THE Zimbabwe Coalition on Debt and Development (Zimcodd) has said government should expeditiously come up with a clear gold policy to curb illicit trade of the precious mineral.
Finance minister Mthuli Ncube recently revealed that about US$1,5 billion worth of gold was smuggled in 2020.
Zimcodd executive director Janet Zhou said government should come up with a gold policy to spell out who should invest in the sector’s value chain and models of partnerships.
“There is no gold policy in Zimbabwe. The policy changes that government comes up with (such as the Reserve Bank of Zimbabwe [RBZ]’s no-questions-asked policy) are not hinged on a clear government policy framework on exploration production, beneficiation, marketing and management of gold in Zimbabwe and this often creates a lot of policy reversals and inconsistencies,” she said.
“There is no clarity at the moment with regards to government’s policy direction on accountability on gold, including measures to curb criminality and illicit gold trade within the no-questions-asked policy. Furthermore, there is no policy framework on who should invest in the gold value chain and models of partnerships within the sector. These are some of the key issues that Zimbabwe’s gold policy should address.”
Zhou said Fidelity Printers and Refiners (FPR)’s gold-buying monopoly and its low prices were fuelling smuggling and illicit financial flows as foreign buyers often offered more.
“FPR via the Reserve Bank of Zimbabwe enjoys a monopoly in gold buying, refining and export. FPR’s unfavourable gold pricing framework is argued to be the key driver of illicit financial and mineral flows in the gold sector. For example, FPR was buying gold from artisanal and small-scale gold (ASG) miners at prices which were significantly below the international market prices, thereby creating huge opportunities for arbitrage and smuggling of gold outside the country,” she said.
“The country was at a huge risk of revenue loss to smuggling when the gap between world market prices of gold and the prices that FPR was offering increased due to COVID-19-induced lockdowns increased in demand for gold at the world market. The outbreak of COVID-19 saw the prices of gold on the international market increasing as investors were seeking gold as a safe haven due to low returns in US-dollar denominated securities.”
Zhou added: “The current liberalised gold buying framework still leaves room for arbitrage and smuggling of gold because foreign buyers offer more lucrative prices than what FRP is currently offering. The inability of FPR to avail cash to ASG miners’ offers arbitrate opportunities that big smugglers are pouncing on.”
President Emmerson Mnangagwa recently told an anti-corruption conference in Harare that the country lost gold worth US$60 million through a syndicate of businesspeople that clandestinely exported precious minerals to Dubai only.
Last month, Tashinga Masinire was arrested at OR Tambo International Airport in Johannesburg, South Africa, after allegedly trying to smuggle 23 pieces of gold from Zimbabwe.
Zimbabwe Miners Federation president Henrietta Rushwaya was last year arrested at Robert Gabriel Mugabe International Airport for allegedly attempting to smuggle 6kg of gold worth US$366 000. Newsday