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Favourable policies stem gold smuggling

Our policies must promote trade in the yellow metal through official channels. The decision by government to allow small-scale miners to retain 100% of their forex proceeds while denying the same privilege to big producers is an area which needs revisiting.

BARELY a year after the airing of a gold smuggling documentary, Zimbabwe finds itself in the spotlight for the wrong reasons again after it was ranked among the top five countries smuggling gold to the United Arab Emirates.

A new report by SWISSAID alleged that 12 African countries are involved in smuggling more than 20 tonnes of gold a year.

Most gold smuggling in Africa takes place in Mali, Ghana and Zimbabwe, according to the report, titled On the Trail of African Gold: Quantifying Production and Trade to Combat Illicit Flows.

The report’s estimate of undeclared artisanal and small-scale miners’ gold production vary from one African country to another, with Mali and Zimbabwe figures believed to be more than 50 tonnes, less than one tonne is accounted for by Togo, Somalia, the Republic of Congo and Eswatini.

Last year, an exposé by Qatar-based international television news channel Al Jazeera’s investigative unit premiered the documentary Gold Mafia, detailing how the yellow metal was looted at a time when the economy was battling to generate foreign currency to meet growing needs.

The four-part Al Jazeera documentary exposed a complex web involving criminal gangs, corrupt officials and powerful business figures, all profiting from the exploitation of the yellow metal.

According to the Gold Mafia documentary, the well-oiled gang exploited the loopholes in regulations while greasing the palms of officials.

However, authorities have dismissed the smuggling allegations.

It seems Zimbabwe is now a crime scene where thieves, crooks and white-collar criminals thrive due to weak enforcement, unfavourable policies and greedy officials only interested in fattening their wallets.

Despite being endowed with vast mineral resources, there is nothing to show for it, at a time when the resources should have been used to anchor Zimbabwe’s march towards an upper-middle-income economy by 2030.

Conservative estimates made by government show that Zimbabwe could be losing US$1,2 billion a year through gold smuggling.

Our policies must promote trade in the yellow metal through official channels. The decision by government to allow small-scale miners to retain 100% of their forex proceeds while denying the same privilege to big producers is an area which needs revisiting.

The big producers are the ones who pay taxes. The central bank is adamant that the 75% forex retention threshold will stay put despite protestations from miners who want the foreign currency to fund expansion programmes and increase production.

Delays in paying the small-scale miners, notwithstanding that they are being paid obtaining international prices, works against the requirement to deliver the yellow metal through official channels.

Gold is a liquid asset which easily finds buyers.

There is no point in waiting for two days to be paid when a small-scale miner can easily get a buyer who pays in cash.

The country’s sole gold buyer, Fidelity Gold Refinery, is working on a plan to track the yellow metal from mines to the market to enhance transparency. The system, which debuts in September, is seen by authorities as a means to curb smuggling.

In the absence of a favourable policy regime and tough laws that punish smuggling, Zimbabwe will remain a top smuggler of gold. – (Newsday)

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