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Small scale mining keeping Zim economy ticking

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Small scale mining keeping Zim economy ticking

Have you heard of small scale mining in Zimbabwe? Well, it is a mining activity undertaken by individuals in their own personal accord.

These people are not employed by any company and they use their own resources to mine and for them to get the gold they have to usually mine it manually.

In fact, Zimbabwe has one of the largest known mineral deposits lying around in different parts of the country. It was ranked among the top ten countries with the largest mineral deposits and above that this has seen most people opting for small scale mining methods especially in chrome and gold.

Even though small scale mining in Zimbabwe is an activity that has been ongoing since the pre-colonial times, it was legalized in the 20th Century.

There was no rule as to how to start small scale mining until the process became legal. Legalization came with its own challenges, one of them being the issue on how to manage small scale mining now that it had the force of law.

According to the World Bank, Zimbabwean youth unemployment rate stands at about 48 per cent. Therefore, being a small scale miner offers much-needed employment opportunities to the youth as it employs almost double the number of miners employed by mainstream mining. It also slows down the rural to urban migration Small scale mining projects are mostly located in rural areas. Therefore, people who want to benefit from the trade will have to live or move into in the rural areas and this will help in the decongestion of major cities.

The money that is derived from small scale mining activities is mostly used in the country as opposed to the money made by multinational organizations who send the money to their country of origin.

In addition, this somehow controversial practise of artisanal and small-scale mining has managed to offer millions of marginalised people a sustainable livelihood despite serious knowledge gaps in the sector that hinder effective and inclusive policymaking.

It has also been proven that artisanal and small-scale mining employs 10 times more people than large-scale mining, providing jobs and income for 20-30 million of the world’s poorest people and supporting the livelihoods of five times that number.

In Zimbabwe, this industry plays a pivotal role in providing much-needed employment in an economy that is
currently battling massive job losses and a foreign currency squeeze.

The sector is partly driven by increasing global demand for minerals such as tin and tungsten together with chrome which are used widely in the construction of high-technology gadgets.

But the sector also involves poor and vulnerable people, including women and children, and is renowned for its harsh working conditions and severe pollution: it is the world’s second-biggest mercury polluter (mercury is used in small-scale mining for gold).

There is a perception that ASM is a “get-rich-quick” activity. This has misinformed legislation and extension
programs and led to the application of one-size-fits-all policies. However, people working in ASM are far from the same.

They range from those whose livelihoods rely on subsistence farming to skilled workers who migrated from urban areas in search of work. Despite its low productivity, ASM is an important source of minerals and metals. It accounts for about 20 per cent of the global gold supply, 80 per cent of the global sapphire supply and 20 per cent of the global diamond supply.

Small scale mining is also a major producer of minerals indispensable for manufacturing popular electronic products, such as laptops and phones. For example, 26 per cent of global tantalum production and 25 per cent of tin comes from small scale mining.

On the global front, small scale mining is recognized as a considerable source of revenue for millions of people in about 80 countries worldwide. Small scale mining takes place in diverse regions of the world, mostly in the global South—Sub-Saharan Africa, Asia, Oceania, Central and South America.

In conclusion, the term “small-scale” has been defined in various ways, often characterized in terms of the number of miners, the production capacity of a mine, the level of mechanization or size of capital investments.

This article first appeared in the Mining Zimbabwe magazine March 2019 issue

 

 

Top Grossing Zimbabwe minerals 2018

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Top Grossing Zimbabwe minerals 2018

Precious metals were generally subdued in 2018 despite them being the top-grossing minerals in Zimbabwe mainly occasioned by weak safe-haven demand and a generally stronger dollar owing to interest rate hikes by the Federal Reserve during the year 2018.

These developments significantly raised the opportunity costs of holding precious metals such as gold and platinum. Furthermore, a general waning in global tensions diminished safe-haven demand for precious metals.

Zimbabwe remains one of the countries in Africa which are grossly endowed with natural resources specifically minerals. In a run down to the contribution of the minerals to the national GDP, platinum which mostly makes up the Great Dyke has proven to the most grossing mineral followed by gold and diamonds.

Ranked by value of output in 2018, Zimbabwe’s top 10 mineral commodities are as follows: platinum and other PGMs, gold, diamonds, nickel, coal and chromite.

In the year 2018, platinum consolidated its position as the leader of the group despite growing demand for chrome and lithium on the global market.

PLATINUM

Platinum output has been increasing since 2002 when Zimplats and Mimosa resumed operations and the subsequent entry of Unki in 2010 added further impetus for increased output.

The platinum sector is one of the few sectors that survived the hyper-inflation crisis where the rest of the mining sector recorded significant declines in output.

There are three existing players in the PGMs industry (Zimplats, Mimosa and Unki).

Potential new projects include ENRC, Ruschrome (Rostec) and Zimari Platinum. These projects are listed as Joint Venture projects under ZMDC.

PGMs producers share a vision of growing platinum production and sharing benefits with all stakeholders.

For every dollar created in the platinum industry, an estimated 73cents will be created in other sectors of the
economy arising from the multipliers.

The indirect multipliers include the indirect and induced impacts of the mining sector to the economy of the group despite growing demand for chrome and lithium on the global market.

PLATINUM

Platinum output has been increasing since 2002 when Zimplats and Mimosa resumed operations and the subsequent entry of Unki in 2010 added further impetus for increased output.

The platinum sector is one of the few sectors that survived the hyperinflation crisis where the rest of the mining sector recorded significant declines in output.

There are three existing players in the PGMs industry (Zimplats, Mimosa and Unki).

Potential new projects include ENRC, Ruschrome (Rostec) and Zimari Platinum. These projects are listed as Joint Venture projects under ZMDC.

PGMs producers share a vision of growing platinum production and sharing benefits with all stakeholders.

For every dollar created in the platinum industry an estimated 73cents will be created in other sectors of the economy arising from the multipliers. The indirect multipliers include the indirect and induced impacts of the mining sector to the economy.

The sector directly accounts for 3.5 per cent of GDP, which increases to 6.4 per cent with multiplier effects.

GOLD

The country is rich in gold, with an excess of 4 000 recorded gold deposits. In terms of gold productivity per square kilometre, the country is ranked above the traditional big producers including USA, Canada, Australia and Brazil.

The country has, however, remained largely underexplored, impacting negatively on grades due to limited new discoveries. (The last major gold discovery was Freda Rebecca in 1984 and started producing in 1988).

Despite attaining a peak of 27.1 tons in 1999, gold output levels progressively declined to reach a historic trough of 3.6tons in 2008, before recovering to back 20 tons by 2015.

