Export business reforms gather pace
Africa Moyo Business Reporter
Government has covered reasonable ground towards improving the ease of doing export business, amid indications that players in the pharmaceutical and jewellery sectors are already benefiting from some of the reforms achieved.
The doing export business reforms seek to address “colonial laws” that scupper the participation of locals in economic development.
Team leader for the Technical Working Group on improving the ease of export business, Professor Ashok Chakravarti, told The Herald Business yesterday that the jewellery sector, is now getting about 3kgs of gold per month to beneficiate.
Previously, the jewellery industry was struggling to access gold from Fidelity Printers and Refiners (FPR) so as to beneficiate and export finished products.
Said Prof Chakravarti: “We had some progress in terms of improving the export business through addressing restrictive colonial laws. But there are some issues that are outstanding,” said Prof Chakravarti.
“Progress has been recorded in the pharmaceutical sector and if you talk to companies such as Varichem (Pharmaceuticals), they will tell you that we have done something.
“At the same time, the Jewellery Association will also tell you that through our intervention, they are now also getting about 3kgs of gold from Fidelity Printers.”
The Gold Trade Act, which was operationalised from September 1, 1940, dictates that registered jewellers must buy their gold from the RBZ’s gold-buying arm, FPR.
In 2011, statistic released by the Jewellery Council of Zimbabwe indicated that gold from FPR was more expensive as it was sold at world market prices.
This was expected as FPR buys gold at the obtaining international market price of any given day.
The alleged high cost of gold from FPR at that time reportedly led to the closure of 80 percent of the country’s jewellery firms while the few that remained operational had capacity utilisation of below 10 percent.
In the year 2000, there were about 5 000 jewellery companies but by 2011, the number had plunged to 55 and 60 due to challenges associated with obtaining fairly priced gold.
Aurex (Pvt) Ltd is the biggest company in Zimbabwe that manufactures and retails jewellery in genuine gold and silver, on a large-scale.
Government seeks to address about 16 laws that impact on the export business.
Another law, which is crucial to improving the export business, is the Mines and Minerals Amendment Act.
The Act, which was expected for the Second Reading stage in Parliament mid-June, is understood to have been passed and reportedly awaits Presidential assent.
The Mines and Minerals Amendment Act is expected to create a favourable operating environment particularly for small-scale miners, who are currently contributing more gold to FPR, but are bearing the brunt of law enforcement agents who arrest them for possessing the yellow metal.
Amendments to the Mines and Minerals Act (Chapter 21:05), which was enacted in 1963, have been in the pipeline since 2007, but were accelerated under the auspices of the ease of doing business.
Government, through the Office of the President and Cabinet (OPC), is leading the reforms under the Rapid Results Initiative.
The RBZ is incentivising local companies, tobacco growers and gold miners, to export so as to generate foreign currency.
Shortages of foreign currency are impacting some sectors of the economy such as miners and manufacturers as they take long to access foreign currency from the RBZ.