It says it only offers policy advice to several
countries, member states like Zimbabwe
who have the prerogative or discretion to choose a currency of their choice.
This was in response to Reserve Bank governor John
Mushayavanhu’s claims that ZiG was the brainchild of the Bretton Woods
institution.
Mushayavanhu claimed that the World Bank was central to the
ZiG initiative through consultancy.
Now he is backtracking under pressure saying the World Bank
was not the architect of ZiG.
On 5 April, the apex bank introduced the Zimbabwe Gold
(ZiG), the country’s new currency which effectively replaced bond notes and the
RTGS.
During the
introduction of ZiG, Mushayavanhu said the new currency would be backed by
foreign currency and gold reserves.
Speaking at a post-monetary policy review breakfast meeting
in Bulawayo recently, the central bank chief said monetary authorities had
limited knowledge about a structured currency.
“We didn’t know much about a structured currency. We got a
consultant from the World Bank. A lot of the things you’re seeing about the
structured currency actually came from the World Bank.
“So, if you’re going to blame me, you’re actually blaming
the World Bank. Maybe they didn’t advise us properly. And if they did not
advise us properly, it’s fine. Let’s refine it.”
Research by The NewsHawks revealed that, there was no
literature relating to “structured currency” found on either the World Bank or
International Monetary Fund websites suggesting that this could be a novel
currency.
A World Bank spokesperson told The NewsHawks that while the
multilateral lender offers policy advice to countries such as Zimbabwe, member
states remained autonomous on key policy decisions.
“We are committed to supporting the government of Zimbabwe
in its efforts towards the country’s economic recovery,” the World Bank said in
a written response.
“This aligns with our goal to create a world free of
poverty on a livable planet. This support includes technical expertise and
in-depth research and analysis on sectors, such as the latest Zimbabwe Economic
Update. It also includes perspectives on policy and development challenges at
the request of clients. Governments tailor this advice to their contexts and
ultimately make the final decisions on policy implementation in their
countries.”
The World Bank Group is one of the world’s largest sources
of funding and knowledge for developing countries. Its five institutions —
International Bank for Reconstruction and Development, International
Development Association, International Financial Corporation, Multilateral
Investment Guarantee Agency and International Centre for Settlements of
Investment Dispute — share a commitment to reducing poverty, increasing shared
prosperity, and promoting sustainable development.
Contacted to comment on whether or not the IMF had played
any role in the introduction of Zimbabwe’s new currency, a spokesperson said
the fund was still assessing the impact of the domestic currency on the
economy.
Unlike the World Bank, a core responsibility of the IMF is
monitoring the economic and financial policies of member countries and
providing them with policy advice, an activity known as surveillance. As part
of this process, which also takes place at the global and regional levels, the
IMF identifies potential risks and recommends appropriate policy adjustments to
sustain economic growth and promote financial stability.
In Zimbabwe, the IMF through its periodic Article IV
Consultations has over the years been publishing policy advisory notes on the
country’s macroeconomic environment. Issues that have been tackled over the
years include inflation and currency regime.
“The selection of a particular exchange rate regime is the
prerogative of the country authorities, a Washington DC-based IMF
communications officer said in a written response to The NewsHawks.
“The IMF’s role is primarily to advise on whether the
country’s economic circumstances and its policy stance are consistent with the
exchange rate regime that has been selected. In this context, we stand ready to
advise the Zimbabwe’s authorities on policies to restore macroeconomic
stability, but we need time to review the design and implications of the new
currency arrangement.”
Barely a month after the launch of ZiG, some economic
analysts however doubted claims by the central bank that it would be backed by
bullion reserves. NewsHawks
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