The industry continues to operate below-installed capacity at around 77 per cent in 2015. Notwithstanding the lost decade +, the gold industry remains important in the socio-economic development of the country through its contribution to export earnings, government revenue and employment, among other contributions.

Gold remains ine of the largest contributor to mineral export earnings at around 40 per cent.

For every dollar created in the gold industry an estimated 79 cents will be created in other sectors of the economy
arising from the multipliers.

The indirect multipliers include the indirect and induced impacts of the mining sector to the economy [backward linkages ( for example transport, supplies, professional services) and forward linkages (for instance electricity generation).

In line with output growth, gold revenues will reach US$1.8 billion by 2020.

In 2018, gold deliveries to Fidelity Printers & Refiners reached 33.2 tonnes, a record high for the country, which also surpassed the year’s target of 30 tonnes.

DIAMONDS

The discovery of minerals such as diamonds in Chiadzwa and gold marked a new era in the economic revival and
resuscitation of Zimbabwe. Focus now shifted from an agricultural-based economy to a mineral resources dependent economy. Despite the scandals that continue to rock the diamond sector, it has proven to be one of the minerals which has to date kept the Zimbabwean economy ticking.

Over the last two decades, the Zimbabwe mining industry has become increasingly concentrated in terms of the number of mineral commodities produced and commodity distribution of mineral export.

In 2018, about six mineral commodities accounted for more than 96 per cent of the total value of minerals.

Asbestos, iron ore, tin and beryl, which drove export performance in the 1980s, are no longer being produced. Primary production of copper and cobalt has also ceased.

The high commodity concentration reflects the lack of a marginal commodity policy in Zimbabwe, which would
encourage the discovery, development and production of less popular mineral commodities including those that have never been mined in Zimbabwe.

The list of marginal commodities includes antimony, barytes, bauxite, iron pyrite, kyanite, talc, agate, amethyst and
tourmaline.

This article first appeared in the Mining Zimbabwe Magazine March 2019 Issue

Women making huge strides in the Zim mining industry

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Women making huge strides in the Zim mining industry

Top Eight women in the Zimbabwe mining industry.

Orthodox thinkers consider the mining sector to be a very dangerous industry that is not fit for women. However, according to a certain African proverb, if you educate a man you educate an individual but if you educate a woman, you educate the nation.

Rudairo Dickson Mapuranga

The mushrooming of women in the mining sector has led experts to come up with the conclusion that the mining sector in Zimbabwe will be the economic reviver partly due to women’s enthusiasm and hard work towards achieving a certain objective.

Women have taken an active role when it comes to mining matters and the day to day business of the sector. The mining sector which is considered by experts to be the economic resuscitator in Zimbabwe has created women who are powerful in shaping the sector for the benefit of Zimbabwe’s economy.

Women have taken the leading role in companies and organisations that were male-dominated and they are proving to be equally gifted as men and sometimes excel. Below is a list of women who are taking an active impressive role in the mining sector.

Dr Mercy Manyuchi
Dr Mercy Manyuchi

Dr Musaida Mercy Manyuchi

Dr Musaida Mercy Manyuchi who is a director in the Ministry of Mines and Mining Development is a Doctor of Technology in Chemical Engineering and she is currently researching options for using
charcoal material as a sustainable power source in African communities.

She is the Director for Research, Value Addition, and Beneficiation in the Ministry of Mines and Mining Development. Manyuchi is also a board member for the Minerals Marketing Corporation of Zimbabwe. Manyuchi, a Ph.D. holder from the Cape Peninsula University of Technology in South Africa studies sustainability focusing on the water-energy-food nexus. She also has been instrumental in bringing a Nigerian Businessman, Benedict Peters into Zimbabwe.

Ella Muchemwa

Ella Muchemwa

A non-executive director in one of the only four-diamond mining firms in Zimbabwe, Zimbabwe Consolidated Diamond Company (ZCDC).

Muchemwa has over 16 years of experience in diamond exploration, feasibility studies through diamond operations. Mrs. Muchemwa is a qualified geologist with over 30 years of experience in the mining industry in Zimbabwe, Namibia and South Africa and she is currently a consultant with Mrell Consultancy.
She has spent over fifteen years with RioZim and Murowa Diamonds, covering diamond exploration, feasibility studies through mining operations and was part of the leadership team involved in establishing Murowa, from a green field.

She also represented Zimbabwe at World Diamond Council as a member of the Kimberley Process Certification Review team to the Democratic Republic of Congo (DRC) in 2009.

She was the acting Managing Director for Murowa Diamonds Private Limited for nine months (2016) and a Mining Services Manager at Richards Bay Minerals in South Africa. She is the first woman to be elected Chairman of the
Geological Society of Zimbabwe in 2001 and the first to be elected into the Chamber of Mines Presidium as the 2nd Vice President in 2010. Mrs. Muchemwa, holds a BSc General degree in Geology and Botany and a Special Honours degree in Geology, both from the University of Zimbabwe.

Elizabeth Nerwande
Elizabeth Nerwande

Elizabeth Nerwande

“She is serving as the President of the Chamber of Mines of Zimbabwe.” She is a non-executive director of Zimbabwe Consolidated Diamond Company (ZCDC) Mrs Nerwande-Chibanda is currently the Head of Corporate Affairs for Mimosa Mining Company.

Mrs. Nerwande-Chibanda was the Executive Director of Consumer Council of Zimbabwe (CCZ) from 1999-2003, CEO for Zimtrade from 2004-2006 and Commissioner General for an Expo in Aichi Japan. Mrs Nerwande Chibanda holds a Diploma in Social Work (1991) and an Honours degree in Industrial Psychology.

 

 

 

Jaqueline Munyonga
Jaqueline Munyonga

Jacqueline Munyonga

Jacqueline is the Director of Legal Services in the Ministry of Mines and Mining Development. She also holds a Bachelor of Laws Honors degree from the University of Zimbabwe. She is a registered Legal Practitioner, Conveyancer and Notary Public. She recently submitted her dissertation for LLM in Commercial Law with UNISA.

Jacqueline Munyonga has glowing experience in civil and criminal litigation, dispute resolution, contract negotiation and corporate governance.

At the Ministry of Mines and Mining Development, she collaborated with the legal counsel from local and international entities on matters cutting across various aspects of the law.

