- Record Forex Receipts: Record high of US$13.3 billion in FY2024, up 21% from US$11 billion in FY2023
- Gold Export Earnings Soar: By 37% to US$2.5 billion in 2024, driven by higher production levels and favorable global gold prices
- Potential Losses Due to Selling Arrangements: Resulted in potential losses of up to US$600 million
Harare- Zimbabwe's foreign currency inflows surged to a record high of US$13.3 billion in FY2024, representing a 21% year-over-year (YoY) growth from US$11 billion in FY2023.
The robust performance was primarily driven by a significant uptick in export receipts, which topped US$7.9 billion. Merchandise exports, fueled by strong demand for gold and tobacco, reached US$7.9 billion.
Mineral exports, the largest contributor to merchandise exports expanded by 7.8% YoY, from US$5.4 billion in FY2023 to US$5.9 billion in FY2024, demonstrating the sector's sustained growth momentum.
The increase in merchandise exports was due to growth in gold exports, driven by higher production levels and prices. Tobacco exports also rose due to increased production and stable prices.
In 2024, Zimbabwe's gold production surged to 36.47 tonnes, up from 31 tonnes the previous year, marking the highest output on record. This increase was driven by favourable gold prices, enhanced pricing strategies from Fidelity, the proliferation of gold buying centres nationwide, and government initiatives aimed at formalising the informal sector. These factors collectively contributed to a more robust and structured gold market, positioning Zimbabwe for improved revenue generation in the mining sector.
In 2024, gold prices reached a record average of US$2,609.1, a global record. This led to a 37% increase in Zimbabwe's gold export earnings, which rose to US$2.5 billion in 2024 from US$1.8 billion in 2023. Higher production volumes and favourable global gold prices drove this growth.
However, despite favourable conditions, Zimbabwe's gold production and earnings could have been higher. According to the Zimbabwe National Chamber of Commerce (ZNCC), high production costs, including electricity expenses, taxes, royalties, and the need for sophisticated machinery, impacted earnings. Electricity costs accounts for at least 20% of miners' revenues according to ZNCC, while 30% of foreign currency earnings are surrendered in exchange for the local currency, which is overvalued than its real value.
Zimbabwe's 2024 gold production of 36.47 tonnes, combined with average gold prices of US$2,609.1 per ounce, suggests potential earnings of over US$3.10 billion, based on London Bullion Market (LBMA) spot prices. However, actual earnings were US$2.5 billion, indicating a potential loss of US$600 million.
This disparity is due to Zimbabwe's current arrangement of selling gold through agents, rather than directly on the LBMA. This is due to Zimbabwe's suspension from the LBMA, resulting from production levels falling below 3 tonnes and failing to meet LBMA standards. Selling gold through agents is making Zimbabwe lose a minimum of 20%, with the latest being 24%.
In 2025, government is targeting to produce 40 tonnes of gold. However, this seems to be a big mountain to climb given companies are now ceding 30% of their foreign currencies to government in exchange for the overvalued.
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