Zimbabwe’s economic strategy of de-dollarisation will only succeed if the mining sector remains viable, profitable, and competitive, Deputy Minister of Finance and Investment Promotion, David Kudakwashe Mnangagwa, told delegates at the 2025 Chamber of Mines Annual Mining Conference and Exhibition in Victoria Falls last Friday.
By Rudairo Mapuranga
Addressing mining executives, government officials, and industry leaders during a high-level plenary at the 86th AGM, the Deputy Minister underscored the critical role of mining in Zimbabwe’s economic recovery and monetary reform efforts.
“There seemed to be a bit of anxiety during the Deputy Governor’s presentation,” he joked, referencing the Reserve Bank’s outline of de-dollarisation steps. “But the message has driven home: de-dollarisation is not an event; it is a process. And stability in the mining sector is key to achieving that.”
Mnangagwa emphasised that the mining industry, which accounted for over 70% of export revenues in 2024 and nearly 10% of GDP, must be placed at the centre of economic planning if Zimbabwe is to move away from dollar dependence without disrupting growth.
“Gold alone contributed 38% of that foreign currency, with 60% coming from small-scale miners,” he noted. “That should tell us where the lifeblood of our economy lies and where our policy efforts must focus.”
The Deputy Minister said that while Zimbabwe is blessed with abundant resources—from lithium and platinum to gold and diamonds—the full value of these endowments can only be realised if the fiscal environment enables growth.
“We must balance the tax and incentive framework so that mining companies are profitable, especially when commodity prices soften, as they inevitably do.”
Balancing the Tax Burden and Incentives
Responding to Chamber President Thomas Gono’s earlier remarks lamenting the high cost of doing business in Zimbabwe, Mnangagwa acknowledged the tension between collecting adequate state revenue and maintaining sectoral viability.
“On one side, miners say the tax burden is too high. On the other hand, you have stakeholders saying the government isn’t collecting enough from the sector,” he said. “So Treasury finds itself in the middle. But profitability and viability must always be at the centre of our policy.”
To support this balance, the Deputy Minister outlined a range of fiscal tools already in place: VAT deferment on imported capital equipment, accelerated depreciation, indefinite carry-forward of losses, and up to 70% foreign currency retention.
“These incentives exist to provide cash flow relief in a capital-intensive industry,” he said. “But many small-scale miners remain informal and unaware of these benefits. We urge them to formalise. You cannot scale up running informally.”
5% Gold Incentive and Small-Scale Formalisation
Mnangagwa lauded the 5% gold incentive introduced for small-scale producers delivering to Fidelity Gold Refinery as a successful move to increase formalisation and boost official deliveries. The incentive, paid in USD, provides additional returns over and above the standard price and has helped lift small-scale miners’ contribution to over 60% of Zimbabwe’s gold output.
“We are already seeing the results,” he said. “But we want to hear from miners—how is it working? What can we improve? Because incentives must be accessible and impactful.”
Mining Cadastral System and Transparency Drive
The Deputy Minister also highlighted the operationalisation of the new Mining Cadastral Information Management System, calling it a “transformative” step toward transparency, efficiency, and fairness in mining title management.
“This system shifts us from manual paper-based licensing to a digital platform. Claims are processed in real time with GIS mapping and first-come, first-served applications,” he said. “It will curb corruption, eliminate overlapping claims, and improve investor confidence.”
Treasury, he confirmed, remains committed to funding and supporting the full rollout of the cadastral system and resolving any technical issues that may arise during its implementation.
Value Addition and Beneficiation: The Future
The government’s long-term vision for mining, Mnangagwa said, goes beyond extraction. He called for intensified investment in value addition and beneficiation, arguing that downstream processing is the only path to sustainable economic transformation.
“We must move beyond raw exports. Let us unlock the full economic value of our minerals through local transformation. This creates jobs, transfers technology, and boosts our industrial base,” he said. “Value addition is not optional—it is the future.”
A Call to Shared Responsibility
Ending on a note of partnership, Mnangagwa appealed to mining companies to work closely with the government in designing a fair, effective fiscal regime. “Let’s assess and implement an optimum tax structure together. We want one that balances national revenue needs with investor confidence and long-term sector growth.”
He also reaffirmed the government’s commitment to responsible and sustainable mining, pledging support for environmental stewardship, community share ownership schemes, and inclusive development.
“Together, we can ensure that Zimbabwe’s mining sector not only recovers, but thrives—contributing to national prosperity and global competitiveness.”
In an address that drew nods and applause from industry veterans and newcomers alike, the Deputy Minister made clear that de-dollarisation, economic reform, and national recovery all begin with a strong, viable, and inclusive mining sector.