She is the chief negotiator of the Ministry on mining contracts and agreements, gives legal advice to the Minister and his deputy, the Permanent Secretary and the whole ministry at large and works closely with the Attorney General’s Office. She has extensive experience in several due diligence exercises, acquisitions, and strategic investments. Jacqueline has been instrumental in the successful negotiation of multi-billion contracts with big international investors and she has been essential in the creation and protection of value addition in the mining sector, also being the legal focal person for the Ministry in Kimberly Process Certification Scheme. She also participates in anti-money laundering initiatives spearheaded by the government.

Otilia Furusa
Otilia Furusa

Otilia Furusa

Otilia Furusa is the current Minerals Marketing Corporation of Zimbabwe (MMCZ) metals marketing manager.

Ottilia Furusa joined the Minerals Marketing Corporation of Zimbabwe (MMCZ) on 1 March 1985 as a Sales Executive III in the Metals Division. In December 1995, Otilia was appointed as a Management Trainee under the Steel and Granite Division and later became the Acting Divisional Manager. She rose through the ranks and was promoted to Deputy Divisional Manager Metals in 2000. From 2003 to 2007, she was further promoted to become Marketing Executive-Metals Division.

Mrs Furusa was appointed the Deputy General Manager of Shanghai Jinchuan Zimbabwe Mineral Co. Ltd (SJZMC) which was a Joint Venture Company between Jinchuan Group Ltd of China and Minerals Marketing Corporation of Zimbabwe in July 2007. SJZMC was created to trade in minerals with Zimbabwe and the SADC region, facilitating mineral processing and value addition and related technology transfer between Zimbabwe and the Far East as well as enhancing Asian- Pacific international trading. Upon closure of the company in 2010, she returned to Zimbabwe and assumed her Marketing Executive duties.

Mrs Furusa acted as the Deputy General Manager (Marketing) responsible for two divisions i.e. Metals and Non Metals for four and half years and acted as the General Manager in the absence of the General Manager. Currently, Otilia is the Metals Marketing Executive and has obtained vast experience in marketing. The Metals Division’s contribution towards the Corporation accounts for over 85% of the sales revenue.

She holds a Business Studies degree from the UZ, a diploma in marketing from the Institute of Marketing Management- (IMM) and completed the Management Development Programme (MDP) sponsored by the Corporation.

Her active and positive participation in the marketing of metals from Zimbabwe to other countries increases the value of our metals, therefore giving the miner the urge to mine. Mrs Furutsa position is very influential in the mining sector in Zimbabwe.

Henrietta Rushwaya
Henrietta Rushwaya

Henrietta Rushwaya

Undoubtedly the most popular on this list and also referred to as the “Iron Woman of Zimbabwe Mining” Henrietta Rushwaya is the current Zimbabwe Miners Federation President (ZMF). ZMF is a small-scale and artisanal miners body that is subscripted to the Ministry of Mines and Mining Development with a membership of over 1.5 million.

Since her ascension to the presidential position at ZMF, Rushwaya has turned the small-scale mining sector in Zimbabwe into a formidable force. Since she has been at the helm of the Federation, Zimbabwe has seen the rise of younger people in Small-scale mining something she is rarely credited for. The rise of Rushwaya at ZMF has seen the ASM sector accounting for the largest chunk of the country’s gold deliveries to Fidelity Printers and Refineries (FPR) after overtaking their counterparts in the primary production sector which is dominated by Conglomerates.

Amidst the fuel crisis the country is experiencing, Rushwaya’s executive entered into a mutual relationship with Glow Petroleum where miners under ZMF are unlimitedly supplied with fuel by Glow petroleum at a very reasonable amount. Her executive also entered into a mutual relationship with Zimbabwe’s sole gold buyer and exporter in an attempt to reduce gold leakages in Zimbabwe and improve dialogue between ASM and the sole buyer.

Babra Mutambanengwe
Babra Mutambanengwe

Barbara Mutambanengwe

Born in Zimunya south of Mutare city under Manicaland province in 1959, Barbara Mutambanengwe is the founder and managing director of Kenako Diamond Processing, a firm which deals with rough diamond cleaning. Industry.

Barbra who is a holder of a diploma in secretarial studies from Harare Polytechnic with no mining-related course from the school of mines or another university has defied the odds by becoming the first woman who ventured into the Diamond Mining Processing. It took Barbra almost over two years for her to get a licence in diamond processing for her to set up diamond-deep boiling facilities in Msasa, Harare. Barbra owns one of
the biggest diamond cleaning plants in Zimbabwe which has the capacity to clean over 1.2 million carats per month, she has cleaned diamonds for various diamond firms including the Zimbabwe Consolidated Diamond Company (ZCDC). The objective of cleaning diamonds is to remove the coating so that buyers can see clearly the colour, and clarity and then make the correct value of the diamonds.

Diamond processing and mining have been aligned to be a man’s job despite those odds Ms Mutambanegwe engaged herself as a leading diamond processor.

This article 1st appeared in the Mining Zimbabwe Magazine November 2019 issue

Promoting investment in the Gemstone industry

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Promoting investment in the Gemstone industry

Of utmost importance, our country needs more exports in order to attract much needed foreign currency. Zimbabwe has an abundance of gemstones, gem quality, high grade, low grade, and even industrial materials.

By Privelage Moyo

Most of these had never been highly regarded in our as exports, as this was due to lack of a sustainable market, knowledge and exposure.

As citizens started migrating to other countries an investment gap has been realised as well as the demand for original and genuine gemstones.

A lot of jewellery was and is still being made from synthetic materials that fill up our markets.

Zimbabwe as well as Africa at large needs to, therefore, come up with policies and unified frames for the marketing of these Gemstones.

The key issues to consider in promoting and marketing gemstones are:-

a) Flexible or nonrestrictive laws and regulations pertaining to mining and possession of gemstones internally.

The government has to come up with friendly laws to promote the ease of doing business. Monitoring and strict security measures must be put only at points of entry and exit so as to curb illicit outflows.

b) Exclusive mining rights strictly to locals.

Most of these gemstones can be mined by common people as some are found in loose soils, some in rivers and river beds like agates.

The whole idea will be to empower the locals or citizens to value and benefit from their community minerals directly as they will be included in the value chain.

We have seen the potential with artisanal and small-scale miners in the gold production sector proving that if given a chance and full knowledge and support the gemstone industry will flourish.

c) To create an open market or one-stop-shop market/s in either three or four provinces eg, Harare, Mutare, Masvingo, and Bulawayo.

If Tobacco has market structures and systems that are well organised and promoting the formalisation of tobacco
farming, then why not the gemstone industry which is not seasonal but all year round.

This will allow traders and miners to showcase their wares closer to their localities. Cutting transportation cost as well as creating employment in and around the mining and marketing areas.

(d) Beneficiation to be done internally, that is in the country of origin except for some materials like clear quartz or milky quartz.

