ZIMBABWE GOLD CURRENCY FALLS DESPITE GOLD PRICES RISING

Finance Minister Mthuli Ncube is facing questions from the people of Zimbabwe. The country’s local currency, Zimbabwe Gold (ZiG), has been dropping in value at an alarming rate. Many are confused because the ZiG is supposed to be backed by gold. Gold prices have been going up, so people expect ZiG to grow stronger too. But that is not happening. In fact, ZiG is now the worst-performing currency in the world.

Gold prices have been increasing throughout 2024. Since the beginning of the year, gold has gone up by 590.16 USD per troy ounce, which is a 28.61% rise. In September 2024, gold prices reached an all-time high of 2685.49 USD per ounce. This rise in gold value has puzzled many people. The logic of the ordinary person is simple: if gold is rising in value, then a currency backed by gold, like the ZiG, should also rise in value. Instead, the opposite is happening with ZiG losing more and more of its value.

People have been looking to Minister Ncube for answers. However, when asked why this is happening, he did not give a clear response. His explanations were not easy to understand, and many found them confusing. To make things worse, his poor Shona speaking skills made his explanations even harder for many people in Zimbabwe to follow. This left many more confused than before.

The main question people have is simple: if ZiG is backed by gold, why is it falling when gold prices are going up? Many Zimbabweans expected that with gold prices rising, their currency would be getting stronger. But instead, it is losing value, which has caused frustration. People rely on the local currency for daily trade and survival, so the constant drop in value affects everyone.

Ncube did not provide clear reasons why this is happening. In a normal situation, a currency that is backed by a strong commodity like gold should follow the same pattern as the commodity it is tied to. But the case with ZiG seems different, and no one is explaining why. Ncube’s attempt to explain was full of unclear statements that made it hard for people to understand what the real issue is.

The falling value of ZiG has a big impact on the lives of ordinary Zimbabweans. Every day, prices of goods and services go up as the currency loses value. This means people need more ZiG to buy the same things they could afford before. Basic goods become more expensive, and it makes life harder for those who earn in ZiG. Many people in the country are frustrated because they expected the currency to be stronger, especially now that gold is doing so well globally.

With gold prices increasing by over 28% this year, many feel that the government should have prepared better. Some believe that there is a deeper problem in how the currency is managed. Others think that perhaps the gold backing is not as strong as they were told. But without clear answers from the finance minister, no one knows for sure what the real issue is.

For now, the people of Zimbabwe are left in a tough situation. They rely on a currency that continues to lose value while the thing backing it, gold, is becoming more valuable. The people deserve answers, and so far, they have not been given any that make sense. Ncube’s failure to give a clear explanation only adds to the confusion.

It is not clear what will happen next with the ZiG. People will continue to demand answers from the government. They want to know what is happening with their money and what will be done to fix it. Until then, the struggle with the declining currency continues.