Entire Risk and Research

Something is compelling me do try and do the maths between the Zig the reserves and the devaluation.

On April 5 2024, the reserves were amounting to $80m so the zig equivalent in circulation was 80m x 13.5= 1,08billion.

Fast forward to September 2025.The rate was around 14 and reserves were now amounting to $450m.Meaning the Zig should have appreciated by more that 500% but alas it went down by 75%.Why. Nobody heard of the injection of the Zig by the authorities till the devaluation day. We only heard that reserves had increased so the amount of Zig had to increase as well.But to begin with that's not the purpose of the reserves.

Reserves are there to stabilize the currency.

Secondly it seems the authorities that be were injecting liquidity with no any correction with the reserves.For them arriving at 1 zig=25 they simply said 10billion / 450m.Now two theories. The tap was never closed.It kept oozing at least @ 2bn per month without considering the reserves.The other theory is that these so called reserves are not even there.The figure is just arbitrary to justify the excess liquidity that is being pumped into the economy day in and out.

Why? The simple answer is there was no need to raise the statutory reserves by 100% if the liquidity wasn't in excess and if reserves were in place to cover the currency.These two policy have an indirect relationship holding other things constant. One can't raise reserves by more than five fold and the raise statutory reserves at the same time by 100% and interest rates by similar margins.

Something is not adding up here.It seems no matter how hard we try as an economy to stabilize both the micro and macro, the elephant in the room still remains- monetisation.

The ZWG is under pressure.

Currency risk remain very high with more market players shunning the ZWG currency.The few that are bound by law,are reviewing the ZWG prices longest on a weekly basis.A cross market survey points to a black market rate of around $1/ZWG 25 on average.

Considering that we are now approaching the festive season this points to a more difficult one in terms of purchasing power of the general consumer.

Entire Risk and Research

*The big dysfunction of the boards*

"Let's bring outsiders,people with different backgrounds and representing different social , political and economic interests".

At face value the above looks great, except now the board have a roomful of people who don't understand the business.

Mainly the language these people have is financial accounting,so that's what they concentrate on.In this state, as long as things are going fine that will be great but real testing of the iron comes when ocean storms start troubling the ship.This is when problem-solving is found to be absent home and away right at the board level. All the board can do at this point is to replace the CEO.

The role of the board vis-a-vis strategy is one where many industries are yet to sort out.

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