A lot of investment from both government and diasporans have to be made in the mechanising the processors, gem cutting and polishing.

Most equipment being used in our country is obsolete.

e) Investing in Institutions,

It is high time the government focuses on real issues that transform a nation, the likes of empowering its citizens with knowledge of cutting, polishing as well as jewellery making.

We have all we need, that is, raw materials and highly literate labour force. Also, let our children be taught about
gemstones from tender ages such that the knowledge acquired will be beneficial to their future.

f) Predatory buyers and prices.

If Africa realises it’s potential no predators will ever set foot at our shores to loot our gem minerals for a song but will come as business partners.

Currently, when buyers realise the availability of our resources, they drop or benchmark our gemstones to prices worth nothing to a miner nor the country but worth billions to their markets.

We need to come together as Africa and be unified in the gemstone industry. Africa is being sidelined in its own territories.

Buyers end up being the miners and across continents, being the processors or marketer of our minerals thereby making African citizens only labourers of their mineral wealth.

g) DIASPORIANS EXPOSURE.

It’s high time we utilise the opportunities we possess of having our countrymen and women resident in various continents to be involved and create or open up markets for our gemstones.

Currently, they contribute to the economy by sending their hard-earned foreign currency to their families of which there is another better win-win solution that will see the return on investment then earning more from home and remit back.

The whole idea now is not to reinvent the wheel but to use the existing wheels for the benefit of our country as well as our African continent.

The diaporians will be our country’s agents or marketing partners thereby earning from home as well as doing business with fellow countrymen.

There are over 5 million Zimbabweans living in neighbouring countries and abroad and if just a fifth of these decide to invest in Gemstone mining, millions will benefit. There will be less unemployment as more will be self-employed and potentially earning handsomely even from the most remote parts of the country.

All it takes is for laws, rules, and regulations to be aligned to benefit its citizens and most importantly conscientise the Citizens.

Written by Privelage Moyo. Privelage Moyo is the Norton Miners Association chairperson and small-scale Gemstone and Gold miner. He writes in his personal capacity

 

“You don’t call investors looters” Chinese dep Ambassador

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“You don’t call investors looters” Chinese dep Ambassador

The Chinese Deputy Ambassador to Zimbabwe explaining how China has made great achievements.

He touched on how the Chinese are accused of being looters.

See video below:-

 

Colored Germstones and Zimbabwe’s economic recovery: A potential

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Colored Germstones and Zimbabwe’s economic recovery: A potential

In January 2018, the PR Newswire online, London, published that the gemstone market is approximately 23 billion US dollars and that the popularity in non-diamond gemstones had soared to a 100% increase in prices within the decade.

By Maison Phiri

In the economic downturn that the country has been experiencing, it would be unwise to ignore the economic potential of the colored gemstone industry to the GDP, taking into account that we have vast known deposits under the stewardship of citizen miners or ASMs.

To appreciate the potential impact of colored gemstones on the economy, one needs to comprehend the mine to market value chain:

       Gemstone exploration and mining

  • Is truthfully a risky business for investors, but on economic scales, this motivates businesses in mine equipment supply, mining explosives and other relevant supply needs for any mine. This means business for any local supplier. Moreover, investment may be sought from the local banks and micro finances and that adds on to the business of this economy.

 

  1.      Gemstone sorting and grading

  • stage is wholly concerned about the skill of consistent grading of parcels to the appetite of the different targeted markets.

 

  1.    Gemstone sales

  • major activities are gem auctions and fairs. Directly, there is the propagation of economic gain in the Tourism industry and in the businesses of Branding and advertising. The marking of the country as a gemstone hub commands an inflow of migration and business to Hotels, entertainers and the tourism industry. Furthermore, the businesses concerned with advertising and promotion of these activities will be at their hype.

 

  1.     Cutting and Polishing

  • The stage is wholly concerned about the skill of cutting rough stones into polished and jewellery-worthy pieces.

 

  1.       Jewellery manufacturing

  • The stage is wholly concerned about the skill of designing, moulding and setting a jewellery piece.

 

  1.     Jewellery retailing

  • Is the sale of the final product and also has a bearing on the Tourism industry.

 

  • The whole chain offers employment from village levels to urban societies. There is also an appreciation of value as the chain ascends. At any stage preceding the sorting and grading, there is potential for the product to be exported, thereby partaking in the share of the USD23Billion market. If the gemstone industry is formalised, the country will enjoy tax returns, mining royalties, and community development. The gemstone industry can ensure a basic standard of living at homestead level for the citizen miner.

Verdict

  • Are being readily picked by citizen miners in small deposits. However, with proper geological surveys and mining, the production can be expanded to develop consistent supply for the market. The citizen miner usually lacks financing and proper tenure hence the small gemstone produce is highly smuggled at unfair returns to the miner and at a blatant loss to the taxman. There is a hand-to-mouth dependence for the miner and the communities’ living standards are never raised. Indirect industries such as tourism, advertising, banking, and downstream beneficiation are denied active participation. If the situation continues as is; these non-renewable mineral resources will be fleeced from the country and other economies will continue to benefit from the ignorance we assume concerning the economic impacts of the gemstone business.

This article 1st appeared in the Mining Zimbabwe Magazine November 2019 issue

US$12 billion Industry possible by 2023?

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US$12 billion Industry possible by 2023?

Last month the President of Zimbabwe Emmerson Dambudzo Mnangagwa unveiled the USD12 billion road map which aims at developing the mining sector in Zimbabwe to a USD12 billion industry by 2023. The mining sector is already Zimbabwe’s biggest foreign currency earner. Experts and the government are of the view that the sector is the leading horse towards the revival of the economy.

Rudairo Dickson Mapuranga

The President’s USD12 billion road map has put a target of USD4 billion for gold producers which is a third of the target while platinum and diamonds will weigh in with US$3 billion and US$1 billion, respectively. Chrome, Nickel and Steel are expected to generate USD1 billion, coal and hydrocarbons are also expected to produce USD 1 billion. Lithium at the moment is expected to produce USD0.5 billion while other minerals are forecast to produce USD1.5 billion up to USD 2 billion.

It is a well-known fact that Zimbabwe is hamstrung by a lack of mining exploration, moving to the USD12 billion industry by 2023 and of course becoming a middle-income earner by 2030, investing in mining exploration is the key. However, it is also a known fact that tapping of the known deposits in the country should be of primary concern.

Investment in mining prospects should be the country’s number one concern towards improving the mining sector and the economy at large. Is it possible for the sector to earn 12 billion annually by 2023?

