Zimbabwe is on its own- salvation will not come from Washington, London or Beijing


Then we have the gold industry here – I have credible information that our national gold trading is now over 100 tonnes per annum. This is over US$5 billion in gross revenues. Just do the maths – we have 600 formal sector mines, 500 000 small scale informal miners. If each formal mine produces 4 kilograms a month, their production is 30 tonnes a year, if the informal miners just produce 2 grams each per week, their production is over 50 tonnes a year. I understand that a significant amount of gold is also traded here and that this emanates from other Central African States. To support this view, South African gold refineries say they handle about 85 tonnes of gold a year from Zimbabwean sources. The Reserve Bank handled 30 tonnes in 2018 and 27,6 tonnes in 2019.

If we traded our gold production properly – paying our gold producers the full price in hard currency, not only would we stop all smuggling activity in its tracks, we would increase the incomes of the millions of our people who live off the proceeds and give a real boost to the formal sector. The Chamber of Mines says that Zimbabwe has sites for 200 ‘mega mines’ which would be able to increase our formal sector mining output to over 100 tonnes a year. That would put Zimbabwe into the top bracket of gold producers along with Australia, Russia and South Africa. It would unlock US$5 billion in new investment.

Instead we spend nearly US$3 billion of our own existing export proceeds and Diaspora remittances each year on buying gold – two thirds of which is then smuggled out of the country and does not come back in any form. There are any number of organisations and companies who would buy every ounce of gold produced and traded in Zimbabwe, for 100 per cent of the international price, tomorrow. Why don’t we do it. Answer; corruption and self-interest. Do the authorities know what is going on and who is doing it, yes! Are they doing anything about it, no!!

If you add up just these three items – the sums run to many billions of dollars every year, if we took effective action, and this is 100 per cent in our hands, we would not need any handouts from anyone. We could service our debts and get Zimbabwe on the road to becoming a middle income State in a decade.

For political reasons we mounted an ill-considered land reform exercise in 2000 and nationalised 8 million hectares of farm land, displacing nearly 5000 farmers and their 250 000 workers and their families. Output from agriculture, which was half our exports, a quarter of our GDP and 60 per cent of industry and commerce, collapsed by 70 per cent. We have never recovered. It not only collapsed in the commercial sector but even more in the peasant sector because of the synergies between the two.

The result, rural and urban poverty has escalated, hunger stalks the land and half our population needs food aid. We import everything and as a result, whereas prior to 2000 Zimbabweans generally paid for their needs at export parity prices, we now pay import parity and this has cost us our competitive edge in economic terms. But it is worse than that, we have taught our people that it is OK to violate property rights, it is OK to take what does not belong to you and for which you have not worked. We have shown our people that you can beat and even kill a farmer if he resists and nothing will happen to you. The failure to maintain law and order and to protect private property is costing us foreign investment and even worse, investment by our own people because there is no security.

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


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