Zimbabwe gold reserves rise to 4.4 tonnes as ZiG backing strengthens

Story by Bruce Chahwanda, Political Editor

ZIMBABWE’S gold reserves have risen to 4.4 tonnes, placing the country 11th in Africa and third in the SADC region in terms of official gold reserves, President Dr Emmerson Mnangagwa announced.

The President revealed the figures after touring the Reserve Bank of Zimbabwe vaults in Harare on Monday, where officials confirmed that reserves had increased by one tonne since his previous inspection.

President Mnangagwa said the growth followed a directive issued two years ago for mineral royalties to be accumulated in physical form as part of efforts to strengthen the country’s monetary position.

“This morning, I inspected the vaults of the Reserve Bank of Zimbabwe to personally verify our national gold and ZiG reserves. I am delighted to report that our strategic initiatives to establish a gold-backed foundation for our economy are producing substantial outcomes,” he said.

“Presently, Zimbabwe proudly ranks 11th in Africa and third in the SADC region for official gold reserves. These reserves are tangible assets that underpin our monetary sovereignty rather than mere numbers,” he said.

The President said the country now holds more than four metric tonnes of gold and foreign currency reserves backing the ZiG currency, adding that Government remains on course to increase reserves to five tonnes by the end of the year.

“With over four metric tonnes of gold and foreign currency reserves, our ZiG currency remains fully backed and resilient to global economic shocks,” he said.

The Reserve Bank of Zimbabwe’s (RBZ) governor, Dr John Mushayavanhu said 22 billion ZiG is currently in circulation, with three percent held in hard currency reserves.

The increase in reserves comes as authorities continue efforts to stabilise the ZiG currency and strengthen confidence in Zimbabwe’s monetary system.

Dr Mushayavanhu said the country’s reserves have grown significantly since the President’s previous visit to the central bank vaults.

“It is pleasing to note that since his last visit, we have added almost a tonne of gold, and so the President was able to see for himself the extent to which we have increased the reserves,” he said.

He revealed that Zimbabwe currently holds more than US$1.4 billion in reserves backing the ZiG currency, with the bulk of the reserves comprising gold holdings.

“Currently, the country has over US$1.4 billion worth of reserves backing the ZiG currency, and that amount is predominantly comprised of gold reserves. We are continuing to grow it,” he said.

Dr Mushayavanhu said the level of reserves demonstrates the strength of the local currency and should help narrow the gap between the official and parallel market exchange rates.

“The total ZiG in circulation and deposits is about 22 billion ZiG. If you divide that by the value of reserves, it means we can buy back all the ZiG in the market at an exchange rate of just under 16. There is no reason why there should be such a high parallel market premium,” he said.

He added that Zimbabwe’s reserves are currently sufficient to cover one and a half months of imports.

“That US$1.4 billion is enough to cover one and a half months of imports in this country. Our target is between three and six months’ import cover, but at the moment we are at 1.5 months,” he said.