Is the USD12 billion target achievable?

With the copiousness of mineral deposit, the country is sitting on both under exploitation and unexplored but known resources, the country has the potential to earn and turn the wheels of the economy and transform the country into an upper-middle-class earner not later than 2023. It is, therefore, Mining Zimbabwe’s opinion that the country can reach the president’s vision of the country becoming a middle-income earner by 2030 with the backup of the mining industry.

The miners’ support

The Miners in Zimbabwe have thrown their weight behind the USD12 billion roadmap for the mining sector in the next three years optimistic that the target was achievable, however, miners are of the knowledge that certain initiatives, policies, and reforms need to be looked into for the sector to achieve the USD12 billion fate.

USD 4 billion for gold, is it possible?

The mining sector last year earned US$3,4 billion, driven by the high performance of the gold sector, which delivered a record 33,2 tons. Overall last year the sector failed to earn USD 4 billion how can the sector as a whole achieve that feat?

Experts are of the view that the majority of Zimbabwe’s gold is being smuggled out of the country through different channels and the nation is losing millions due to rampant smuggling.

In order to achieve the USD 4 billion mark, there are various factors that need to be addressed by the government for the gold sector to achieve the target.

(a) Curb gold smuggling there are various reasons which has led to gold smuggling from Zimbabwe among them, the 55/45 per cent retention, late payments from Fidelity and various Statutory Instrument (SI) implemented by the government.

In order for the sector to achieve the target, it is of paramount importance for the government to consider paying gold miners what they are demanding, pay the gold producers on time to limit alternative markets and remove the current SIs gazetted by the Minister of Finance Mthuli Ncube which banned the use of foreign currency in all local transactions and pricing of equipment in foreign currency.

 (b)  Invest in gold prospecting –

The government of Zimbabwe needs to revive the gold mining sector by investing in gold mining through Fidelity, supplying miners with equipment, making public the gold development fund and issuing miners with prospecting licenses on time in order for them to acquire loans. Geologists believe that there is little activity happening along the Great Dyke for the country to reach full gold exploitation.

(c) Invest in Exploration –

Production in Zimbabwe is limited by a lack of exploration. Identifying new mines in the mining sector is key, the government should, therefore, make it their duty to invest in exploration by granting as many EPOs as possible to various EPO holders.

USD 4 billion is nearly not possible

Identifying a gold mine is a daunting task, it can take up to 10 years for geologists, chemists, and engineers to examine a potential site. And even then, the likelihood of a mine being developed into a production gold mine is less than 0.1 per cent. Only ten per cent of these sites contain enough gold to justify further development. But above ground, gold is everywhere. New deposits of gold are increasingly hard to come by and increasingly difficult to locate. Geologists have estimated that only 55 tons remain buried away in the Earth’s crust. This means, that if current global mining rates continued, we could run out of newfound gold in just 20 years. So as gold Mining continues to slow and the cost associated with mining increases to meet the challenge of extraction, gold could become even more expensive.

Can the intended target for PGM be reached?

Zimbabwe hosts the second-largest platinum group metals (PGMs) resource in the world on the Great Dyke. An estimate of 2.8 billion tones PGM ore at 4g/t 4e is estimated to lounge on the Dyke. The grade and thickness of the ore body persist over large areas.

It is indeed true that the sector can contribute up to USD 3 billion and push the economy of Zimbabwe to Yester year’s heights thereby helping the nation reach the USD 12 billion target however it could be difficult for the country to reach by 2023 without the necessary steps taken by the government.

It is, however, of no doubt that the PGM sector has all it takes to contribute even more than its projected target through the coming in of projects like Karo and other platinum mining firms.

The possibility of diamond contributing USD 1 billion?

Zimbabwe in the Marange field has the largest diamond field in the world in terms of carats produced, estimated to have produced 16,9 million carats in 2013 that is about 13 per cent of the global rough diamond supply. However, diamond production at Marange is estimated at under USD 60 per carat while some diamond mines in the world produce rough diamonds valued at over USD 1000 per carat.

Zimbabwe has other diamonds reserves in Masvingo, that is Chivi, Beitbridge, Mwenezi, and Mazvihwa in Zvishavane where the diamond miner RioZim’s Murowa diamond is the miner. Murowa diamond at its Mazvihwa reserves has a record high of 740,244 carats in 2018.

The president of Zimbabwe and the Minister of Mines and Mining Development were optimistic that the diamond sector will have an immense contribution than before through the coming in of world’s biggest miners in the diamond sector like Anjin, Alrosa, and Vast Resources.

It is, however, important to note that Zimbabwe is at loggerheads with the west, the selling of its diamonds is at risk with the US Customs and Border Protection alleging the use of forced labor in Zimbabwe’s diamond mining sector. The sector could lose market if the government does not prove to the world that the allegations are malicious.

Is it not a big target for Chrome, Nickel and Steel to generate USD1 billion?

Zimbabwe has the second-largest high-grade chromium ores in the world after South Africa with reserves of approximately 10 billion tonnes. The country has more untapped than tapped Nickel deposits with only Trojan mine in Bindura only mining the mineral at a very low scale.

Only steel production can reach the target in this category if plans are in place to revive the sector. However, as of now it could be just wishful thinking with no plans in place.

The government also needs to address issues of predatory chrome pricing in order for miners to invest in the sector.

Half a billion for lithium?

Zimbabwe has one of the world’s biggest hard rock lithium. The Arcadia lithium project located near Harare, Zimbabwe, is considered to be one of the world’s biggest hard rock lithium resources.

Prospect Resources fully owns the lithium project, which is estimated to produce an average of 75,000 tones per annum (TPA) of spodumene and 155,000tpa of petalite concentrates during its 20-year mine life.

In 2010, lithium was added to the United States government’s list of critical minerals — minerals that are important to the country’s manufacturing and defence industries, highlighting its growing importance in the global economy.

Through the Arcadia Lithium project alone, the sector can generate more than half a billion per annum, however, the project could start kick to its full potential slightly after 2023 which means that the government’s target may fall by the wayside.

USD 1, 5 billion from other minerals?

The country has one of the world’s highest mineral deposits with records showing that the country has got almost all the minerals found on earth. There are various projects underway from oil and gas to gemstones.

According to one miner, the gemstone sector only has the ability to earn USD 2 billion annually if the government through Minerals Marketing Corporation of Zimbabwe (MMCZ) focuses on promoting the sector to attract buyers and value addition.

Overall conclusion, can the sector earn USD 12 billion per annum by 2023?

