PREVIEW
Ruto is backing the Harare's new currency – the ZiG – in return Mnangagwa has confirmed support for Kenya's Odinga to chair the African Union next year
Quid pro quo appears to have been the name of the game in Kenyan President William Ruto's talks with Zimbabwe's President Emmerson Mnangagwa over the weekend.
On 27 April, Nairobi's State House reported that President Mnangagwa had confirmed Zimbabwe's support for Raila Odinga's candidacy for the chair of the African Union Commission next February. If successful, such a campaign would clear the path towards Ruto's convincing re-election in 2027 by moving his former rival out of domestic politics, while also burnishing his pan-African credentials (AC Vol 65 No 8, The battle for Odinga's ODM).
In return, Ruto gave his backing for the recently introduced ZiG (standing for Zimbabwe Gold, the ZiG is a gold-backed currency), the success of which is vital to the revival of Zimbabwe's economy.
In the weeks since its launch on 5 April, the ZiG has held its value and the early signs are that markets are taking at face value the government's insistence that it will be backed by 2.5 tonnes of gold, a basket of precious stones and mineral assets and the Treasury's foreign exchange reserves. However, the medium-term credibility of the currency will be determined by whether a significant number of Zimbabweans use it, rather than the US dollar for transactions (AC Vol 65 No 9, Shaky new ZiG money undermines IMF talks).
'This radical revitalisation of Zimbabwe's monetary policy will contribute greatly to the country's economic resurgence,' said Ruto.
He added that it was 'appropriate' that other mineral resources should be used to back the currency.
Ruto also called for Zimbabwe to be allowed to rejoin the Commonwealth and for the immediate lifting of western sanctions against members of Mnangagwa's government. The two governments have also signed a series of memoranda of understanding on investment, trade, infrastructure and transport.
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