By Foreign Correspondent
THE Business Economic Empowerment Forum (B.E.E.F) has called on Zimbabwean business people to come together and establish a gold vault that will be used as a store of wealth, security and collateral when borrowing money towards resuscitating the ailing economy.
Addressing compatriots at a local hotel in Johannesburg, South Africa during the B.E.E.F Africa Province launch, B.E.E.F President Solomon Matsa questioned why Zimbabwe does not have a gold vault as security while countries that buy gold from Zimbabwe have huge gold deposits in their countries.
“Why is it that London has so much gold but they don’t produce or refine gold? We do have the gold but we don’t have even one ounce of gold?”
The Bank of England, JP Morgan and HSBC are the three largest gold vaults in London. Britain’s central bank is the second largest in the world after the New York Federal Reserve. With vaults spread over two floors, the Bank of England holds three-quarters of the gold in London stored as standard bars weighing 12.4 kg.
The British central bank boasts of over 400 000 gold bars in its vaults, with a small amount owned by the Bank itself. The Bank also stores gold for the UK government, other central banks around the world, and the London Bullion Market Association (LBMA). HSBC’s subterranean London vault stores over 1000 tonnes of gold.
“Let’s keep our gold and only borrow against it not sell it like what has been the norm. Let us create a Gold Bank so that we keep the gold as a security,” emphasised Matsa.
Zimbabwe is endorsed with a huge wealth of gold deposits. In August this year, central bank governor Dr John Mangudya announced that Zimbabwe holds the second largest gold reserves per square kilometre globally, 13 million tonnes of proven reserves with a paltry 580 tonnes having been exploited since 1980.
Matsa outlined B.E.E.F’s modus operandi on how the establishment of the gold bank will work saying “We buy all the gold Zimbabwe is producing. We create a safe in Zimbabwe where we keep our gold. We go and borrow money with the gold as security then we go and develop our country. If we fail to pay they must take the gold. So we need to build a gold deposit in Zimbabwe owned by us business people not for the government.”
“We need to put our money together, buy gold, keep it, use it as security then we develop our country. That’s the first thing we need to do as B.E.E.F, that we put this thing together,” he said.
Matsa noted continued borrowing by the Zimbabwean government,that has not been backed by a security of wealth, as a major setback that will keep the Zimbabwean economic situation in the doldrums.
“The problem is our government is continuously borrowing money from different countries and when you are borrowing money from different countries it’s on their terms and conditions. Normally the cost of money under such circumstances is huge, that’s why progress in most African countries is hampered due to a huge debt factor and even South Africa has the same problem now.”
“I think you have heard the Zimbabwe debt being said to be around US$16 billon we owe other people,” he said.
Matsa lamented on the surge in both domestic and foreign debt which has surged from US$275.8 million in 2012 to current levels of US$9.5 billion against US$7.4 billion external debt, totalling US$16.9 billion. ENDS//