Mining Zimbabwe believes that it is possible for the sector to earn more than USD 12 billion per annum, however, certain points need to be addressed before the government starts on preaching about the USD 12 billion mining sector.

The government of Zimbabwe needs to take on the following 10 priorities which will get the mining sector moving towards the USD 12 billion industry.

(i) End Corruption–

although not muchly recorded corruption in the sector is too prevalent and the cancer of corruption needs to be dealt with once and for all.

(ii) Institutionalise the rule of law to end statutory risk

There should be no changes to rules and regulations without wide stakeholder consultations and advance notice.

(iii) Stable economic environment-

A stable economy where property rights are respected and policy is consistent will help stabilize the mining sector, thereby leading to the growth of the sector through attracting the right investment.

(iv) Currency must be free-floating and tradable –

A floating exchange rate is a regime where the currency price of a nation is set by the forex market based on supply and demand relative to other currencies. This is in contrast to a fixed exchange rate, in which the government entirely or predominantly determines the rate.

(v) Economic growth- 

Capital Flows Foreign capital tends to flow into countries that have strong governments, dynamic economies, and stable currencies, therefore, Zimbabwe needs to have a relatively stable currency to Attract investment capital from foreign investors.

(vi) Absolute minimal restrictions on lines of communication, especially the internet

The government of Zimbabwe reportedly lost millions of dollars through delayed Revenue inflows due to the slow processing of imports and exports after switching off the internet services countrywide early this year.

(vii) Improve geoscientific knowledge by revamping and recapitalising the Geological Survey Dept.

(viii) Partially privatise ZMDC

ZMDC is reportedly dead broke which led to speculations that they cannot afford to explore their numerous claims. Many assertions are constantly being thrown around which are of the view that ZMDC is sitting on dead assets and the government has no money to give so as to carry out high-risk exploration. Therefore, this has led experts into believing that, ZMDC must be listed on the stock exchange to raise money and obviously the government gets diluted to less than the controlling shareholder.

(ix) Promote exploration seriously with good tax breaks for companies who put high-risk exploration $ into the ground.

(x) Digitalise mining rights, title registration, and all payments –

Amidst reports of corruption, money laundering, externalization and other unscrupulous behaviours by mining personnel, all transactions which are mining-related in Zimbabwe if done digitally will avoid corruption and Improve transparency.

The government of Zimbabwe, therefore, needs to prioritise on these 10 points in order for the sector to achieve the 12 billion dollar status without which it will be just another project that will never yield results like the other targets previously set by the government.

This article 1st appeared in the Mining Zimbabwe Magazine November 2019 issue

Gold production, the rapid rise, and fall

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Gold production, the rapid rise, and fall

The gold industry in the country has been in existence for over 1000 years with one of the powerful early societies, the Great Zimbabwe kingdom and the Mutapa kingdom believed to be gold funded economies. Since then the country has produced a significant amount of gold. Zimbabwe’s production peaked last year when it produced 33,2 tonnes and in 1906 and 1999 at 30 tonnes and 27 tonnes respectively.

Rudairo Dickson Mapuranga

In Zimbabwe, all gold by law is sold to the country’s sole gold buyer and exporter, Fidelity Printers and Refiners (FPR). Experts believe that gold produced in Zimbabwe is four times more than gold delivered to the country’s sole gold buyer and exporter.

Despite the coming in of more small scale and artisanal miners on board and better mining technology introduced, the country has surpassed its record production of 30 tonnes per annum only once last year (2018) when a record delivery of 33,2 tonnes was recorded due to various reasons.

This year, the government has set a gold production target of 40 tonnes which has proven to be out of reach with the country’s sole gold buyer and exporter recording only 12 tonnes during the first half of the year. Production is expected to rise to 17 tonnes during the second quarter of the year, however, the record set last year will not be surpassed as expected by the government.

The government through its USD12 Billion road map has set a likely to be laughable target earnings of gold per annum of up to 4USD billion that is over 100 tonnes of gold per annum when the country since 1980 has failed to reach 40 tonnes in a single year.

Traditionally, the mining industry has been very important to the economy of Zimbabwe. The sector generates considerable employment, foreign currency earnings, infrastructure development and attracts significant foreign direct investment.

Can the mining sector achieve 100 tonnes of gold delivery to Fidelity?

According to Zimbabwe Miners Federation spokesperson, Dosman Mangisi the gold mining sector can deliver 100 tonnes of gold or more to the country’s sole gold buyer and exporter if the government supports the sector.

“More gold is being produced in the gold mining industry, the sector has the potential to produce 50 to 100 tonnes of gold annually and if more resources are channeled, we are able to produce more in this country,” said Mangisi.

However, according to Core Miners Association Founding Chairperson Canaan Joseph Saurombe, the 100 tonnes production figure being thrown around cannot be considered to be true, however, production according to him is very high and delivery to the country’s sole gold buyer and exporter can only be achieved when the gold mining sector is formalized.

“Well, I don’t know how that assumption was build up. But I do agree without a doubt that we are producing more than what is accounted for. The complexity begins on our definition of production, in this case, it focuses on formalised production which is accounted for and adds up to the monthly/ annual gross” said Saurombe.

Saurombe also added saying that it should be the government’s main priority to make sure that, small scale and artisanal miners are attracted to formalisation before the idea of formalisation is preached. The Core Miners Association chairperson said that the government needs to dovetail gold production and declaration through dialogue and creating relationships with the miners.

“We need to interlock the gold production and gold declaration to Fidelity; we have to create incentive policies for the formal sector. Besides preaching formalisation, one has to be attracted to formalise by just evaluating the pros of making that decision.”

“If it becomes more profitable and business-oriented for a miner to be formal and to work with fidelity being the sole buyer, then I’m sure we can revolutionise as intended.”

“So, I think engagements between the miners and the government being the policymakers have to be ongoing. To make sure that the mining environment becomes very much favorable for business to those who are supporting production. I’m sure that how we will experience a boom in production” Saurombe said.

 Why gold delivery was high 20 years ago with fewer miners in the industry?

The year 1999 is Zimbabwe’s most successful gold production period before 2018, with the country getting over 27 tonnes from both large scale and small-scale gold producers.

According to Zimbabwe Miners Federation spokesperson Dosman Mangisi, production in 1999 was high because of the government despite the sector being under-exploited was very promotive to all the miners through different initiatives which encouraged miners to sell their gold directly to the government without being pushed.

The ZMF spokesperson also said that gold production was very high during the period because the control of gold was production was controlled directly by the Ministry of Mines and the ministry of finance through the central bank could only care about receiving the gold from the miners.

