THE Reserve Bank of Zimbabwe (RBZ) says it now allows large-scale gold miners who deliver the yellow metal above the monthly average quantities to retain 80% of their forex earnings and directly export a portion of their bullion as it gradually eases control of gold trading in the country.
Analysts yesterday said the move would curb illicit deals in the gold sector.
In a statement, the central bank said companies licensed under the Special Economic Zones (SEZs), or those listed on the Victoria Falls Stock Exchange (VFEX) would enjoy 100% forex retention under the Incremental Export Incentive Scheme (IEIS) which was announced by monetary authorities.
Under the IEIS, the RBZ said large-scale gold producers, who qualified for the 80% retention threshold on the incremental portion, would also be entitled to directly export gold equivalent to the incremental portion so as to enable them to secure funding in the form of gold loans to ramp up production.
Under the scheme, the FPR shall facilitate the exportation process for the qualifying gold producers.
The IEIS seeks to boost exporting firms’ productivity, thereby increasing the country’s exports.
“In order to complement the country’s efforts in reforming its trade systems and taking complementary measures in other policy areas to create an environment conducive to diversifying production and exports away from the export of unprocessed products, authorised dealers are advised that an Incremental Export Incentive Scheme (IEIS) has been established to achieve the following objectives to boost productivity by firms currently engaged in exporting business as well as encourage companies that are not exporting so that they may venture into the exporting business,” the RBZ statement read.
The scheme also seeks to generate sustainable growth in export revenue and to fine-tune the policy on the export receipt retention threshold so that the benefits accrue directly to the exporters of goods and services, as well as to encourage listing and participation of firms on the VFEX and The Victoria Falls Offshore Finance Centre.
RBZ said given that the majority of exporters received their export proceeds through more than one authorised dealer, the recommended amount of the incremental export incentive would be realised on the export proceeds received during the following months after assessment and verification by exchange control.
“Authorised dealers are, therefore, expected to submit applications for incremental export incentive on behalf of their clients to exchange control exports department via the Exchange Control Document Management System,” RBZ said.
Mining sector analyst Thomas Bhiri said the policy was likely to curb gold smuggling in the country, and could motivate savings towards mechanisation of mining operations.
“Government is losing millions of dollars each year from gold smuggling. Therefore, if producers know that they will get incentives, they will deliver all their produce to Fidelity Printers so that they get that reward,” he said.
“Thus government will harness the entire 80% retention ratio and will capacitate the gold producers in acquiring machinery or even pay workers. This will see an increase in gold production and foreign currency from export earnings that will ultimately boost the gross domestic product.”
Bhiri said to sustain its policy, the RBZ should put in place watertight measures to ensure that companies that are failing to meet the targets do not benefit from the incentives through corruption.
“RBZ may appoint an independent body to oversee and monitor the process of targets and deliveries by gold producers to avoid leakages of the yellow metal,” he said.
Centre for Natural Resources Governance spokesperson Simiso Mlevu said the incentives were only likely to benefit those in power.
“This will definitely fuel corruption, but it is also meant to cover up for gold smuggling. Of late, politically-connected individuals have been arrested for allegedly smuggling hundreds of thousands worth of gold and this new position is meant to cover the backs of such people,” she said.
“Fidelity used to be one stable entity, but in the past three years, contradictory policies have been put in place just to trigger chaos which will benefit organised criminal gangs who are now in control of the gold mining sector.” Newsday