Time for Zimbabwe to hitch on international gold prices to boost the economy


Compiled by Fadzai L. Midzi-Zimbabwe Environmental Law Association

Zimbabwe has put all its hope for economic recovery in its vast mineral wealth which is expected to translate into development and turn the country into a middle-income economy as enshrined in the vision 2030.  This saw the President announcing a USD$12 billion mining strategy which has laid clear the targeted key strategic minerals that include gold which is expected to contribute $4 Billion in annual exports. If utilised well the gold reserves present an opportunity for the government to finance development particularly the public health development and other critical sectors given the current context. With international gold prices continuing to rise, whilst countries which are dependent on resources such as oil are struggling[1]. Zimbabwe is endowed with vast gold deposits giving the country an opportunity to act expeditiously in enacting bankable legal instruments that will see transparent and profitable extraction and sales procedures across all levels.

Gold has become one of Zimbabwe’s largest foreign currency earners, having accounted for US$1,3 billion in annual forex receipts in 2019, translating close to a third of total export earnings[2]. The USD$12 Billion strategy has been affected by the global coronavirus which has since seen governments changing their priorities and putting all their efforts into trying to contain the pandemic. There are several measures taken by the Zimbabwean Government to fight the economic downturn caused by the pandemic which has seen the mining sector being exempted and given the go ahead to operate during the country’s COVID-19 lockdown.

It is commendable to note that the government has been trying to put in place measures that can maximise the country’s benefit from its gold deposits. The government through FPR which is the sole end-buyer of gold determines a pricing framework for the trading of gold in the country. The recent gold pricing review is the second one in 2020 with the initial one done on the 26th of May 2020[3] .  The move was welcomed but recommendations for improvement were made by the Zimbabwe Miners Federation and Zimbabwe Environmental Law Association through its analysis of the gold buying framework[4].  Constant dialogue needs to continue as this opportunity might be lost if gold leakages continue. The country’s banks have been very volatile with Artisanal and Small-Scale Gold Miners (ASGM) preferring to keep their savings in gold rather than selling it for cash which is not guaranteed. It is critical for ASGM voices to be heard.

 The Strengthen Transparency and Accountability in Natural Resource Governance (STA-NRG) consortia have been convening policy dialogues on critical issues affecting the extractives sector both at national and district levels. These have been done through the use of various online platforms and live radio program discussions targeting artisanal and small-scale miners.  In light of the prevailing COVID-19 pandemic, to ensure a sustainable and resilient ASGM, the STA-NRG Consortium led by Pact and ZELA  are organising a zoom meeting on the 4th of August 2020 from 0930-1130am to discuss the effect of the new gold pricing policy pronounced by the Fidelity Printers and Refiners (FPR) on the 17th of July 2020.

Be sure to be part of this meeting by joining here.

[1] https://oilprice.com/Energy/Energy-General/The-Oil-Countries-Suffering-Most-From-The-Oil-Price-Crash.html

[2] https://www.thestandard.co.zw/2020/05/24/rbz-payment-delays-cripple-gold-producers/

[3] https://allafrica.com/stories/202006010230.html

[4] http://www.zela.org/analysis-of-new-gold-buying-framework-in-zimbabwe-with-a-special-emphasis-on-artisanal-and-small-scale-gold-mining/

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