“The policy was just simple government being so promotive through RBZ, miners were being resourced directly through their banks to buy gold and deposit to RBZ. It was right on the grassroots, it was direct interaction, there were not so many arms who deal in the regulation of gold” said Mangisi.

Mangisi also said that production in the 1990s was high because the small scale and artisanal miners were recognized by the government in 1991 through the amendment of the Mines and Minerals Act which allowed independent gold mining efforts by black workers.

2000-2005 gold production was fair

The year 2000 gold production declined only by 2 tonnes from the record set in 1999 and by 7 tonnes in 2001 setting production of 20 tonnes in 2001. Gold delivery during the period is believed to have been caused by different factors among them the grabbing of commercial farms by the government a move which made some small scale and artisanal miners move to farming from mining.

The period also was the genesis of the economic crisis which hit the country due to the economic sanctions which were imposed on the country by the European Union and the United States of America.

In 2002 gold delivery to FPR was 15,5 tonnes, the following year production was 18.78 percent decline with the country’s sole gold buyer and exporter recording 12.5 tonnes. In 2004 production increased getting over 21.3 tonnes of gold an increase in production by over 69 percent. Delivery, however, declined in 2005 when the gold buyer recorded over 34 percent decrease in production, with only over 14 tonnes of gold delivered.

2006 -2013 an average of 9 tonnes per year

Although foreign currency retention was higher both from 2006-08 when gold buyers would receive 75 percent forex from all gold delivered to the central bank, and 100 percent foreign currency during the GNU era, gold production during the era was very low averaging only 9 tonnes per annum.

According to Mangisi, artisanal and small-scale mining was criminalised in 2006 as part of a government effort to ensure that all gold extracted in the country be sold to the government, but that policy only pushed illegally mined gold to the parallel market.

Why did the gold delivery increase between 2013-19?

From 2014 to 2018 gold deliveries to the country’s sole gold buyer and exporter increased rapidly mainly due to the reason that small scale and artisanal miners who were banned were allowed to operate again, the period produced an average of 30 tonnes of gold delivery to Fidelity.

According to Mangisi, in 2014, the government began issuing artisanal mining permits, free of charge, to anyone interested in selling gold to the government-run Fidelity Printers and Refiners, the only legal gold buyer in Zimbabwe. In 2018, there was a massive public outreach through ZMF to encourage miners to sell their gold to Fidelity. During the period before 2018, there was no hustle getting a gold buying permit.

For the government to get more gold from small scale and artisanal miner it is of paramount importance for the government to reminiscent this period and look forward to improving the period than disturbing it.

Why the target cannot be reached in 2019

The government through the Ministry of Mines and Mining Development has set a gold target of 40 tonnes which the deputy minister of Mines Hon Polite Kambamura has expressed pessimistic views that the target would not be reached.

Caledonia has reduced its yearly target from 56 000 ounces in 2019 to 50 000 ounces due to the electricity problems the country has been experiencing during the first half of the year. The unstable power supply is one of the reasons that makes it difficult for the sector to gain ground in 2019.

ZMF spokesperson Dosman Mangisi also said that the target cannot be achieved due to policy inconstancies by the Ministry of Finance. According to Mangisi, it is not the production that usually declines in the small scale gold mining sector but deliveries to central bank because of some of the policies introduced during the year affected the market greatly.

“It is deliveries that decline caused by economic policies that the country put, as long as our payment methods are very poor gold delivery is affected, the situation will then attract vultures in the country to buy gold at low prices,” said Mangisi.

The ZMF spokesperson also said that mining disputes in the sector have caused a decline in production, the year 2019 recorded more mining disputes than the previous four years which led to the sector halting some operations that would have helped in the attainment of the gold target.

Late payments by Fidelity are also a cause of concern, this year one of Zimbabwe’s biggest gold producer Metallon Corporation Limited placing its mines under care and maintenance siting late payments by the country’s gold buyer. RioZim for almost 2 months during the year also suspended operations due to late payments.

What should have been done?

For the sector to have achieved its 40 tonnes target, monetary policies would have been improved to favor business than indulgence government appetite.

Rising mining disputes would have been curbed and a lasting solution reached, the situation might be carried over to 2020 which might also affect production next year.

The government should liberalise gold buying, give free permits to all gold buyers in the country. As long as the miners who are the producers are still complaining about pricing, licensing, marketing and late payments, then gold Mining submissions to Fidelity may further decrease.

According to Core Miners Association chairperson, Canaan Joseph Saurombe, “Next year there is a need to work on the pricing of gold, I would personally suggest at least 80%US+, 20%-Rtgs, considering that government is also banking on the forex for the acquisition of other important commodities such as pharmaceutical stocks.

(2) FPR being the sole buyer has to be readily available to each and every miner. Most being breadwinners they need quick money and the advantage is being taken up by smugglers.

(3) Encouraging policies and/or incentives for miners who are declaring their yellow metal to FPR

(4) Direct support to miners; machinery, mining loans that can be effectively assessed

(5) need for accountability and clarity; if a target is set, steps towards the mandate must be clear to quickly identify falls in trends to allow the authorities to deal with them whilst they are still short term and less complex.”

This article first appeared in the Mining Zimbabwe Magazine November 2019 issue

Eight things the government should focus on to get more gold

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Eight things the government should focus on to get more gold

Gold delivery to the country’s sole gold buyer and exporter, Fidelity Printer and Refiners has declined significantly as compared to the previous year due to various reasons. There is a big assumption that, although gold delivery to Fidelity has declined production has not declined but improved due to the coming of more investments and more players in the artisanal and small-scale mining sector.

Rudairo Dickson Mapuranga

According to the Chairman of the Institute of Mining Research at the University of Zimbabwe Lyman Mlambo, Fidelity can achieve more gold delivery through the following among other measures that he highlighted to Mining Zimbabwe.

(1) Offer a stable and good price.

To achieve that we need a gold price support scheme from we draw when prices are depressed and into which we add when the price is very good. This means Fidelity needs to build a reserve of Forex specifically for that purpose. This will curb side-marketing. In the long-term things will balance out as the price is generally fluctuating in the long-term.

(2) Fidelity needs to increase the forex retention

The country’s sole gold buyer and exporter must increase the component of the price from the current 55% to about 85 % because of equipment, spares and consumables are mainly imported. Despite miners advocating for higher forex retention last year from 75 percent they were getting, the central bank through the Ministry of Finance reduced the forex retention to 55 percent.

(3) Fidelity must settle payments in good time

This will ensure non disruption of operations. We have had cases where mines had to wait for several months to get paid, yet in the meantime they got imports to pay for. If Fidelity delays paying the RTGS component it will be insignificant value due to hyperinflation.

