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Raise forex retention to plug gold leakages: Mkaratigwa

By Tendai Sahondo – Wednesday 13 November 2019

HARARE – (Mining Index) – THE Chairperson of the Mines and Mining Development Portfolio Committee, Edmond Mkaratigwa has called on government to raise the foreign currency retention ratio for the gold sector to 85 percent so as to plug leakages.

Speaking at the sidelines of a Chamber of Mines survey presentation, Mkaratigwa acknowledged that a lot of gold is being smuggled out of the country as miners are running away from the 55 percent foreign currency retention being offered by Fidelity Printers and Refiners (FPR).

“We are worried that a lot of gold being smuggled out of the country. We are aware that very little gold is going to Fidelity Printers and Refiners, which is evidence that there are gross leakages emanating from 55/45-retention ration.

“This is why we are now advocating for an upward review to 85/15 in favor of the mining sector.,” he said.

Mkaratigwa said an upward review of the forex retention would in itself stimulate production and productivity.  He said once production has been raised it would be quite easy for the country to surpass the current expectation of 30 tonnes annually and eclipse this to over 100 tonnes per annum by 2013 in tandem with the vision of the mining sector.

“If we are to consider the percentage that will accrue to the central bank, it may be a smaller, but because the denominator is huge, the government will certainly benefit from the proposed retention levels. We however need to start now so, it’s a question of confidence. We need to restore confidence, but I feel that the sector also owes it to the ministry of finance to help to restore confidence by making the interbank market system work more efficiently because the custodian of our bulk foreign currency revenue is the mining sector,” he said. ENDS//

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