Make selling gold locally lucrative – Mliswa
Fire-brand politician and Norton member of Parliament Temba Mliswa has urged the government to create schemes that make selling gold locally lucrative.
Speaking on his Twitter account Mliswa said many gold producers prefer to smuggle the precious metal out of Zimbabwe in order to be paid in US$.
“All gold mined in Zimbabwe is supposed to be sold to the central bank, but many producers prefer to smuggle it out of the country in order to get payment in US dollars. Gvt should respond to this issue by providing schemes that make selling it local lucrative,” Mliswa said.
“…Currently we are losing around 33 tonnes of gold annually, according to a report by the Centre for Natural Resource Governance. This kind of corruption will negate any gold production!”
All gold mined in Zimbabwe is supposed to be sold to the central bank, but many producers prefer to smuggle it out of the country in order to get payment in US dollars. Gvt should respond to this issue by providing schemes that make selling it local lucrative.
— Hon. Temba P. Mliswa (@TembaMliswa) July 26, 2022
A report by the International Crisis Group last year estimated that Zimbabwe is losing at least US$1.5 billion annually through the smuggling of gold, mainly to traders in Dubai and South Africa.
The report notes that smugglers are hiding smaller quantities of gold in clothing and headdresses, while larger amounts are stowed away in car glove compartments, spare wheels and any other parts of a vehicle that can be modified for smuggling purposes.
“Similarly, in Southern Africa, gold is easily smuggled from Zimbabwe into South Africa. Porous land borders make it easy for criminal groups to cross into South Africa where laundering opportunities and transport services are more readily available,” the report reads in part.
“While there are informal border crossings, the official Beitbridge border post remains a preferred route for gold smugglers. Smaller quantities of gold are hidden in clothing and headdresses, while larger amounts are stowed away in car glove compartments, spare wheels and any other parts of a vehicle that can be modified for smuggling purposes,” continues the report.
In both east and southern Africa, Global Initiative said trucking is a popular way to smuggle large gold shipments.
On the Zimbabwe-South Africa border, both bus drivers and truckers are reported to smuggle gold.
On the Democratic Republic of Congo (DRC)–Uganda border, gold is hidden in trucks that can bypass COVID-19 restrictions to deliver ‘essential goods’. Bars weighing between five and 20 kilograms are stuffed underneath truck cabins, inside battery compartments and emptied gasoline tankers.
“As a result, some major buyers have invested in both gold and trucking. For example, certain major gold dealers in Harare have invested in the gas business, enabling the use of gas haulage trucks with secret compartments to smuggle gold into South Africa,” it said.
On the borders, there appears to be a lack of capacity and will to stop gold smuggling.
It is clear the payment system is not suiting those who end up smuggling costing the country the much-needed revenue. On the other hand, it is a clear sign that the Apex bank needs to re-look at its payments to gold producers as buyers interviewed by the Global Initiative revealed that they were selling between 10% and 30% of their gold to the Fidelity Printers and Refiners (FPR) only to maintain their gold licences, with the rest being sold on the illicit market.