(4) Fidelity must be consistent in its loan support

Not to relax when it is getting loads of deliveries. This loan support should be well integrated into the ASM formalisation program so that eventually the ASM sector stands as a business entity, not livelihood or poverty-driven activity. Remember formalisation has two main aspects to it: mechanisation and legality (registration) – with the latter providing avenues to deal with issues of compliance on the environment, child labor, social welfare, SHE standards, etc.

(5) Training in technical skills to improve mining methods and levels of gold recovery.

There is an assumption that a lot of gold in Zimbabwe is going to waste due to poor mining methods by the small scale and artisanal mining sector, it is the due of the government to hold or support Mining Indabas that support miners to improve their mining methods and gold recovery processes.

(6) Work together with the Ministry of Mines and Mining Development to develop a database of deposits suitable for small-scale mining.

The ministry of mines has been called to work with small scale and artisanal miners through giving them documents that would identify them to suitable donors and loan providers.

(7) Government to finalize the mining policy and the main Mines Act Bill

Government must finalize the mining policy and the main Mines Act Bill which have provisions for recognition of SSM sector as well as those addressing the various issues in the sector.

(8) Simplify the fiscal regime

With regard to Fidelity, there is also the need to simplify the fiscal regime as a whole and to make it more competitive, for example by making royalty profit-based rather than gross revenue- based in which case we double tax profit when we exact corporate tax. But Fidelity has done well to make royalty deductible for income tax and also to index it to international prices.

9. Improve electricity supply

Zimbabwe is currently experiencing grueling power cuts. There is need for government to urgently address this issue as it has created days of downtime monthly. An alternative power source is needed in case of drought as the country’s major source of power is hydro. New generators are needed for Hwange as the current ones are too old and constantly breakdown.

Tax issues are the domain of ZIMRA so Fidelity can recommend these measures to the former.

Re-dollarisation pressure mounts

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Re-dollarisation pressure mounts

The government’s bold move to reintroduce the local currency, which is being ravaged by hyperinflation, before first getting the fundamentals right, has backfired as the economy is now, unofficially, hugely dollarised again, throwing the government’s plans to revive the economy into disarray.

A survey conducted by Business Times this week in Harare and other parts of the country showed that most small to medium enterprises were charging their products in United States dollars and other currencies. They were doing their receipts and invoices in Zimbabwe dollar equivalent, meaning the government had failed to deal with price distortions on the market.

This is despite the government banning the use of the multicurrency system in June this year in a bid to defend the Zimbabwe dollar. Several economists and other analysts see the swift outlawing of the foreign currencies as unjustified, given most countries that dollarise their economies fail to successfully reintroduce a local currency. They indicated that dollarisation would help Zimbabwe stabilise in the throes of the hyperinflation it is currently experiencing.

Recently, the RBZ Governor John Mangudya and Finance Minister Mthuli Ncube said the process of de-dollarisation was not an easy one, but the nation had to do it, saying all the fundamentals were now in place to ensure a stable local currency. They said having one’s own currency was an achievement. But this appears to be the opposite. Several analysts believe that the macroeconomic fundamentals for the return of the Zimbabwe dollar were not yet right.

The fundamentals include minimum foreign exchange reserves equivalent to one year of import cover, now said to be less than one week’s import cover, according to credible sources at the central bank. Mangudya did not respond to enquiries on the foreign exchange reserves yesterday. The other fundamentals are that Zimbabwe should have a balanced and sustainable government budget, high consumer and business confidence, a sustainable level of inflation, and a healthy job market. All these have not been met.

Ncube has claimed in the past that the Treasury had been achieving budget surpluses, but the correct position is that these have been cashflow surpluses, not budget surpluses. So far, Zimbabwe has missed several of its macroeconomic targets. The government has been targeting an economic growth rate of 3.1% by the end of 2019. But there is an economic recession, and the economy is expected in fact to contract by 6.5% this year.

There is a runaway exchange rate volatility when the government was targeting inflation to be around 5% by year-end. Now there is chronic inflation, hovering around 600% per annum. Even the month on month inflation has shot up again to 38% in October from 17% in September, meaning the government has missed its target again.

There is also acute shortage of foreign currency, excessive erosion of wages, salaries, massive shortage of electricity, and increasing cost of doing business because of increased electricity tariff, budget deficits, and incessant current account deficits.

“The government failed to diagnose the economic problem,” said one analyst. “We find ourselves being amputated for fever. How do you do austerity for an economy that is not producing, especially for an economy with structural challenges? The government should have done a diagnosis report first.” The analyst continued:

“The statistics from the Ministry of Finance do not inspire confidence. Everything that the 2020 national budget is trying to do spells doom than hope. It’s a miracle that the government wants to increase exports. How will that be when it has not given any cent to ZimTrade? Look in the Bluebook, there is nothing.”

The analyst said the budget assumptions were not realistic. “If companies want to be patriotic and use the Zimbabwe dollar for budgeting, you will be like Mthuli Ncube, who changes figures every day. The US dollar is going to continue. And this is a game the government is going to lose. This is why ZIMRA is also interested to get it through tax. The government expects improved rainfall to enhance agricultural production. But the analyst said while that was a valid observation, the sector was in danger due to the incapacitation of the farmers on the back of the high cost of farm inputs and capital erosion.

According to the analyst: “Electricity generation is a medium to long-term goal, so we don’t expect to see an improvement in electricity generation in 2020, hence this assumption will not help the country in meeting the targets. This means, the government will place emphasis on electricity imports.”

In the budget presentation, Ncube said he wanted to improve foreign currency availability. But that can only be improved when the country exports. The government also wants to improve macro-fiscal stability and business confidence. This, the analyst said, would not happen overnight.

“A stable environment requires us to stabilise the exchange rate, then inflation, and then growth. This is a long walk to freedom, which requires credible policies,” the analyst said. “Confidence is built over time by walking the talk, which is not happening with reference to the government’s policy inconsistencies. It takes away confidence.”

Martin Makaya, the former Institute of Chartered Accountants of Zimbabwe (ICAZ) president, said: “In 1999, we had hyperinflation because of fast track land reform which resulted in acute shortages of foreign currency and economic decline. In 2009, we dollarised. Fast forward to 2019, we have hyperinflation and the effects are foreign currency shortages, economic decline and de-dollarisation. I think we will officially dollarise again, we will be officially back to the US dollar. I can assure you that the use of IAS 29 (hyperinflation accounting) is here to stay. Macro-economic stability is not overnight. It is relevant and applicable in our situation.”_Business Times

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