A DECISION by the Zimbabwean treasury to allow gold and platinum companies to retain more of their dollar earnings has reduced the southern African country’s ability to purchase fuel with the results that its pumps are running dry, said Reuters.
“Unfortunately all those measures which are designed to stimulate one sector means that you have to take away forex allocation from other sectors, so that’s what happens. It’s a balancing game,” Zimbabwe finance minister, Mthuli Ncube told reporters.
On November 19, Zimbabwe threw its gold mining firms a lifeline, by allowing companies to retain 55% of their earnings in dollars in an effort to reduce the impact of the country’s foreign exchange crisis.
Polite Kambamura said that gold miners should be allowed to earn up to 70% of their sales in dollars. The previous threshold was 30%, it said. The country’s mining sector is struggling to pay for imports like spares and other consumables due to a severe dollar crunch. On November 1, RioZim, halted operations at three of its mines after running out of foreign exchange to pay its suppliers and to sustain operations.
Commenting on the shortage of fuel, Ncube said supplies would improve in the next few days as the government had arranged credit lines to fund fuel purchases. But when the central bank governor gave similar assurances in October, it took another two weeks for the fuel situation to normalise, said Reuters.
“It’s normal to have these kinds of hitches from time to time, but we are on top of it. We are resolving that,” said Ncube.
