), introduced in April, lost over 40% of its value last week. This sharp decline has raised questions about the currency’s stability and its gold backing.
“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?” Mr Ndudzo asked.
The MP, who chairs the Parliamentary Legal Committee, pointed out that gold prices have risen from $2,350 per ounce in April to $2,648 in September.
Mr Ndudzo urged the finance minister to outline measures being taken to protect vulnerable groups, including pensioners and civil servants, who are paid in local currency.
“Zimbabweans need clarity on the measures being taken to create demand for our local currency,” he added.
The ZWG was initially pegged at 13.54 to the US dollar. The central bank governor had assured citizens it would be fully backed by reserves, including gold and foreign currency.
Another MP, Caston Matewu, supported the call for an urgent explanation from the finance minister.
The currency crisis is expected to feature prominently in President Emmerson Mnangagwa’s State of the Nation Address, scheduled for Wednesday.
