Zimbabwe to review mining sector forex retention threshold

Business Top Stories Zimbabwe

Ndaka Majaka

Zimbabwe’s government says it is moving to review the foreign exchange retention threshold for mining companies upwards, following an outcry by miners who are not happy with the current 55 percent foreign currency retention and 45 percent local currency payment method for mineral exports.

Speaking at a meeting in the capital, Harare on Wednesday, Reserve Bank of Zimbabwe (RBZ) governor, Dr John Mangudya, said he was open to an upward review.

“We will keep improving retention levels,” the central bank boss said.

Presently, the RBZ pays miners 45 percent of their earnings in local currency at the official interbank rate and the remainder in forex.

Finance minister, Professor Mthuli Ncube, echoed the same sentiments and pointed out that treasury was also open to have miners pay royalties in local currency to ensure that they get more from their earnings. At the moment royalties are levied in United States Dollars.

This comes as local mining companies last week said they wanted to retain all their export earnings in foreign exchange.

According to a survey released by the Zimbabwe Chamber of Mines, the general sentiment among miners is that having a part of their earnings paid in local currency was making them uncompetitive.

Zimbabwe is targeting a US$12 billion annual export mining industry by 2023. According to the country’s economic growth roadmap, the sector will spur the country to an annual GDP growth of seven percent per annum.