‘BRING GOLD BOND’

…State urged to introduce gold bold to stabilise economy

GOVERNMENT should introduce a gold bond for the betterment of the economy, a mining expert Mwiimba Bwalya has proposed.

Mr Bwalya said it was sad that the country’s economy was bleeding when Zambia was endowed with lucrative resources such as gold.

He agreed with other experts’ suggestions that there is need to come up with a “Marshall Plan” that would be critical to the economic recovery of the country.

“I think coming up with a Gold bond would help. We used our minerals sometime back and there is no problem to come up with the gold bond to help improve our economy. We are the owners of the resources but we are not getting anything, we need to take advantage of the resources we have for the betterment of the economy.

“These are our natural resources but we are not using them to our advantage that is the problem. As a country we have these resources but we are not putting them to good use to help in improving the economy,” Mr Bwalya said.

A Gold Bond is similar to a conventional dollar bond, except that the interest is paid in gold, the principal is paid in gold, and the face value of the bond is denominated in ounces of gold. The gold bond issuer amortises the bond from income the same way that a dollar paper bond issuer does.

Prospective issuers of gold bonds include companies who have a gold income. They want to borrow gold, because then their income is matched to their debt service, with no price risk. Issuers may include refiners, depositories, miners, and other businesses.

Any sovereign government that has gold mining activity in its jurisdiction is a great candidate to issue a gold bond. Not only are there fiscal benefits and reduction of risk to the issuer, but of course it helps the world move forward to the use of gold as money— and the sovereign away from the challenges and risks of doing business in the US dollar.

The benefit of the Gold Bond to the investor is even greater than with the True Gold Lease. A bond is a longterm investment.

Gold bonds, like paper dollar bonds, are securities. This is an advantage, as it gives institutions a way to own gold who are otherwise prohibited from owning a physical commodity.

And Mr Bwalya said coming up with the said initiative was a good idea and it would work to the advantage of the country.