More gold delivered but loopholes need plugging

THE Reserve Bank of Zimbabwe (RBZ) this week announced a 55,5% annual increase in gold delivered to the country's sole gold buyer, Fidelity Printers and Refiners (Private) Limited (FPR) in 2021. The country’s small and large gold producers delivered a total of 29 629,61 kg of gold from the 19 052,65 kg delivered in 2020.

This was quite a milestone in terms of production in a country that has for years been dogged by an array of challenges.

Large gold producers delivered 11 159,0 kg to FPR in 2021 whilst small-scale producers contributed 18 470,61 kg.

As much as the gold producers managed to achieve this, there is still a lot to be done in terms of plugging the gaps that have been affecting the sector with smuggling being a major challenge.

It is estimated that Zimbabwe loses an estimated 100 kg of gold annually .

Therefore looking at the delivery figures for 2021, there is no doubt that Zimbabwe has massive potential but there are critical issues yet to be addressed.

It is quite shocking that gold mining for small-scale and artisanal miners is still criminalised and on this RBZ must lead the way in making sure there is harmony.

Small-scale miners have been the biggest contributor of gold deliveries therefore harmonisation of the sector will go a long way in further improving gold deliveries.

On big gold players, the issue of taxes has been a challenge resulting in some gold miners resorting to smuggling.

Harmonisation of the tax regime for formal gold players will play a pivotal role in addressing delivery challenges.

The RBZ in 2021 came up with a cocktail of policy interventions to plug gold smuggling and among them was the introduction of incentives.

As much as the incentives have been instrumental in driving producers to the formal market, there are other measures that the government should consider.

Providing clear funding mechanisms for small-scale gold players is key.

Of late, funding schemes for small-scale players have been hijacked by political heavyweights.

To date, on funding schemes availed, there is still no concrete information on who were the beneficiaries.

All those unresolved questions have a huge bearing on the negative sentiments among miners eventually leading to subdued deliveries.

It is also of utmost importance to note that the vague handling of the disposal of FPR is also a cause for concern for most gold producers and RBZ needs to be transparent on who the investors interested in the acquisition of this critical economic player are.

Given the state of affairs around the gold mining sector, it is clear that it is way too premature to start popping the champagne.