News / National
Govt fuels gold sector chaos
20 Jun 2018 at 02:18hrs | Views
Government is fuelling corruption tendencies in the gold mining sector by failing to give miners the value of their product, Finance and Economic Development deputy minister Terence Mukupe has said.
Giving his keynote address at the CEO Africa Roundtable discussion held in Bulawayo last week, Mukupe said corruption in the gold sector was being fuelled by skewed payment mode offered by government against the one prevailing internationally.
"The price of gold is hovering around $44 000 to $45 000 a kg. It's clear we have got a lot of makorokozas and I can bet you my last dollar that none of these makorokozas have got bank accounts. I read some reports that there are about eight tonnes of gold that is trading in the informal market. That's close to $300 million," Mukupe said.
"Why do we have that situation? The reason we have that situation is that the way things are structured in our country, if you were to bring your gold to us as government we are not giving you full value. We are not giving you 100% dollars; we are forcing you to take a certain percentage in a transfer."
The difference in the payment structure has created opportunity for those people that have got the bond notes to go to the field to pick up the gold and they cross the Limpopo River into South Africa, get hard currency and when they come back with hard currency, they trade it for real time gross settlement system (RTGS) dollars, Mukupe said.
"When they get those RTGS dollars they buy the bond notes and then go back to the field, creating a vicious cycle."
He said there were a lot of people were running in the countryside buying maize and reselling it.
"Those people are not running around in the countryside with small change, they have got cash. You have got the tobacco season going on right now, there are a lot of people running around in the countryside side marketing tobacco. It's a lot of cash," Mukupe said.
Giving his keynote address at the CEO Africa Roundtable discussion held in Bulawayo last week, Mukupe said corruption in the gold sector was being fuelled by skewed payment mode offered by government against the one prevailing internationally.
"The price of gold is hovering around $44 000 to $45 000 a kg. It's clear we have got a lot of makorokozas and I can bet you my last dollar that none of these makorokozas have got bank accounts. I read some reports that there are about eight tonnes of gold that is trading in the informal market. That's close to $300 million," Mukupe said.
"Why do we have that situation? The reason we have that situation is that the way things are structured in our country, if you were to bring your gold to us as government we are not giving you full value. We are not giving you 100% dollars; we are forcing you to take a certain percentage in a transfer."
The difference in the payment structure has created opportunity for those people that have got the bond notes to go to the field to pick up the gold and they cross the Limpopo River into South Africa, get hard currency and when they come back with hard currency, they trade it for real time gross settlement system (RTGS) dollars, Mukupe said.
"When they get those RTGS dollars they buy the bond notes and then go back to the field, creating a vicious cycle."
He said there were a lot of people were running in the countryside buying maize and reselling it.
"Those people are not running around in the countryside with small change, they have got cash. You have got the tobacco season going on right now, there are a lot of people running around in the countryside side marketing tobacco. It's a lot of cash," Mukupe said.
Source - newsday
