Published: 19 hours ago

The Chamber of Mines of Zimbabwe has initiated fresh negotiations with the Reserve Bank of Zimbabwe (RBZ) to review the current foreign currency retention framework, citing growing concerns over worsening access to forex and the threat it poses to the viability of exporting companies.

Under the current policy, exporters are required to surrender 30% of their export earnings to the central bank at the official exchange rate, while retaining 70%. However, the mining industry - which generates more than 75% of Zimbabwe's foreign currency earnings - warns that this structure is eroding the value of their proceeds and restricting operations.

Isaac Kwesu, the Chamber's chief executive, said the industry needs a policy framework that sustains both national economic objectives and the competitiveness of exporters.

"We are engaging the Central Bank on an optimal foreign exchange framework that will balance the requirements of government without undermining the operations of the exporting companies," Kwesu said.

Executives within the mining sector are increasingly vocal about the policy's adverse effects, with many pointing to cashflow constraints that have delayed expansion projects and hampered the importation of critical equipment, spare parts, and consumables.

In 2024, the mining sector earned over US$6.1 billion, largely driven by gold, platinum group metals, diamonds, and lithium. But the Chamber has warned that unless the forex retention model is reviewed, output could stagnate or even decline in the coming year.

There are growing calls within the industry for a full retention of export proceeds or, at the very least, for the surrendered portion to be valued at a market-determined exchange rate. Some players are also proposing the return of offshore retention accounts to ease access to operational funds.

The RBZ has yet to publicly respond to the proposals, although sources indicate the institution is reviewing the framework amid mounting pressure from both the mining sector and other export-driven industries.

The current policy stance was outlined in the 2025 Monetary Policy Statement, which reduced the export retention threshold by five percentage points to 70%, despite earlier pleas from exporters to raise it to 100%.

While the mining industry continues to lobby for reforms, economists are offering mixed forecasts. Prosper Chitambara, a senior economist, expressed cautious optimism that Zimbabwe's overall forex inflows in 2025 could improve.

"I do not necessarily agree with their projection," Chitambara said. "Given that the economy is projected to rebound and tobacco output has shown significant improvement, I believe foreign currency availability should be better than last year."

However, he acknowledged the risk of a forced de-dollarisation policy, which could pose a downside risk to economic stability.

"In terms of mineral commodity prices, they are not doing too badly either. So I think this year should not be too bad in terms of foreign currency receipts," Chitambara added.

The Chamber of Mines is expected to intensify its engagement with the RBZ in the second half of the year, as mining firms prepare their operational budgets and investment strategies for 2026.

As Zimbabwe navigates the complex balance between currency stability and industrial growth, the outcome of these talks will have significant implications for the country's top forex-generating sector and broader economic trajectory.
- The Independent

You might also want to read this

• RBZ exposes massive money laundering
• RBZ disburses ZiG350 million to key sectors
• RBZ to launch diaspora-backed securities
• Zimbabwe's RBZ scraps heavy-handed forex controls
• RBZ's decision to halt gold coin sales has drawn warnings
• RBZ projects inflation drop by September
• RBZ applauds declining inflation
• RBZ moves to boost ZiG use
• RBZ suspends 30-day forex liquidation requirement
• RBZ maintains 50% USD retention for tobacco farmers