Politically linked gold dealers mint money through govt incentives

Mary Mundeya

GOVERNMENT’S Gold Incentives Scheme (GIS) has come under scrutiny amid indications it is largely benefitting politically connected people.

Investigations by She Corresponds Africa with support from the Information for Development Trust (IDT) have revealed one of the biggest beneficiaries of the scheme is Better Brands Jewellery (BBJ), owned  by Pedzisayi “Scott” Sakupwanya (pictured),  a former Zanu PF councillor.

Last year, Better Brands pocketed US$1.2 billion in revenues, while artisanal and small-scale miners, which mine the gold did not benefit from the scheme.

Artisanal and small-scale miners said in interviews they were not reaping the rewards of the government’s much-hyped gold incentives.

Gold is central to Zimbabwe’s economic revival and it is a source of livelihood for tens of thousands of Zimbabweans.

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The incentive scheme, which was introduced in 2021 to boost gold deliveries to Zimbabwe’s sole authorised gold buyer, Fidelity Printers and Refiners (FPR), has left artisanal and small-scale operators at the mercy of big gold buyers, who are making a fortune from the works.

This comes against reports that Zimbabwe continues to lose US$100 million a month through gold smuggling.

Sakupwanya, who is also chairperson of the National Gold Buyers’ Association, an affiliate of the Henrietta Rushwaya-led Zimbabwe Miners’ Federation, is reported to have close links with President Emmerson Mnangagwa and his children, among other political elites.

Rushwaya, who was arrested in October 2020 trying to smuggle 6kg of gold to Dubai, is a major dealer in the gold business. Her case is still before the courts.

A delivery of 20kg of gold within a period of 30 days is eligible for a 5% incentive, a tonne 7% and one to three tonnes 9%.

In 2022, artisanal and small scale miners delivered a cumulative 24.1 tonnes of the 35.3 tonnes of gold received by Fidelity Printers and Refiners.

Following a prior investigation She Corresponds Africa, which revealed that while the Zimbabwean  government is on cloud nine about the tremendous growth in gold production, only a few individuals were making millions from the precious mineral.

Yet the artisanal miners, who are contributing to its growth, remain poor and their working conditions are worsening, leading to thousands being injured or killed every year in mining accidents.

She Corresponds Africa also found that artisanal and small-scale miners are receiving between one to 1.5% from the current gold incentives, with some not getting anything.

“We just hear that gold buyers are given an extra 5% when they deliver our gold to Fidelity. No one that I know is given that extra money after our gold is sold,” Bruce Chimbwanda, an artisanal miner based in Mazowe, said.

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“We are usually given beer and permission to mine peacefully without hinderances from other mining gangs that control the claims as incentives.”

In Zimbabwe, most people are working in the informal sector. And in mineral-rich areas of the country, people are continuously risking their lives digging underground in search of gold, hoping to make enough money to take them out of poverty.

However, the reality is different. Artisanal and small-scale miners are wallowing in poverty in the volatile sector, which has a high incidents rate of violence.

Said another artisanal miner, Tonderai Mutasa: “As artisanal and small-scale miners, it’s our wish to become registered and use state-of-the-art equipment that does not put our lives at risk.

“But the money we are getting from the gold buyers does not enable us to do so. My colleagues and I get an extra something from the gold buyers ‘who are our bosses’ in the literal sense and we rejoice. “However, the extras we get are nothing compared to the huge amounts of money that we hear they are getting from Fidelity”.

Amid an economic meltdown, a surge of attacks linked to Zimbabwe’s growing artisanal mining sector has killed hundreds of miners.

Gold Miners’ Association of Zimbabwe chief executive Irvin Chinyenze said the GIS was mostly benefitting gold-buying agents, considering that most small-scale miners are not able to single-handedly produce 20kgs of gold per month as per the incentive’s requirement.

“The 5% incentive is not in our view for small-scale miners if you consider that it’s given for a minimum delivery of 20kgs per month. That threshold is high. So, in essence the major beneficiaries of that are not so much the miners but the buying agents and of course a few who might have that kind of capacity,” Chinyenze said.

“The reason why that incentive is there is to try and buttress delivery and through an upward review of the price indirectly in the form of a royalty.

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“If we have a pricing regime that is consistent with what’s obtaining on the world market, we will not need any more incentives beyond that”.

But Sakupwanya defended the policy.

“The government has availed incentives that have made us attractive to gold miners who now prefer to sell the gold to us, instead of selling it to smugglers,” he said.

Sakupwanya declined to comment on charges that small-scale miners were not benefitting from the scheme as much as they should.

An estimated 1.5 million people have turned to artisanal mining as a safety net. This trend has grown in the post-Covid-19 era which has brought compounded hardship, resulted in an economic implosion, currency and exchange volatility and rising inflation.

Around 41 agents, including Better Brands, are licenced to buy gold, which they later sell to Fidelity.

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