Business

Expedite FPR privatisation — Parliament

Minister Chitando

Ishemunyoro Chingwere
Business Reporter
Parliament has called on Government to expedite the partial privatisation of Fidelity Printers and Refineries to boost efficiency and curb leakages in the gold sector.

This comes as the Reserve Bank of Zimbabwe (RBZ) last year announced that a decision had been made to cede controlling stake in the sole legal gold buyer and exporter to the private sector.

The decision to privatise was arrived at after seeing the need to bring in gold producers in the matrix of buying and selling of the yellow metal and thus shore up efficiency and curb leakages.

Gold is one of the commodities hard hit by smugglers who have been capitalising on FPR’s inefficiencies to take the yellow metal out of the country illegally.

Government admits the country’s gold is being smuggled to destinations such as South Africa and Dubai.

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In an interview with The Sunday Mail Business, Parliamentary Portfolio Committee on Mines and Mining Development Chairman Edmond Mkaratigwa, said Government should quickly implement its decision and save the country millions in foreign currency, which continue to be lost to the parallel market.

Mr Edmond Mkaratigwa

Mr Mkaratigwa’s sentiments come on the back of deliveries to the official buyer having plunged by 31 percent to 19,052 tonnes in 2020 compared to the preceding year.

“Private capital comes in with a lot of efficiency and Government made the right call by opting for partial privatisation,” said Mr Mkaratigwa.

“You also need to look at our economic blueprint, the National Development Strategy 1 (NDS1) which is anchored on private sector led growth as the compass towards Vision 2030.

“Gold in this regard, with it’s target of 100 tonnes under the 2023 mining sector milestone, has an important role to play towards the attainment of our national goals.

“So one hopes we will see the quick implementation of the privatisation strategy of FPR so that we can see deliveries to the formal market picking up,” he said.

The Parliamentary Portfolio Committee, under the leadership of Mr Mkaratigwa, has previously been at the forefront of calling for the need to allow private players to come into the gold buying and export business.

This, Mr Mkaratigwa has previously said, is the best way to push smugglers out of business and thus benefit the economy in total.

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Efforts to get an update on the progress of the privatisation from RBZ Governor, Dr John Mangudya, did not yield results at the time of going to print as his mobile phone went unanswered.

Mines and Mining Development Minister Winston Chitando said the FPR issue was under the purview of the RBZ.

Under the new framework, as announced in December, private players will be allowed to buy a stake of up to 60 percent in the gold refining business with the RBZ retaining 40 percent.

The changes will, however, not affect FPR’s printing and minting division which will remain in the hands of the central bank.

“The unbundling of FPR is designed to partially privatise the gold refining business by allowing private players to acquire a stake therein and in the process secure and endear the private sector’s interests in the production and marketing of gold in Zimbabwe,” said Dr Mangudya in a statement which announced the decision to privatise the entity.

Dr Mangudya

“By being part of the decision making process on gold trading, it is expected that the gold producers’ compliance levels in the trading of gold will significantly increase.

“Accordingly, the bank shall retain 40 percent shareholding in FPR and dispose of 60 percent shareholding to both the large-scale and small-scale gold producers,” said Dr Mangudya.

Government estimates are that Zimbabwe , could be losing in excess of US$100 million per month through gold smuggling.

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