Mnangagwa connects gold traders to make money through government incentives

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The GOVERNMENT’s Gold Incentive Scheme (GIS) has been scrutinized amid indications that it generally benefits people with ties to politics, especially close allies of President Emmerson Mnangagwa Pedzisayi “Scott” Sakupwanya – a Zanu -PF board member – and the company Better Brands Jewelery (BBJ) are pocked. US $ 460 million in profits last year at the expense of artisanal and small -scale miners.

While Sakupwanya minted money through gold, artisanal and small -scale miners struggled for a living. He said he didn’t get the rewards of the government’s massive gold incentives.

Gold is the center of Zimbabwe’s economic and political fortunes. Those who know the ins and outs of the sector – the labyrinth of structures and dynamics – say that whoever controls the industry, who governs the country.

It is not only a source of livelihood for thousands, but also a feed for connected politics and a crony political patronage center for Zanu-PF and its shadow economic network.

The incentive scheme, introduced early last year to boost gold shipments to Zimbabwe’s sole authorized gold buyer, Fidelity Printers and Refiners (FPR), has left artisanal and small -scale operators at the mercy of large gold buyers who make the kill. that cost.

This goes against reports that Zimbabwe continues to lose US $ 100 million per month through gold arms.

Development experts say that if the country is well managed and managed, too much gold can only be the basis of economic growth, while the increased production chain and cross -chain activity can be a catalyst for progress.

Urban countries like Singapore and other Asian Tigers are becoming economic giants without the natural resources provided by African countries like Zimbabwe. He just has a vision, leadership and a development plan.

Last year, board member of Zanu-PF Sakupwanya’s Better Brands Jewelery pocketed US $ 460 million after delivering more than seven tonnes of gold to Fidelity, a move that earned him Best Gold Buyer of the Year at the mining industry awards recently held at the State House. in Harare.

Sakupwanya, who is also chairman of the National Gold Buyers Association, an affiliate of the controversial Henrietta Rushwaya-led Federation of Zimbabwean Miners, has close ties with Mnangagwa and his children, as well as other political elites.

Rushwaya, who was arrested in October 2020 for trying to smuggle 6kg of gold into Dubai, was linked to Mnangagwa and became a major trader in the gold business.

Delivery of 20kg of gold within 30 days is eligible for an incentive of 5%, tons of 7%and one to three tons of 9%.

According to Reserve Bank of Zimbabwe governor John Mangudya, Fidelity received a total of 29 629.61 tonnes of gold, 18,470 tonnes of which came from small miners.

“A total of 29,629.61kg of gold was shipped to Fidelity Gold Refinery in 2021. Large gold producers delivered 11,159kg, while small -scale producers contributed 18,470kg,” Mangudya said.

“Small and large gold producers have shipped a total of 29 629.61kg of gold to Fidelity Gold Refinery (FGR) in 2021, an increase of 55.5% from 19 052.65kg shipped in 2020.”

The Reserve Bank of Zimbabwe has hailed GIS introduced by the government to increase 55.5% of precious mineral production and shipments after last years of consecutive declines in production. Small -scale miners also lead production earlier than large producers.

However, a survey by The NewsHawks revealed artisanal and small-scale miners, who make up a larger percentage of Zimbabwe’s current gold shipments, receive between one and 1.5% of current gold incentives, and some get nothing.

“We only hear that gold buyers are given an extra 5% when they send our gold to Fidelity. No one I know is given extra money after our gold is sold. We are usually given beer and permission to mine peacefully without hindrance. Other mining gangs are. controlling those claims is an incentive, ”said Bruce Chimbwanda, an artisanal miner at Mazowe.

In Zimbabwe, the majority of the working population can be found in the informal sector. And in the mineral-rich regions of the country, people are constantly ruining their lives digging the ground to find gold, hoping to earn enough money to get out of poverty.

However, the reality is different. While political relations like Sakupwanya generated millions, artisanal and small-scale miners were impoverished amid violence in an unstable sector.

Another artisanal miner, Tonderai Mutasa, said: “As small-scale artisanal miners, our desire is to be registered and use sophisticated equipment that does not endanger our lives. But the money we get from gold buyers does not allow us to do so. My friends and I get extra. of the gold buyers ‘who are our bosses’ literally and we are glad. the money we hear they get from Fidelity. “

In the midst of the economic crisis, attacks related to Zimbabwe’s growing artisanal mining sector have killed hundreds of poor miners.

Zimbabwe Gold Miners Association chief executive Irvin Chinyenze said GIS generally benefits gold buying agents, as generally small -scale miners are unable to produce 20kg of gold per month under incentive terms.

“The 5% incentive is not according to us for small -scale miners if you consider that they are offered for deliveries of a minimum of 20kgs per month. The threshold is high. But buying agents and certainly some have such a capacity,” Chinyenze said.

“The reason why the incentive is there is to try delivery and through review the price rise is indirectly in the form of royalties. It takes another incentive that goes beyond that.”

But Sakupwanya, who has been one of the biggest beneficiaries of the incentive, defended the policy.

“The government has got incentives that make us attract gold miners who are now more willing to sell gold to us, rather than sell it to smugglers,” he said.

Sakupwanya declined to comment on allegations that small -scale miners did not benefit from the scheme.

Current policy approaches, including the criminalization of artisanal gold mining by the Zimbabwean authorities, fail to address ongoing challenges such as land rights conflicts, violence, environmental degradation and smuggling.

Mining experts say that while the cost of imperfect regulations needs to be reduced, new approaches are needed, including better regulations and interventions to formalize the sector. It is important, he said, that the conflicting relationship between artisanal and small -scale miners and large -scale commercial miners is transformed into an inclusive stakeholder arrangement framed by interest and cooperation.

Gold is central to Mnangagwa’s economic revival plan. In October 2019, Mnangagwa and Mining minister Winston Chitando announced plans to increase the government’s gold revenue to US $ 4 billion annually by 2023, an ambitious fourfold increase in four years.

The government has said it targets the mining sector’s economy of US $ 12 billion by 2023. Mining accounts for about 2.6% of Zimbabwe’s economy based on US $ 25.8 billion.

The gold sector does not include exclusively, or generally, big business.

Artisanal miners – poor men and women who work hard on their own or in small groups using small or no machinery – and small -scale mining, which includes relatively large operations with some mechanization, produce the majority of Zimbabwe’s gold.

In 2019, a combination of artisanal and small -scale miners was responsible for 63% of reported gold production, although it is unclear whether artisanal or small -scale mining was the larger contributor of the two.

In the midst of a collapsing economy, an estimated 1.5 million people have turned to artisanal mining as a safety net. This trend intensified in the post-Covid-19 era which led to increasing hardship amid economic implosion, currency and exchange volatility and inflation.

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