By Albert Mpofu
In an effort to tackle the rampant issue of gold smuggling and enhance transparency in the gold trade, Tendai Biti, Member of Parliament for Harare East and senior official from the Citizen Coalition for Change (CCC) party, has proposed a series of measures.
Biti, a former Finance Minister, addressed the Parliament, urging for immediate action to combat the illicit trading of minerals. Central to his recommendations is the stripping of the central bank’s Fidelity Printers and Refiners (FPR) of its exclusive right to buy gold in Zimbabwe. By ending FPR’s monopoly, Biti believes that introducing competition from various financial institutions, such as banks, would help curb smuggling and promote a more transparent gold trade.
To support his argument, Biti referred to a report by the Portfolio Committee on Defence, Home Affairs, and Security Services, which highlighted the role of delayed payments to gold producers by FPR in contributing to leakages and illicit trading. He stressed that FPR pays gold miners less than the international price of gold, creating a significant disparity of around 20%.
Estimating that approximately $1 billion worth of gold is being smuggled out of Zimbabwe, Biti emphasized the need for legislative changes to address the issue effectively. He cited the Rand Gold Refinery, where experts believe that 70% of the refined gold originates from Zimbabwe, indicating the scale of the problem. According to Biti, only a fraction of the gold mined annually, between 15-18 tonnes out of 40-45 tonnes, is officially accounted for, implying that the remaining 20 tonnes are being smuggled out of the country. He blamed professional smugglers who take advantage of weak border control, particularly at the Beitbridge border post.
To combat the persistent smuggling, Biti proposed amending the Gold Act to grant licenses to banks, allowing them to purchase gold. He also stressed the importance of value addition, whereby Zimbabwe would refine gold into finished products rather than exporting it as raw material. Furthermore, Biti recommended utilizing gold as a reserve to back the country’s currency and establishing a sovereign wealth fund to manage gold reserves.
Biti argued that Zimbabwe needed to shift away from an extractive mindset and explore ways to maximize the value and benefits of its gold resources. By adopting his proposed measures and strengthening regulations, the country could effectively combat smuggling while promoting transparency and increased revenue from the gold trade.
