RBZ in forex retention U-turn

LIVINGSTONE MARUFU AND TANATSWA KANDENGA 

The demand of small-scale gold miners to have 100% of their foreign currency payments restored has been granted by the Reserve Bank of Zimbabwe (RBZ),Business Times can report.

All economic sectors were subject to a 75% uniform forex retention, as announced by RBZ late last year.

However, small-scale miners, who produce 62% of the country’s gold, blocked supplies , forcing RBZ to rescind the policy and resume paying 100% in foreign exchange.

Henrietta Rushwaya, the president  of the Zimbabwe Miners Federation (ZMF), revealed the  latest development  to Business Times, stating that small-scale miners are currently focusing on increasing production in the wake of the 100% forex  payout.

“Small scale miners have been getting 100% forex retention threshold  all year round in 2023 and we didn’t suffer retention challenges.

“There was an impasse  for a week but the authorities were quick to resolve it,”  she said.

It is estimated that  the country  loses gold worth US$2bn yearly to smuggling and side marketing.

The government feared that smuggling could escalate if the small scale were left at 75%.

The Gold Miners Association of Zimbabwe CEO, Irvine Chinyenze said 75% forex retention was going to incentivise smuggling.

“There was a danger that smuggling was going to be  rampant as miners  were going to look for more lucrative markets where they get value for money rather than to lose value in the process.

“This was  going to  reduce production at an alarming rate as miners were going to  diversify to other sectors that wholly give earnings in US$. Though we can’t quantify criminality, the country was going to lose over US$2bn in revenues if the current policy direction was not going to be reversed,” he said.

“This was going to see a great deal of forex  being externalised  beyond the country’s borders thereby losing massive revenues along the way. This was going to create an influx of gold mafia gangs as the authorities  created a thriving environment for them to smuggle and externalise  United States dollars through illicit deals.”