BY MTHANDAZO NYONI
SMALL-scale miners say the Reserve Bank of Zimbabwe (RBZ) should consider paying them using the rand given that the country is facing challenges in sourcing United States dollars after South African banks cut off local financial institutions from importing the greenback.
RBZ deputy director for financial markets William Manimanzi recently revealed that the move by the South African banks was meant to mitigate the risk associated with dealing with Harare-based financial institutions.
Manimanzi also revealed the lowering of the forex retention threshold for small-scale miners from 70% to 55% was mainly informed by the fact that traditional sources of US dollar cash had shut their doors on Zimbabwe.
The Zimbabwe Miners’ Federation (ZMF), a representative body of small-scale miners, said government should consider buying their yellow metal using rands.
“Trading using the rand is far much better; to trade gold with the rand is far much better,” ZMF spokesperson Dosman Mangisi said.
“The reason is that South African banks that have been assisting the country with forex are now under pressure from the United States of America.”
Mangisi said many miners were buying their consumables in South Africa, hence using the rand would be more convenient for most of them.
“Even a number of manufacturers and suppliers are far much comfortable using the rand,” he said.
Reserve Bank of Zimbabwe governor John Mangudya last month set the retention threshold for the gold sector at 55% and 50% for other minerals.
Tobacco and cotton growers were capped at 30% while manufacturing, tobacco and cotton merchants (for input schemes), horticulture, transport and tourism were put at 80%.
Mangisi said the retention threshold would cripple miners.
Mines deputy minister Polite Kambamura recently said after the RBZ unveiled its monetary policy, only 20kg of gold was delivered to the country’s sole buyer of gold, Fidelity Printers and Refiners.
Meanwhile, Association for Business in Zimbabwe (Abuz) chief executive officer Victor Nyoni urged the government to increase export retention thresholds for both large and small-scale gold producers to reduce demand for foreign currency in the inter-bank foreign exchange market.
“Abuz would like to appeal to government to increase export retention thresholds for both large and small-scale gold producers and for other mineral producers to levels higher than obtaining at the moment,” he said.
“This will reduce demand for foreign currency in the inter-bank foreign exchange market.
“Such a measure has the potential to stabilise the rate between the US dollar and RTGS dollar to reasonable levels.
“Abuz believes this is a better way of government’s intervention before even considering credit lines that come at a cost.”
Mangudya established an inter-bank foreign exchange market to formalise the trading of RTGS balances and bond notes with the US dollar and other currencies on a willing-buyer willing-seller basis through banks and bureaux de change.
The current rate against the green back on the interbank market is 1:2,5.