Online Reporter
Sunday Mail Reporter
THE Reserve Bank of Zimbabwe (RBZ) is targeting five tonnes of gold by the end of this year, as it continues to build the stock of bullion backing the new Zimbabwe Gold (ZiG) currency.
On Thursday, President Mnangagwa inspected the RBZ’s vaults and was shown 3 400 kilogrammes (kg) of the yellow metal, demonstrating significant growth from 1 500kg last year.
The RBZ has delivered on the President’s instruction to the bank two years ago to mobilise gold that would be used to support a new strong domestic currency.
Before the introduction of ZiG, Zimbabwe had experienced endless cycles of runaway inflation, exchange rate volatility and unsustainable parallel market premiums.
The gold reserves are being mobilised from in-kind royalties paid by large- and small-scale gold miners who remit half of their royalty obligations in physical minerals. Gold mobilisation is an integral pillar of the central bank’s strategy to entrench the stability of ZiG and bolster confidence in the new unit, introduced last year amid volatility and rampant inflation.
According to the bank, the value of the gold holdings is instrumental in determining the value of the local currency in circulation at any given time, helping keep a lid on inflation.
Ungoverned printing of money has in the past been blamed for driving inflation, which peaked at the last official count in July 2008, during the hyperinflationary era, a development Dr Mushayavanhu has said will not happen under his watch.
ZiG has remained largely stable since its introduction last year, while the exchange rate has stabilised, the parallel market premium has narrowed and inflation is downtrending.
This has not gone unnoticed, with the visiting International Monetary Fund (IMF) team last week commending the milestones Zimbabwe has achieved in efforts to stabilise the economy.
The IMF team, led by Mr Wojciech Maliszewski, was in the country from June 4 to 18.
In its communique after the Article IV consultations, it applauded Zimbabwe for the progress it has made in efforts to tame inflation, stabilise ZiG and lay a strong foundation for growth.
Dr Mushayavanhu said the central bank planned to accumulate at least five tonnes of gold by the end of this year, with the anticipation to continue increasing the tonnage.
This follows a rapid acceleration in reserve building, more than doubling to 3,4 tonnes to date from 1,5 tonnes just before ZiG was launched on April 5, 2024.
“Your Excellency, the gold reserves of the country held by the Reserve Bank have increased significantly from your last visit in 2024,” Dr Mushayavanhu told the President.
In the bank’s vaults lie 326 gold bars, each weighing 10kg, refined to a minimum purity of 99,5 percent, which meets international standards. The RBZ also holds approximately 13kg of Krugerrand coins and another 2kg in redeemed Mosi-Oa-Tunya coins.
According to the central bank, the holdings consist of in-kind deliveries of gold and converted in-kind royalties of platinum, lithium and diamond paid by miners.
“With Your Excellency’s wisdom and guidance, the Reserve Bank has accumulated gold largely from these two sources,” the governor said.
Collecting royalties from the different minerals has allowed the central bank to diversify its reserve-building strategy, reducing reliance on a single commodity or revenue stream.
Financial experts said growing the bank’s currency backing reserves to five tonnes would further improve public trust in the domestic currency.
Mr Raymond Madziva, a Harare-based banker, believes the gold build-up adds weight to the currency’s credibility.
“If the RBZ manages to hit the five-tonne mark this year, that will materially support the value proposition of the ZiG,” he said. “It is not just symbolic; it helps to psychologically and structurally anchor the currency in something tangible and internationally recognised.”
Economic analyst Mr Namatai Maeresera said the central bank’s target was within reach, especially if mineral royalties remained stable.
“The 2025 target is ambitious, but realistic,” Mr Maeresera said.
“Zimbabwe is a mineral-rich country and in-kind royalties, if properly accounted for and converted efficiently, offer a steady pipeline for gold acquisition. The critical element is governance, transparency and efficiency in converting those royalties into reserves.”
Figures from the Ministry of Mines and Mining Development show that deliveries to Fidelity Gold Refinery totalled 16 tonnes of the yellow metal in the first five-and-a-half months, compared to just under 14 tonnes during the same period last year.
“With over 16 tonnes of gold having already been delivered nationally this year, and the RBZ only needing to secure 1,6 more tonnes to reach its five-tonne target, it is very possible,” said Mr Maeresera.
“If just 10 percent of the national output is reserved through the central bank’s collection channels or purchases, the goal can be met with room to spare.”
Mr Maeresera added that leveraging the global demand for critical minerals like lithium and platinum could give Zimbabwe a comparative advantage in building reserves faster than many other countries in the region.
“The reserves framework the RBZ is setting up, if well-executed, can provide stability not just for ZiG but for the broader economic framework,” he said.
The RBZ is, however, not content with merely growing its stockpile; it is also rolling out a comprehensive gold reserves management framework.
Under the initiative, upgraded storage facilities will be complemented by cutting-edge, technology-based tracking systems, which will enhance both transparency and security.
“Our aim is not only to build reserves, but to safeguard them with world-class integrity measures,” Dr Mushayavanhu explained.
“We are developing appropriate technology-based gold tracking systems aimed at improving the integrity of the nation’s gold reserves.”
The RBZ’s vault model has garnered attention well beyond Zimbabwe’s borders.
Central banks from several Southern African Development Community (SADC) countries and further afield have visited Harare to study the RBZ’s gold-backed currency model.
At the same time, the RBZ is benchmarking its new reserves management framework against international standards.
It is leveraging internal capacities alongside global best practices, including guidance from the World Bank’s Reserves Advisory and Management Programme and fellow central banks in the region.
The bank’s gold mobilisation of five tonnes by year-end underscores the strategic importance of gold in providing credible backing for Zimbabwe’s monetary stability. This will also bolster the bank’s balance sheet.
Dr Mushayavanhu said the monetary authorities were “confident that the RBZ will achieve, and even surpass, our gold accumulation target by year-end.”
If successful, the RBZ will join a growing list of emerging market central banks that regard gold, not only as a store of value, but as a strategic hedge against global financial volatility.
