The Sunday News
THE Government has queried the touted growth in the mining sector saying production figures that are said to be going up and revenues remitted to Treasury were not adding up.
Figures released by the Ministry of Finance and Economic Development showed that although mining contribution to Gross Domestic Product was said to be going up, the revenue realised from the sector was actually going down.
The figures show that mining contribution to GDP grew steadily from eight percent in 2009 to 15,7 percent last year.
However, the contribution of mining revenue as a percentage to the total revenue has been going down.
In 2009 when mining contribution to GDP was eight percent, the sector contributed 5,4 percent of total revenue but last year when its contribution went up by more than half to the 2009 figure at 15,7 percent its contribution to the total revenue was a mere 4,8 percent.
Chief Economist, Revenue & Tax Policy in the Ministry of Finance and Economic Development, Mr Innocent Madziva, said in 2012 between $18 million and $30 million was not accounted for from gold sales.
“In 2012, 13 743 kilogrammes of gold were produced which translates to royalty of about $60 751 282,40 (seven percent royalty, gold average price of $1 668,85 in 2012) but only $23 042 182,41 was remitted to Treasury. So where is the $18-$30+ million?”
He said this was a sign that mining companies could be smuggling minerals out of the country.
There have been suspicions that many mining companies were smuggling minerals out of the country.
Since the discovery of diamonds in Chiadzwa in Marange a few years ago, there has not been any meaningful contribution realised from the mineral in the country.
Government has continuously complained that money being raised in the diamond fields was not finding its way to treasury.
Mr Madziva said mining companies must improve their transparency warning that Government would introduce a raft of measures to plug the anomaly in the sector.
He said Government was pushing for the Extractive Industries Transparency Initiative (EITI) which will focus on improving accountability in the sector.
He said Government would also embark on a Publish What You Pay (PWYP) campaign to ensure that companies show the public how much they were contributing to the fiscus.
“This will lead to effective management of natural resources for poverty reduction, economic growth and sustainable development.”
Chamber of Mines president Mr Alex Mhembere said, however, perceptions surrounding the contribution of the mining sector to the economy continued to weigh down the industry after the Government increased royalty rate fees five times between 2009 and 2012.
“This has resulted in the current suboptimal royalties regime that has significantly compromised the viability of the industry and impaired the competitiveness of the country in attracting investment for mining development.”
He said fees charged in Zimbabwe, in spite of being reduced early this year, were still above average benchmarked against other Sadc countries.
Zimbabwe Artisanal and Small Scale Council president Mr Wellington Takavarasha admitted that there was smuggling in the mining sector but said it was because of the pricing issue.
“Take for example gold is fetching minus five the price of international prices on the black market and Fidelity is buying at minus 11 percent of that price. Obviously some people would prefer to sell their gold on the so-called grey market.”
Government, he said, must come up with more incentives to attract miners to sell minerals through the official channels.
