Zimbabwe’s gold exports hits the lowest in 2 years

  • Gold is earmarked to drive mining sector growth in 2021
  • Gold exports decline trend stretching from 2020
  • International prices easing on global mass COVID-19 vaccination rollouts

Zimbabwe’s gold earning crushed to a 2 year low in January, marking a bad start to a year which is tipped to usher in a new economic direction.

Latest data released by ZIMSTAT shows that total exports for the month of January 2021, fell by 46% to $282.9 million. The monthly decline is the widest since 2017, while the net export level is the worst January performance since 2016.

Further review of the data shows that the decline in exports was largely due to the underperformance in gold exports. Gold is essentially the country’s foremost export product by value. Gold has historically been the largest contributor to exports accounting for an average of 25% of the total between 2009 and 2018.

However, in January gold exports eased to US$55.7 million, which is the lowest level in 2 years. At US$55.7 million gold exports were 47% lower than the previous month’s outturn. The decline in exports reflects on production and to some extend price dynamics on global markets.  Zimbabwe’s monthly gold production has been slowing down in a drastic way particularly in 2020.

The chart shows a decline in gold deliveries to Fidelity Printers since 2019. Deliveries to Fidelity which is the sole buyer, is used as a measure of national output.

Gold deliveries touched the lowest point in 2008, at the height of hyperinflation. In the year, only 3.6 tonnes were produced.

However since then, production picked up, in line with a stable multicurrency, peaking at 33.2 tonnes. As will be shown in other charts, the growth was largely driven by the proliferation of small scale miners, whose contribution peaked at 62% in 2019, before softening in 2020.

The decline in production is easily traced to the return of the Zimdollar and a change in policy regarding the payment of deliveries. with the return of the Zimdollar, government changed the payment structure which previously included a 10% export incentive, on top of the “forex earnings”. The 70:30 export retention levels meant exporters would receive a fraction of earnings in local currency. This would typically not create a challenge in a stable macroeconomic environment.

Zimbabwe’s macro environment has however not been stable. In 2019, inflation started to creep back as the market dedollarised and currency reforms encapsulated by liberalisation policies, saw the local unit depreciate at a faster rate.

Since settlement was at prevailing interbank rates as is still the case, the variance between the interbank rate and the parallel rate, implied that gold exporters were incurring losses on receipts. This was happening at a time inflation was raging havoc and local costs increasing further driving the losses up.

Tactical side marketing and production drags characterised the sector’s response to the challenges. In 2020 government targeted to produce 26 tonnes but the sector only delivered 19 tonnes.

Effectively the country failed to take advantage of the strong global prices which prevailed in 2020 as safe have demand went up. The price of gold rose by as high as 30% as investors pumped into less risky assets in the face of COVID-19.

It remains to be seen how the sector will reemerge to champion economic rebound. Earnings from the sector are important in the quest for currency stabilisation and the decline in earnings is  worrying as it means less resources available for interbank trading.


  1. Gold is a safe haven during times of uncertainties. Since the beginning of the year, gold prices have been crumbling thx to vaccines which have brought high expectations of normalcy in 2021. This has increased investor appetite fo riskier assets such as stocks early 2021.

    However, the passing of Biden’s $1.9 trillion rescue plan in March has increased inflation expectations. Gold is a safe haven during high inflation periods. As a result, gold prices is gaining some lost ground.

    I predict that gold prices in 2021 will not exceed prices witnessed in 2020. Zim missed a great chance of utilizing the pandemic thx to disorganized & financially constrained Fidelity Printers. It’s high time now to privatize Fidelity or allow more players in gold buying to improve pricing & reduce side marketing activities mostly by artisanal miners. These are contributing more gold than large players combined!


Please enter your comment!
Please enter your name here